Public School Support Service Privatization Increases 8.0 Percent in Michigan

Largest single-year increase, according to Center analyst

For Immediate Release
Friday, Sept. 10, 2010

Contact: James Hohman
Fiscal Policy Analyst
Michael Jahr
Senior Director of Communications

MIDLAND — School support service privatization continues to increase, according to Fiscal Policy Analyst James Hohman, who oversaw the Mackinac Center's 2010 Michigan School Privatization Survey. The number of school districts that contract out for food, custodial or transportation services increased to 269 — 48.8 percent statewide — up from 45.2 percent in 2009. That is an 8.0 percent increase, the fastest year-over-year jump in survey history. Privatization of support services has increased 57.5 percent since 2001, when Center analysts began the survey.

"It's no surprise that more and more districts are contracting out their noninstructional services every year," Hohman said. "Novi Community Schools, for example, will save $3.5 million in less than three years by contracting for custodial services. That is an effective funding increase of $233 per pupil."

The largest increase this year was in custodial services, with 32 districts beginning new contracts with private vendors to clean and maintain facilities. Districts statewide — from metro Detroit's River Rouge School District to the Upper Peninsula's Dollar Bay-Tamarack City Area Schools — began custodial service contracts.

The number of districts contracting out for food service increased by 12. Rochester Community Schools began contracting out the service and expects the move to save $563,403 in its first year — a savings of $38 per pupil.

Transportation increased by 13 school districts, raising the percentage of districts that contract out for this service to 9.3 percent. This year's increases came largely from employee leasing services, which accounted for seven of the new busing contracts.

"With school districts spending increasing amounts of money on health insurance and teacher salaries, more and more districts are turning to privatization of support services as a way to save money," Hohman said.

More information on school privatization can be found here.