Privatization debate divides Oakland, Macomb schools

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Capital News Service
LANSING – Romeo Community Schools would have saved $848,000 in two years if it had privatized its custodial and transportation services, but the school board decided against it.
“We have wonderful employees,” said Superintendent Nancy Campbell. “These are the people that we know, they live here and they work here. The only reason privatization was brought up was for financial reasons. Schools have nowhere else to look.”
The board’s decision made Romeo the odd man out, according to a study by the Mackinac Center for Public Policy, which found that more districts privatized support services in the past year than ever before.
“We contacted all 551 public school districts in Michigan to find out whether they contract out for food, custodial and transportation services,” said James Hohman, the fiscal policy analyst in charge of the survey at the Midland-based center, a free market-oriented think tank. “We found this year that contracting out these services is at a record level – nearly half of all districts contract out for one of them.”
Hohman said the amount saved by privatizing services varies, but it is usually in the range of 10 to 25 percent.
Rochester Community Schools hires outside workers as substitute teachers, hall monitors and food services workers, said staff director of communications Debbi Hartman.
“The savings are significant,” Hartman said. “With the hall monitors we saved $65,000. With the food service it was over $200,000.”
Troy School District privatized custodial, transportation and food services, Kerry Birmingham, director of community and media relations said. Contracting these jobs out has saved the district about $3 million a year.
“It certainly wasn’t a decision that Troy schools took lightly,” Birmingham said. “We felt in these tight economic times that putting as much of our resources as possible toward the instruction and programming for the kids was the right thing to do.”
L’Anse Creuse Public Schools is also feeling the burn from tight economic times, community liaison Michelle Irwin said, but chose alternative methods to save money.
“We get very creative,” Irwin said. “We streamline things as best we can. We ask people to take on greater responsibilities. We’ve made lots of cuts throughout the last 10 years and, lastly, we look for alternative funding that’s out there. We look for grants.”
Irwin added that L’Anse Creuse also receives $35,000 to $50,000 a year from the L’Anse Creuse Foundation, a volunteer fundraising group.
Hartman and Birmingham both said that so far neither the Rochester nor Troy districts has seen a change in quality of services, but Doug Pratt, director of public relations at the Michigan Education Association
The MEA is the state’s largest union of public school employees.
“All over the state we hear from people about classrooms that aren’t being cleaned effectively,” Pratt said.
“We hear from schools where in the cafeteria, the private contractor instead of serving healthy meals day in, day out, is serving pop and pizza every day because that’s what maximizes their profits. So we think quality’s a huge issue.”
Risk of lower quality is minimized, however, because districts generally contract out only services not directly related to the education of students, said Brian Jacob, an economics and educational policy professor at the University of Michigan.
“People rarely talk about privatizing your third-grade math teacher or privatizing the principal,” Jacob said.
The Mackinac Center’s Hohman, on the other hand, said that 90 percent of districts studied said they were satisfied with their services from private companies.
Nevertheless, the MEA’s Pratt said the union also questions whether privatization creates real savings.
He said savings often don’t materialize because private contractors offer a low estimate to win the contract, then have the freedom to do as they wish with prices.
“The best example is with transportation,” Pratt said. “You’ve got a contractor who comes to a school district and says, ‘Privatize with us and we’ll take care of your transportation and we’ll even buy your buses from you.’
“And so the school district then accepts the lowball offer and sells its buses. Then the contractor can hold them over a barrel because the schools aren’t going to have enough money to buy new buses,” he said.
“They’re stuck.”
However, Hohman said most contracts have escape clauses that districts can use to cancel their agreements with contractors.
Although U-M’s Jacob said the basic economic principle of privatization is redistribution, not elimination, of jobs, Pratt questions exactly where those jobs are going.
“It’s the same companies that do it all over the place, and in fact the majority of them are out-of-state or out-of country organizations,” Pratt said.
One example is Chartwells, a British-owned food service company that supplies districts around Michigan, including Rochester.
“The profits from these contracts aren’t staying in our communities,” Pratt said. “They’re being sent overseas or to other states. You’re eliminating good jobs in your community and sending a check to someplace else.”
With such conflicting factors, school districts face a difficult decision when it comes to privatization.
Some, like Rochester and Troy, take the savings and risk a change in quality, Pratt said. Others, like Romeo and L’Anse Creuse, choose to retain employees over possible savings.
“Our number-one business is instruction,” Campbell of Romeo said. “The money to operate the districts will have to come from somewhere else.”

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