Contents of this issue:

  • Report finds schools can save money by sharing services

  • Denver passes merit pay for teachers

  • Fowlerville could open enrollment

  • Ann Arbor school officials puzzled by achievement gap

  • Holland talks fail to progress

  • Private firms come to aid of Muskegon schools

  • Former union official accused of embezzlement


Washington, D.C. — Shifting just a quarter of non-instructional costs to shared services could save public schools $9 billion a year, according to a new report from Deloitte Research and the Reason Foundation.

The report, titled "Driving More Money into the Classroom: The Promise of Shared Services," concluded that sharing services is a better money-saving alternative than school district consolidation because it combines the educational advantages of a small district with the buying power of a larger one, according to a press release issued by the report's authors. While the private sector has practiced cost sharing for years, and the trend has become more common in the public sector, it is rarely used in public schools, the report said.

"School funding and per-pupil spending are always hot-button issues," said Lisa Snell, co-author of the report and director of education at the Reason Foundation. "Sharing services gives schools and districts a great opportunity to send a lot more money straight to classrooms, where it belongs."

About 40 percent of education dollars in most states are not spent in the classroom, the report said, but rather on business operations such as food service, janitorial, maintenance and transportation. Sharing those services among school districts would not only save money, but also attract more qualified staff, allow for mandatory minimums and provide greater transparency by dividing budgets into instructional and non-instructional categories.

"Non-instructional services are vital to the success of American schools, but too often take money away from the ultimate goal — educating children," said William Eggers, Deloitte Research's global director-public sector.

The savings of $9 billion a year could be used to build 900 new schools or hire more than 150,000 new teachers, the report said. Taxpayers also prefer shared services over consolidation in an effort to save money. The report cites a 2002 Michigan State University survey that found 43 percent of Michigan residents favor sharing resources as a way to cut costs, while only half as many people favored consolidation.

Reason Foundation, "Driving More Money into the Classroom: The Promise of Shared Services," Nov. 1, 2005

Mackinac Center for Public Policy, "The Six Habits of Fiscally Responsible School Districts," Dec. 3, 2002

Mackinac Center for Public Policy, "Contract Out For Services Before Laying Off Teachers," June 2, 2003


Denver — Denver voters agreed last week to pay an additional $25 million in property taxes as part of a plan to reform the way teachers are paid and reward them for student achievement, the Denver Post reported.

The ballot measure, called ProComp, not only will reward teachers for student performance, it also will give bonuses for taking on "hard to teach" subjects or teaching in tough schools, the Post reported. The plan phases out the current union-negotiated salary structure.

"(Denver Public Schools) will be the best big-city school district in the United States," Mayor John Hickenlooper told the Post.

ProComp passed 58-42 percent, despite opposition from many teachers.

"I'm 100 percent against it," teacher Anna Cafaro told the Post. "I just don't think it's an effective way to pay teachers."

ProComp will allow teachers to make as much as $80,000 to $90,000 a year, depending on what they do to earn it, the Post said, as compared to a top salary of $54,185 now for a teacher with 13 years of experience and a master's degree.

Current teachers have seven years to opt into the plan, the Post said. All new hires as of January 2006 will automatically be enrolled.

The Denver Post, "Pay-reform plan for teachers OK'd," Nov. 2, 2005

Michigan Education Report, "Denver Teachers' Union Approves Merit Pay Plan," March 30, 2004

Mackinac Center for Public Policy, "An Agenda for Choice and Quality in Education," April 5, 1993


Fowlerville, Mich. — The last school district in Livingston County to reject open enrollment could soon begin accepting students from outside its boundaries.

Fowlerville Community Schools could become a schools-of-choice district, according to The Ann Arbor News. Superintendent Ed Alverson has asked the school board to consider a pilot program for the 2006-2007 school year in select grades.

The News reported that Fowlerville's per-pupil state funding has generated about $21 million a year for the past four years, but higher costs for employee health care, retirement, energy and diesel fuel forced the district to cut $500,000 in transportation, staffing and other areas during that same period.

Neighboring school districts Howell and Webberville have announced they will no longer allow a student to finish out a school year in Fowlerville if the student moves into their district mid-year. A student could return if Fowlerville becomes a school-of-choice district, the News reported.

"(The Howell and Webberville districts) want the foundation allowance because they're trying to survive in this Michigan economy, too," Alverson told The News.

Alverson referred to the "stagnant" foundation allowance, which is the state's per pupil funding, as one reason for the need to change to a schools-of-choice district, The News reported. Public Act 155 of 2005 set the 2005-2006 fiscal year school aid budget at $12.7 billion, up from $12.4 billion the previous year, and increased the minimum per pupil funding by $175 to $6,875.

The Ann Arbor News, "Fowlerville schools considering open enrollment," Oct. 28, 2005
http://www.mlive.com/news/aanews/index.ssf?/base/news-5/1130510700250180.xml& coll=2

MichiganVotes.org, "2005 House Bill 4887 (2006 Appropriations School Aid Budget)"

Mackinac Center for Public Policy, "Do Schools Really Need More Money?" Sept. 3, 1993

Michigan Education Report, "Public Schools of Choice Give Parents More Options," Jan. 18, 1999


Ann Arbor, Mich. — The achievement gap between white and black students in the Ann Arbor Public Schools grew in 19 of 31 categories during the past year, according to The Ann Arbor News.

The gap, measured in areas such as test scores, failure, graduation and suspension rates and participation in remedial and advanced classes, grew or remained unchanged in more than half the categories, The News said.

District officials released the numbers for the 2004-2005 school year at the end of September, but were met with questions from board of education members.

"We have made a commitment to move the numbers and they didn't move in the right direction," board Vice President Susan Baskett told The News. "My frustration is it's just not acceptable. We have a wealth of resources and we're coming up with pitiful results."

Ann Arbor Public Schools received more than $10,000 per student from local, state and federal sources, according to the 2003-2004 Bulletin 1014 issued by the Michigan Department of Education.

Despite spending $2 million a year for a ninth-grade program aimed at increasing student performance, the number of black students with grade point averages below 2.0 in core subjects was 58 percent, The News reported.

Baskett told The News she thinks the district's focus on building a new high school and using a bond approved by voters in 2004 to make other building upgrades took focus away from helping students.

"We got distracted with that bond," she said.

The Ann Arbor News, "Puzzled by the gap Ann Arbor school officials aren't sure why their push to narrow the achievement gap between black and white students hasn't worked," Oct. 30, 2005

Michigan Department of Education, "2003-2004 Bulletin 1014," June 2005

Mackinac Center for Public Policy, "How Ideology Perpetuates The Achievement Gap," Feb. 2, 2005

Mackinac Center for Public Policy, "Less Government, Not More, Is Key to Academic Achievement and Accountability," Oct. 3, 2001

Mackinac Center for Public Policy, "What Can't Brown Do for You?" May 17, 2004


Holland, Mich. — A state mediator left contract talks last week between the Holland Public Schools and teachers' union after 75 minutes due to lack of progress, the Holland Sentinel reported.

The two sides talked for another 90 minutes after mediator Jim Corbin of Lansing left, but no agreements were reached, the newspaper said.

"I think we're all a little frustrated, it's been seven months now," school board Treasurer Kevin Clark told the Sentinel. "We do believe there's a sense of urgency. I think that's why we're disappointed there was no progress."

Holland Education Association President Charles Bullard also expressed frustration.

"The target continues to be moving," Bullard told the newspaper. "It's very frustrating when we request numbers and the numbers are continuing to move."

Holland Public Schools offered teachers a health insurance plan worth just over $13,000 per teacher per year, the Sentinel reported. The HEA proposed a plan that would cost $14,390 per teacher. Current health care costs in the district are $15,360 per teacher annually, the Sentinel said. A Kaiser Family Foundation study found the average family insurance plan nationwide for 2005 costs about $10,880.

Talks between the union and district have included the use of the Michigan Education Special Services Association, a health insurance administrator established by the Michigan Education Association. The Sentinel reported health insurance costs are approaching $5 million a year, or about 12 percent of the district's total expenses.

The Holland Sentinel, "No progress in contract talks," Nov. 3, 2005

Kaiser Family Foundation, "Survey Finds Steady Decline in Businesses Offering Health Benefits to Workers," Sept. 14, 2005

Michigan Education Digest, "Holland teachers prepare for strike," Sept. 27, 2005

Michigan Education Digest, "Holland district concerned about possible illegal teacher strike," Sept. 20, 2005


Muskegon, Mich. — Private sector companies stepped in and provided vision and hearing tests for hundreds of Muskegon County school children after the Muskegon County Health Department announced it lacked funding for the annual screenings.

The Muskegon Chronicle reported that privately owned hearing and vision providers offered their services after the health department said it would only test about 60 percent of the 20,000 to 30,000 students it normally screens each year.

Mary Fisher, owner of North Muskegon EyeCare, recently tested about 200 students at North Muskegon Elementary School in one day. Fisher also recruited Advanced Hearing Inc. to conduct free hearing screenings, according to the Chronicle.

"It's such an important thing that the kids have their screenings done," Fisher told the Chronicle. "It's absolutely worth all the time that's necessary to do it."

Fisher said children who have trouble with hearing or vision could eventually have problems learning.

Gilda Sonnichsen, owner of Advanced Hearing, said children with hearing roblems sometimes are thought to have behavior problems, too.

"If a parent says something to them, they may hear it differently and go off in a different direction," she told the Chronicle. "Parents think they're misbehaving or say 'are you crazy?' and teachers do, too."

Muskegon Chronicle, "Private sector steps in to test hearing, vision," Nov. 1, 2005
http://www.mlive.com/search/index.ssf?/base/news-7/ 1130859915267030.xml?muchronicle?NEM&coll=8

Mackinac Center for Public Policy, "When Opposites Attract: Public Schools and Private Enterprise," Feb. 7, 1994

Mackinac Center for Public Policy, "Making Schools Work: Contracting Options for Better Management," Jan. 1, 1994


Buckley, Mich. — The former treasurer of the Northern Michigan Education Association has been accused of embezzling more than $40,000 from the union, according to the Traverse City Record-Eagle.

Ricky Dean Conway, 44, faces three felony counts of embezzlement over $1,000 and under $20,000 in the 86th District Court, the Record-Eagle reported. Conway faces up to five years in prison and restitution if convicted.

A forensic review of credit card records showed more than $17,800 of use at casinos in Michigan and Louisiana, the newspaper said. Conway, a cook at Buckley Community Schools, was treasurer of the union from 1998 until February 2004.

An audit discovered more than $37,600 missing from the union's account, and an additional $2,851 missing from the Buckley Educational Support Personnel Fund, the Record-Eagle reported.

According to the Michigan Education Association's Dave Bowman, steps have been taken to prevent future embezzlement attempts.

"We lost a great deal of money that we may never completely recover," Bowman told the Record-Eagle.

Traverse City Record-Eagle, "Former official charged," Nov. 5, 2005

Mackinac Center for Public Policy, "Michigan Union Accountability Act: A Step Toward Accountability and Democracy in Labor Organizations," Dec. 15, 2001

Michigan Education Digest, "Judicial Board Censures Kalamazoo Union President for Misusing Funds," July 19, 2005

Mackinac Center for Public Policy, "The Michigan Education Association: Is Michigan's Largest School Employee Union Helping or Hurting Education?" 1998

MICHIGAN EDUCATION DIGEST is a service of Michigan Education
Report ( http://www.educationreport.org), a quarterly newspaper
with a circulation of 140,000 published by the Mackinac Center
for Public Policy ( http://www.mackinac.org), a private,
nonprofit, nonpartisan research and educational institute.

Contact Managing Editor Ted O'Neil at

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