Center’s 2012 School Privatization Survey Shows Largest Increase Ever; State ‘Best Practices’ Incentives May Be Working

335 of 549 districts — 61 percent — now contract at least one major support service to the private sector, up from 31 percent in 2001

For Immediate Release
Tuesday, Aug. 14, 2012
Contact: James Hohman
Assistant Director of Fiscal Policy
Ted O'Neil
Communications Associate

MIDLAND — This year saw the largest increase to date in public schools contracting out for one of their three main noninstructional services, according to the Mackinac Center’s 2012 school privatization survey. Some 61 percent of districts — 335 out of 549 — contract for food, custodial or janitorial services. That is a 13 percent jump over last year, when 54 percent of districts embraced such privatization.

“This unprecedented growth may be partly attributable to the state’s fiscal 2012 budget, which gave ‘best practices’ funding incentives to school districts to solicit bids from private venders to provide support services,” said James Hohman, assistant director of fiscal policy and co-author of the survey. “The results speak for themselves, as many districts took the state up on its offer.”

According to the Center’s annual survey, contracting out for support services has nearly doubled from 31 percent in 2001. Last year marked the first time a majority of districts privatized for food, custodial or busing needs.

Custodial contracting increased the most in 2012, with 217 of the 549 districts using private vendors to clean and maintain district buildings. It has surpassed food service contracting as the most frequently privatized service.

Byron Center Public Schools in Kent County, for example, contracted custodial services to Grand Rapids Building Services and reported being satisfied with the move. The district saved more than $340,000, which is effectively a savings of $100 per pupil.

“Soliciting bids from private vendors adds an element of competition and provides an incentive for quality services at lower prices,” Hohman said. “In addition to saving districts money, privatization frees up resources and allows districts to focus on their real mission: teaching students.”

The survey was conducted from May 14 to Aug. 6 and received responses from all 549 local public school districts. Results for specific districts are available upon request.