Center’s 2011 School Privatization Survey Shows That for First Time, Majority of Michigan Districts Contract Out for Noninstructional Services

295 of 550 districts — 53.6 percent — now contract at least one major service to the private sector, up from 31.0 percent in 2001

For Immediate Release
Tuesday, Aug. 16, 2011
Contact: James Hohman
Assistant Director of Fiscal Policy
Michael D. Jahr
Vice President for Communications, Mackinac Center for Public Policy

MIDLAND — More than half of Michigan school districts now use private vendors to provide food, custodial or transportation services, according to the Mackinac Center’s 2011 school privatization survey. The survey found that 295 of the state’s 550 local school districts — 53.6 percent — contract for at least one of these support services.

“In the past decade, privatization of noninstructional services has moved from controversy to consensus,” said James Hohman, assistant director of fiscal policy. “With school officials constantly seeking more revenue, contracting has a firm record of saving districts money.”

According to the Center’s annual survey, school support services contracting has grown from 31.0 percent in 2001. Districts newly privatized 57 major support services this year. Custodial service contracting grew the most, with 29 districts beginning to use private-sector vendors to clean and maintain schools. Most districts say they contract this service in order to save money. Oakridge Public Schools in Muskegon, for example, expects to save $520,000 per year by contracting for custodial work.

Statewide, transportation contracting grew the fastest, rising 26.6 percent from last year and now occurring in 67 districts. Indeed, 12.2 percent of school districts now use privatized bus services — nearly triple the 2006 rate of just 4.4 percent. The Woodhaven-Brownstown School District expects to save $331,200 in the first year by contracting its busing.

Contracting school support services is the object of special incentives in this year’s state budget, which stipulates that districts meeting at least four out of five “best practices” — one of which is seeking contractors for support services — can receive additional state funding. “Still,” noted Hohman, “the state’s financial incentive is small compared to the savings that districts posted.”

The survey was conducted from May 25 to Aug. 4 and received responses from all 550 local public school districts. Results for specific districts are available upon request.