NSLP: National School Lunch Program
FSMC: Food Service Management Company
Public School Food Authority: Governing body responsible for the administration of one or more schools with the authority to run a school food program.
How to use school money effectively is a perennial question, and contracting school support services with a private vendor — a process known as "privatization" — has increasingly become an important answer. The reason is
simple: Done right, privatization can save money and improve services. As
described in the Mackinac Center for Public Policy’s newly published book "A
School Privatization Primer for Michigan School Officials, Media and Residents," local budget challenges and key changes to state law have driven Michigan districts to focus on saving money for the classroom — something that the contracting of food, bus and custodial services can provide.
Done right, privatization remains an effective management tool for school districts across Michigan.
Survey data compiled by the Mackinac Center since 2001 suggest
that Michigan school districts have increased their use of competitive
contracting with private firms for school support services in recent years. From
2005 to 2006 alone, the percentage of districts that contracted food, busing or
janitorial services rose from 35.5 percent to a revised 37.4 percent — a 5.3
percent single-year increase. The Center’s 2007 school privatization survey is
not yet complete, but preliminary results suggest yet another significant hike
in school competitive contracting statewide.
In the Great Lake State, food services have been the most
popular school support function to privatize. In late 2006 and early 2007, the
Mackinac Center surveyed all 50 states and determined that about 13.2 percent of
conventional public school districts nationwide contract with a private firm to
help manage or provide school food services. This is well below Michigan’s
state-reported rate of 28.8 percent — the fourth highest in the nation — yet
Michigan’s rate pales compared to Rhode Island at 86.1 percent and New Jersey at
64.4 percent. Clearly, even with food service contracting, Michigan school
districts are not alone.
And consider school bus services. Robin Leeds, a school
transportation industry consultant with more than 25 years of experience, says
that in Connecticut and Massachusetts about 90 percent of students (public,
private and parochial) ride to and from school on privately owned or managed
buses. She told this author that the tradition of privately provided
transportation evolved from a time when parents and schools paid farmers to take
their children to school in horse-drawn carts and wagons. There remains much
room for growth in the privatization of school transportation in Michigan; as of
August 2006, a revised 22 Michigan school districts contracted with a private
firm for busing services to some degree (excluding special education
While school transportation contracting is not yet an area of
obvious growth in Michigan, custodial contracting is — and dramatically so. From
2005 to 2006, custodial contracting in Michigan school districts expanded by 26
percent from 50 to 63, or from about 9 percent of Michigan school districts to
11.4 percent. Preliminary results of the Center’s 2007 school privatization
survey indicate that the number of Michigan school districts contracting for
custodial work is likely to have increased by a similar percentage again in the
past year. The national figure for school custodial contracting is harder to
come by, but a 2001 American School & University magazine survey put the figure
at just over 8 percent.
All of this shows that competitive contracting for school
services is not new. But privatization has gained momentum in Michigan — and
will likely continue to do so — due to changes in Michigan law since 1994.
In light of these incentives, it’s important that school
districts contract well. The Mackinac Center’s privatization primer describes 10
rules of thumb for contracting success. They include encouraging district
officials to study the success or failure of other districts that have
privatized — a visit to neighboring schools that employ vendors is a must.
Districts also should work hard to ensure that plenty of contractors will want
to vie for the service. Increased competition can lower the cost. And just as
importantly, officials must be prepared to monitor deals after the contracts are
signed to ensure that all the private contractor’s promises are being kept.
Done right, privatization remains an effective management tool
for school districts across Michigan. Getting privatization right is vital
because failure unnecessarily hurts the community and fails teachers and kids
who need every available dollar to be spent in the classroom — not on buses,
kitchens and lavatories.
Michael D. LaFaive is director of the Morey Fiscal Policy
Initiative with the Mackinac Center for Public Policy, a research and
educational institute headquartered in Midland, Mich.
Permission to reprint in whole or in part is hereby granted, provided that the
author and the Center are properly cited.