Budget & Finance

Schools Look to Private Sector for Savings in Michigan

By Sean Cavanagh — August 15, 2012 1 min read
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Michigan school districts, presumably in search of financial savings, are outsourcing an increasing number of non-instructional services to private contractors, a new survey shows.

The survey, conducted by the Mackinac Center for Public Policy, found that 61 percent of school systems in the state, or 335 out of 549, are contracting out for custodial, food, or transportation work. That’s an increase from 54 percent the previous year. (See graphic below.) The amount of outsourcing by districts in Michigan has been on the rise for a decade, according to the center, a supporter of free-market principles in education and other areas of policy.

The center, which conducts annual “privatization surveys,” says one factor in the outsourcing uptick could be the state’s 2012 budget, signed by Republican Gov. Rick Snyder, which included a provision offering financial incentives to school districts to seek competitive bids for nonclassroom services.

The biggest increase in private contracting came in custodial services, with 46 additional districts going that route. Nearly 40 percent of the state’s districts now contract out that cleaning and sweeping and upkeep work to private providers, making it the service most likely to be outsourced.

Ninety districts now contract out transportation services, a 33 percent jump over the previous year. Thirty-five percent of districts now outsource food-service work, a slight increase over the previous year.

The rise of private contracting in Michigan is almost certainly a reflection of the financial woes facing schools there, pressures that are playing out to varying degrees in states across the country. Michigan’s not the only state to offer financial carrots to districts to find creative ways to save. New York Gov. Andrew Cuomo, a Democrat, has offered extra money to districts that devise innovative approaches to budget-cutting.

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A version of this news article first appeared in the Charters & Choice blog.