Ware & Superintendent
Mackinac Center intern Jeffery Ware, left, and Superintendent James Hilgendorf discuss the various opportunities for privatization for the small district of Johannesburg-Lewiston.

It should be a noncontroversial proposition that any school district that can save money through privatization, properly done, should do so. Indeed, districts have an obligation to students and to parents-who are also the taxpayers-to operate as efficiently as possible with the resources entrusted to them, while still delivering the highest possible educational quality.

Unfortunately, smaller school districts face a number of obstacles that make privatization of non-instructional services such as food, transportation, and janitorial service more difficult than it is for larger districts.

For example, the amount of business available at a small school may not offer enough profit potential to entice a contractor to operate there. Such is the case in the Johannesburg-Lewiston school district in northern Michigan, which has only 870 students whose families live in an extended area of 310 square miles. Because of the district's area, transportation is a constant concern of the district.

How can a district of Johannesburg-Lewiston's size attract the business to their district? What if it could somehow offer a contractor more business than just what the contractor would do in the district? This can be accomplished by consolidating transportation services with neighboring districts into a charter district, or by merging with a larger, contiguous district, such as Gaylord. This could easily develop into a "spoke-and-wheel" arrangement, in which a larger district like Gaylord serves as the center of the wheel, and smaller surrounding "spoke" districts, like Johannesburg-Lewiston, Atlanta, and Hillman, are able to benefit from consolidated privatization arrangements amenable both to schools and contractors. Another way to handle the transaction would be for several smaller districts to appoint a panel to represent them in a consolidated privatization effort.

The contractors themselves would be motivated to come up with innovative solutions in order to stay in business. For instance, to deal with the problem of families living in remote areas, instead of sending a bus 30 miles or more and back to get two children to school, they might use minivans. This way, all the other kids on the bus wouldn't have to endure an hour-long ride to school everyday when their part of the route takes only 15 minutes. Another possible innovation would be to grant vouchers in the form of gas subsidies to parents, giving them the incentive to bring their children closer into the transportation service's route.

Another obstacle smaller school districts face when considering privatization of non-education-related services is political opposition from school employee unions. The experience of Arvon Township, a school district located in the northwest corner of the Upper Peninsula, is instructive in this regard.

In 2000, the five-member Arvon school board agreed to outsource all of the district's non-instructional services. These included transportation, food, and janitorial services for only 14 students. The board figured that it could save 32 percent of its annual budget for these services, which would have permitted the school to allocate at least $32,400 more for student classroom education-more than $2,300 per student, per year.

Unfortunately, fear that other school districts might follow suit-and cut dues-paying union jobs-motivated the Michigan Education Association to muscle the Arvon school board and prevent it from making the changes. The union packed meetings with its members and created an intimidating atmosphere that led one member of the school board-the member who initially proposed the privatization plan-to recant his vote in favor, which defeated the plan.

Small school districts are especially susceptible to political intimidation because their relations with the union are personal, and because the community is easily swayed by accusations aimed at disrupting reasonable dialogue. The risk of losing community support is real and personal, and it can become extremely difficult for a district superintendent to keep his or her board members from abandoning ship under such circumstances.

As Johannesburg-Lewiston superintendent Hilgendorf told MPR, "The school is the community-yes, it's for the kids, but it's the community's kids. We can't forget that."

If jobs are lost, everyone feels the effects of that decision. It takes a tough administrator to withstand the pressure that can come to bear in a small town, whose citizens may be more inclined to forego possible money savings for the sake of keeping a familiar face working with the children. In such cases, re-hiring the same person under the new plan may be the only way to defuse opposition.

And it takes a strong communicator to get across to people why it is in the best interest of a small school district to divert as much funding as possible to the classroom. The sad truth is that too many graduates of Michigan's public schools are unprepared for college or the workforce. According to a study by the Mackinac Center for Public Policy, Michigan universities and businesses spend more than $600 million annually to teach high school graduates basic skills they should have learned in school. The study, "The Cost of Remedial Education: How Much Michigan Pays When Students Fail to Learn Basic Skills," showed that Michigan businesses spend approximately $40 million per year to teach their workers how to read, write, and perform basic math operations the school system has failed to inculcate.

The Detroit Free Press recently expressed a view of privatization that leaders of smaller school districts should consider: "Privatizing school support services is not an answer unto itself, but the district owes it to taxpayers and students to seek the most efficient blend of inside and outside operations. The important thing is ensuring that every possible dollar goes into classrooms and other activities that benefit children, not into ensuring that the school district remains the jobs machine of first resort."