Privatization numbers up again

Survey shows more schools contracting for support services

The number of public school districts that contract with private firms to provide at least one major support service increased by a rate of nearly 5 percent in the past year, according to a survey conducted by the Mackinac Center for Public Policy. The Center's sixth survey showed that 42 percent of the 550 conventional public school districts surveyed contract for food, custodial or transportation services, or a combination.

"Survey 2008: School Service Privatization Grows Again," was conducted between May and August by research assistant William Freeland and Michael D. LaFaive, director of the Center's Morey Fiscal Policy Initiative. The Mackinac Center also produces Michigan Education Report.

Food service remains the most frequently outsourced function, with nearly 30 percent of districts reporting having contracted either management or operation of their program. Custodial services were next, at 18 percent, while transportation contracting was reported in about 5 percent of all districts.

In terms of year-over-year growth, the number of schools contracting for custodial services increased by about 20 percent, while transportation contracting increased by nearly 16 percent. However, for the first time in the survey's history, the total number of schools that contract for food service declined. About 2 percent fewer districts reported contracting for food services in 2008 than in 2007.

"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 Public Schools in Oakland County 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.

In addition, Freeland said that a number of district officials commented to Center staff during the survey that "the mere discussion of privatization helped their district obtain financial concessions" from employee unions.

Two districts - Detroit Public Schools and White Pine Public Schools in Ontonagon County - were excluded from the survey. Detroit Public Schools refused to provide data, and Mackinac Center attorneys continue to pursue the information. White Pine was excluded because it has no students.

More details on the survey are available at