School districts around the state have saved millions by contracting out with private vendors for food, custodial or transportation services. Under Proposal 2, privatization of noninstructional services would no longer be a prohibited subject of bargaining. Hence, unions could add “no-bid” clauses to their collective bargaining agreements to prevent districts from contracting with private service providers for such services. Based on the application of savings figures from Mackinac Center privatization surveys to districts that have yet to contract out, Proposal 2 could prevent school districts from saving an additional $300 million annually.
The three items above account for $1.6 billion in annualized savings.