Decisions about whether to contract out support services or keep them in-house are influenced by many factors
In some cases, districts find that they can reduce expenses, especially in salary and benefits, or secure specialized services that would be hard to provide in-house, by seeking bids and selecting private companies to do the work.
In other circumstances, districts may find that outside businesses' costs are too high, and that their ability to provide the exact services needed are lacking, so they choose to have the work done by the people already on the payroll.
At the same time, many districts are among the largest employers in their communities, and few school officials are eager to lay off workers they know, even in the name of reducing costs.Districts' decisions about whether to contract out services or keep them in-house are influenced by myriad and often competing factors. School leaders want to cut expenses, while protecting money going to classroom instruction, and the pressure to trim cost was particularly strong during the Great Recession, from which states and districts only recently have begun to emerge.
"Every district wants to be a good employer and make sure that their employees are treated well," said James M. Hohman, the assistant director of fiscal policy for the Mackinac Center for Public Policy, a Midland, Mich., think tank that advocates free-market policies. The center sees contracting out for services, when that work can be performed effectively, as an "established way" for districts to save money, he said.
But unions representing support-service workers view many efforts to privatize services with skepticism.
"Privatization moves quality control away from the parents of the children these services are intended to support," said Ruby J. Newbold, an American Federation of Teachers vice president, in a statement toEducation Week, when asked about districts' decisions to contract out services. She is also the president of the Detroit Association of Educational Office Employees.
Estimates of cost savings through privatization are often exaggerated, Ms. Newbold argued. "Today's privatization bargain," she said, "quickly becomes tomorrow's increasingly costly contract that features less control and oversight."
National data on districts' contracting out for support services are limited, and the information that does exist offers a mixed picture.
A survey of state education departments, conducted in 2007 by the Mackinac Center, found that 13 percent of public school districts taking part in the federal National School Lunch Program contract meal services out to private companies, though the portion of systems doing so in each state varies enormously.
About 10 percent of districts said they outsourced custodial or maintenance services during the 2011-12 school year, according to a survey by the American Association of School Administrators, based in Alexandria, Va. The association also found that a greater number of districts, about 20 percent, said they were considering taking that step in 2012-13.
In Michigan, 61 percent of the state's 549 school districts reported they had privatized one or more support services, a number that has increased steadily from 31 percent a decade earlier, according to a Mackinac Center report released this year. The increases in contracting out were pushed along by changes in state policy from the 1990s to today that have made it easier for districts to privatize certain services, Mr. Hohman said.
Those policies included a 2011 law signed by Gov. Rick Snyder, a Republican, that offered districts financial incentives to obtain competitive bids on noninstructional services.
Even so, the decision to privatize services can be an agonizing one, as was the case in the Lake Orion Community School District, a 7,600-student system north of Detroit, where the school board voted last year to contract its custodial services out to a private company.
Felicia Hicks, a field staff representative for Council 25, the Michigan affiliate of the American Federation of State, County, and Municipal Employees, which represented the district custodial workers, argued that the district's estimates of savings from privatization were overstated, because a contractor could not match the breadth of services provided by the public employees at a lower cost. The decision was not based on realistic "dollar for dollar" and "work for work" comparisons, she argued. "It was a totally misguided decision," she said.The district has seen its tax base shrink by roughly one-third over the past six years or so, with job losses in the auto industry and other businesses, and it has been forced to cut spending, said John Fitzgerald, the system's assistant superintendent for business and finance.
About 50 custodial workers — many of whom handled multiple duties as "jacks of all trades" — lost their jobs, though they were invited to reapply with the private company, said Mr. Fitzgerald.
"It was probably the most dramatic decision the board had made in decades," Mr. Fitzgerald said of going with a private contract. "It was an extremely stressful time. ... These are all people we see every day. These are people the board members are seeing at the grocery store, at the movie theater."