School Services Privatization Rises for Fifth Consecutive Survey, According to Mackinac Center Research

Competitive contracting rate up 4.9 percent statewide

News Release
Thursday, Aug. 14, 2008

Michael D. LaFaive
Director of Fiscal Policy

MIDLAND — The Mackinac Center for Public Policy today unveiled the results of its sixth survey of school support service privatization, which shows that more than 42.2 percent of 550 conventional public school districts surveyed[*] in the Great Lakes State contract out for at least one of the three primary noninstructional services — food, custodial and transportation. "Survey 2008: School Service Privatization Grows Again" found that 10 net new districts are now contracting for at least one support service, a 4.9 percent rate increase from 2007.

The research was conducted by William Freeland, a research assistant with the Mackinac Center, and Michael D. LaFaive, director of the Center’s Morey Fiscal Policy Initiative. "This is the Mackinac Center’s fifth survey in a row that reveals a net up-tick in district privatization across the state," Freeland said. "In addition, literally dozens of district officials volunteered to Center staff that the mere discussion of privatization helped their district obtain financial concessions from otherwise recalcitrant public employee unions. So privatization can produce savings even if districts ultimately choose not to contract."

The survey was conducted between May 20 and Aug. 13, 2008.

"Done correctly, privatization can save money and improve services from districts as diverse as Southfield with 8,800 students to tiny Arvon Township in the Upper Peninsula with 14," LaFaive said. He noted that Southfield is new to the "big three" of school privatization this year — having recently contracted for food, busing and janitorial services. Average annual estimates of savings in Southfield over the next three years range from $557 per pupil to $814 per pupil. "By far, this is the largest per-pupil savings from privatization the Mackinac Center has ever seen," LaFaive added.

Custodial service privatization continues to show dramatic year-over-year growth. Statewide, 17.6 percent of districts have private firms doing all or part of their janitorial work, a 20.2 percent rate increase in just one year.

Busing services also show an increase in this year’s survey to 5.5 percent of the 550 districts successfully surveyed, up from a revised 4.7 percent. That represents a 15.8 percent increase in the rate of transportation-related contracting, though the total number of districts is relatively small. The Mackinac Center excludes all special education privatization and field trip contracting from its survey tally.

Food service remains the most frequently outsourced function with 29.1 percent of districts reporting having contracted either management or operation of their program. For the first year in the survey’s history, food service contracting declined in net terms, although by a modest rate of 2.1 percent.

More details on the survey are available at For more information on school privatization in Michigan, visit

[*]Two districts — Detroit and White Pine — were excluded from the survey. Detroit Public Schools refused to cooperate and Mackinac Center attorneys continue to pursue the information. White Pine was excluded because it has no students.