CPA Broaches Privatization with Houghton Board of Education

HOUGHTON — According to the Houghton Lake Resorter, the fiscal 2006 school budget for the Houghton Public Schools is more than $600,000 in the red and will effectively wipe out the district’s positive fund balance if drastic steps are not taken. In a special Sept. 12 meeting with the school board, Certified Public Accountant Steve Smaka recommended that the board consider privatizing its busing and food services.

One audience member took issue with the recommendation, noting that she had heard privatization may be more costly in the long run. The Mackinac Center for Public Policy has noted that this is a common contention among opponents of privatization. "It’s a beguiling argument simply because it is so sweeping and generalized," said Mackinac Center director of fiscal policy Michael LaFaive, who has been following privatization in Michigan for 10 years. LaFaive argues that if privatization were more expensive over time, then it would be likely that districts would increasingly abandon privatization; yet we’ve seen growth in competitive contracting, not a decline.

Smaka, a retired state employee and former school board member told MPR that the union’s demands were simply too high. "The MEA is going to have to come to grips with the fact that the district cannot afford the contract which it agreed upon several years ago. If the contract isn’t modified the district could be facing bankruptcy," he said.

The Resorter published a lengthy account of the board’s meeting. Other ideas discussed at the meeting included competitive bidding for health care benefits to reduce costs incurred for current MESSA benefits; establishing a long-term plan for replacing buses and improving facilities; closing unnecessary facilities; and less use of overtime.