Privatization is becoming an increasingly popular management tool for school districts throughout Michigan. Across the Great Lake State many school districts are looking to save money to balance their budgets, invest more in classrooms and improve non-teaching support services. Competitive contracting for noninstructional services is just one way districts hope to accomplish these goals.

The success of school support service privatization in Michigan is hard to dispute. This is the fourth Center survey in a row that showed an expansion of privatization. Districts are showing something of a "revealed preference" in favor of the practice by engaging in it at ever-increasing rates.

Not only has privatization of the big three services — food, custodial and transportation — increased since 2006, it increased by an eye-catching 7.1 percent (15 districts) between August 2006 and the end of June 2007. At the close of the Mackinac Center for Public Policy’s research window on June 30 another six districts were in the final stages of contracting at least one service each. In addition, 18 other districts reported exploring support service privatization for the fiscal 2009 school year.

Food service privatization has remained a perennial favorite as measured by the absolute number of districts contracting at 164. Custodial privatization grew to a modest 14.3 percent of all districts; however there was a significant 25.2 percent increase (16 districts) in the contracting rate for janitorial services since 2006. The 2005 to 2006 increase was 26.2 percent. The number of districts contracting out for busing services also increased, but by only three districts.

For an in-depth assessment of school privatization in Michigan, see "School Privatization Primer."