This is the 13th edition of a privatization survey of school districts in Michigan conducted by the Mackinac Center for Public Policy. The survey asks district officials to what extent they use competitive contracting to provide noninstructional services, such as custodial, transportation and food services. This edition is an expanded version that contains new survey research of school districts in four additional states: Pennsylvania, Ohio, Georgia and Texas.
The Center expanded the scope of this survey to better gauge the comparative use of contracting in Michigan school districts and to make its annual survey more useful in other states. Pennsylvania and Ohio were chosen in part due to their status as Midwestern sister states. Georgia and Texas not only represent the South, but may also be informative for comparisons, as Georgia has only 180 school districts (and thus larger districts on average) while Texas has 1,025 (and thus smaller districts on average).
Of the 2,861 districts surveyed only one district — Fabens Independent School District in Texas — failed to respond. Of the states surveyed, Pennsylvania had the highest rate of contracting out for at least one of the three major support services at 75 percent, followed by Michigan with 71 percent, Georgia at 38 percent, Texas with 23 percent and then Ohio at 17 percent.
In Michigan, after consistent growth in the number of districts contracting out for noninstructional services over the course of the last decade, the rate of privatization barely changed from 2013 to 2014. However, contracting out by Michigan school districts grew once again in 2015: The percentage of districts in Michigan that contract out for at least one major noninstructional service grew from 67 percent in 2014 to 71 percent in 2015.
Depending on their size, school districts could be leaving millions of dollars on the table by not pursuing privatization. In the 2009, 2010 and 2011 surveys conducted by the Center, we collected data from district officials about how much they saved by contracting out. Officials reported saving an average of $34 per pupil on food service contracts, $191 per pupil for custodial contracts and $110 per pupil for transportation contracts.
Not every district will save these amounts, but every school superintendent should be interested in ways to potentially save hundreds of dollars per student. Saving money on noninstructional services enables districts to dedicate more funds to their primary objective — providing quality educational opportunities for students.
Contracting out for noninstructional services, however, needs to be done right in order for districts to take full advantage of it. Districts that fail to properly privatize may end up struggling to break even on the deal. With this in mind, this report includes “10 Contracting Rules of Thumb” in Appendix A, an excerpt from a 2007 published report by the Mackinac Center entitled “A School Privatization Primer for Michigan School Officials, Media and Residents.”