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Mackinac
Center: More Schools Outsourcing
Gongwer News Service, August 8, 2005
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A growing
proportion of the state's school districts are replacing
non-instructional staff with private contractors, the Mackinac
Center for Public Policy said in releasing a survey of
districts.
The group found that 35.5 percent of the state's 552 school
districts have privatized some services, up from 34 percent in
2003 and 31 percent in 2001. In most cases, the districts are
hiring an outside company to provide food service, but the
survey showed growing interest in outsourcing janitorial and
transportation services as well.
But release of the report also served to inflame the battle
between private enterprise proponents, such as the Mackinac
Center, and school employee unions.
"Done correctly, privatization can and does save money and often
improves the quality of services for school districts willing to
implement this cutting-edge management technique," said the
report, written by Michael LaFaive, fiscal policy director for
the Midland-based think tank.
But Karen Schultz with the Michigan Education Association said
many districts end up spending more on the contracted services
in the end than they would have by retaining school district
employees. "What we have found in many instances of privatizing
that the idea of subcontracting is going to save money is often
more a ruse," Ms. Schulz said.
Marshall Grate, an attorney who works with school districts
considering privatizing services, said contractors can provide
not only savings, but also more stable costs. "The subcontractor
commits to a 3-year contract," he said. "With the MEA, you have
escalator factors in health care costs and pension costs."
While any actual savings depend on the pay and benefits provided
to the district employees, Mr. Grate said contracted services
can cut costs by between 30 percent and 50 percent.
While the survey showed 28 percent of school districts contract
for food service, Mr. Grate said the most potential savings is
in contracting for janitorial services. Some 8.7 percent of
districts now have a private janitorial service, up from 6.6
percent two years ago, the survey showed.
Ms. Schultz said the contracts open up other issues beyond
money. "There are lots of problems that arise when employees are
no longer employees of the district," she said.
Among those problems is security when school district employees
are not familiar with the contractor's staff, she said.
Mr. LaFaive said some districts have had bad enough experiences
with contracting that they have returned to providing the
services with district employees, though he said the survey did
not show exactly what issues drove the return. Since 2001, 27
districts that had been contracting for services ended those
contracts, he said.
"It was still net plus, but there was turnover," he said.
Linda Wacyk with the Michigan Association of School
Administrators expected a growing number of districts to look at
privatizing services as long as there is a chance of savings.
"We have school districts that are on the verge of closing their
doors," she said. "As long as they're not reducing services to
kids, it seems like a reasonable approach."
The MASA has not, Ms. Wacyk said, taken any official position on
the wisdom of contacting, nor has it provided services to its
members on the issue.
Ms. Schultz said the MEA has been working with its members to be
sure they at least know the questions that should be asked about
a proposed contract. While school officials often bring
proposals showing cost savings, she said many school board
members do not question the figures or claims that the
contractor will provide better service or will be more flexible.
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