When Opposites Attract: Public Schools and Private Enterprise

Some things you just don't expect to go together. Like Julia Roberts and Lyle Lovett; Bill Clinton and NAFTA; public schools and private enterprise. But sometimes even the most unlikely pairings produce the most desirable results.

Take, for example, the trend toward privatization in public education. Schools across America are turning public classrooms over to private, for-profit companies. Under pressure to improve, schools are finding that the profit motive can be harnessed to their benefit.

In Minneapolis, Minnesota, the school board voted to hire a private firm to take over as "superintendent." In a New Jersey high school, Japanese is being taught by a company better known for teaching tourists than teenagers. And in Baltimore, Maryland, a private-management company's efforts to improve nine inner-city schools have attracted the attention of school superintendents from Washington, D.C. to San Diego, California.

Schools have always depended on private companies for support services. But now they are being asked to do much more than cook, clean, and drive the bus. Private companies are teaching students, designing curriculum, and sometimes managing entire schools. Why? Public schools are finding that the private sector can offer flexibility, efficiency, and expertise at all levels of operations, including core services.

"As a private company, we have performance outcomes we have to meet. If we don't deliver, we lose the opportunity to renew our contract. That makes us extremely accountable," says Paula Singer, vice president of Sylvan Learning Systems. Sylvan contracts with schools in Memphis and Baltimore for remedial education for disadvantaged students.

New Jersey school principal Karol Brancato hired Berlitz International, Inc. to provide foreign language instruction at her school, saying that the arrangement expands the educational opportunities for her students. "When contracting out, you're getting people who are experts in their particular area. And it's extremely feasible for us. . . .What would we have done with a [full-time] Japanese teacher on staff the rest of the time?"

A private company has also helped South Pointe Elementary in Dade County, Florida build its reputation as a world-class learning environment-despite the fact that 90 percent of its students are poor enough to qualify for federal lunch programs. Education Alternatives, Inc. (EAI), a for-profit management and instruction firm, devised and implemented its own curriculum at South Pointe Elementary, took over teacher training, and introduced the latest in education technology.

Perhaps EAI's performance can best be assessed by the school's popularity with Dade County's affluent parents who have sent their children across town to attend South Pointe Elementary. "They said these parents would never entrust their children to an inner-city school. EAI has helped us do that," says teacher Linda Lentin.

Shortly after EAI's success in Florida, the company signed a $135 million, five-year contract in 1992 to manage nine Baltimore schools. Since then, at least three other companies have begun to offer management services to public schools.

EAI may soon be coming to Michigan. Last month, the Pinckney school board in Livingston County signed a letter of intent to contract with the firm to manage its seven schools. Four members of the board were the targets of a November 1993 recall effort supported by the Michigan Education Association, the state's largest teachers' union, over the issue of privatizing school busing. The MEA, which states that it "oppose[s] any privatization of public school functions," failed by wide margins to recall the four, who now are looking at privatization as an avenue to significant improvement in the classroom.

(The MEA, it turns out, only opposes contracting out when school districts do it. The Mackinac Center has learned that at its own headquarters complex in East Lansing, the MEA contracts to private companies for such services as custodial, security, and mailing.)

In what may be the most unusual arrangement with the private sector, the Minneapolis school board last fall selected Public Strategies Group, Inc. (PSG), a St. Paul consulting firm, to take on the role of "superintendent." Instead of following a typical employment contract, the board will tie PSG's compensation to specific, measurable outcomes. Says PSG president Peter Hutchinson, "If we don't produce, we don't get paid."

Contracting frequently cuts costs in a variety of areas. In Piscataway, New Jersey, contracting for food service and transportation saved $2 million last year-freeing up funds for the instructional budget. Back in Michigan, the Pontiac district in Oakland County sold its buses in 1993 and contracted transportation to a private firm in order to save $500,000 annually.

The trend toward privatization of school functions is gathering momentum as it is becoming apparent through experience that it doesn't have to jeopardize quality education. Districts in Michigan and around the country are showing that by applying public-private partnerships, schools can cut costs and improve services at the same time.