A news service for the people of Michigan from the Mackinac Center for Public Policy

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False School 'Cuts' Narrative Takes Another Hit

Citizens Research Council the latest to debunk it

… funding for public schools has not been reduced … reported that K-12 school spending had indeed increased … key question: Is school funding up or down compared … Falsely Believe Education Spending is Down? Advocates … more

Michigan School Privatization Survey 2014

Click here for a PDF of the study.  

Introduction

In 2003, when it came to contracting out for common public school services, only outsourcing food provision could be considered a rather common occurrence in Michigan. And there was good reason for this: school districts are prohibited from making a profit from their cafeteria, but any deficits created in providing food for students must be covered by general school funds. When deficits occurred, school officials often looked for outside help from food service management companies.

Contracting out for the two other most common noninstructional school services — custodial and transportation services — was rare in 2003. Only one out of 15 districts contracted out for custodial services and even fewer for transportation — one out of 26.

Since 2003, however, there has been an explosion of privatization in these areas. This year, 47.5 percent of districts contract out for custodial services and 24 percent contract out for transportation services. Districts have largely been propelled to contract out for these services based on a desire to save money. The more efficiently districts can provide these noninstructional services, the more resources they can devote to their core function — providing educational opportunities to students.

In addition to this rationale, spending pressures, created in large part by rising employee health insurance and retirement costs, compelled districts to find ways to stretch dollars further. All school district employees are mandatory participants in the state-run Michigan Public School Employees’ Retirement System. Contribution rates for this program increased from 12.16 percent of payroll in 2001 to 34.54 percent of payroll in 2014. Most private sector employers offer retirement benefits that cost between five to seven percent of payroll on average.

These ever-increasing costs help explain why many districts have begun using employee leasing agencies, which allow employees to be paid at the same rates while districts escape the MPSERS payments. Interestingly, this may be a win-win, as employees get to vest their retirement benefits much earlier than under the MPSERS plan. According to Bellweather Education Partners, less than half of all school employees vest in MPSERS’s pension benefits.

This survey finds that in 2014 more school districts contracted out for food, custodial and transportation services than ever before. However, the rate of annual increase in the number of districts that contract out was less than in previous years. Contracting increased from 66.2 percent of districts in 2013 to 66.6 percent of districts in 2014. The average rate of increase over the last five years was 4.3 percentage points.

There may be a many factors contributing to this slowed rate of growth in school privatization. It could be that school support service privatization has topped out. In other words, there may come a time when all the districts that could contract out for quality services while simultaneously saving money have. However, while the percentage of districts grew only slightly from 2013 to 2014, the number of districts in each of the categories surveyed — custodial, food or transportation — that privatized increased at higher rates than the overall number of districts that contract out support services.

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October 17, 2014, MichiganVotes Weekly Report

Key votes from 2013-14

… authority for failed schools: Passed 56 to 54 in … federal government from spending more in any fiscal … with reforming public schools whose performance is … adopted in 2003 to avoid spending cuts in that year s … more

Schauer Jobs Plan Pricetag: $3.7 Billion

Without offsetting cuts or taxes, candidate’s 'Blueprint' blows big hole in state budget

… would go to public schools, universities, community … At a time when state spending has reached a record … benefits, universal pre-school programs and more. Schauer … like cut wasteful spending to save taxpayer … more

Failing to Counter the Big Lie

Gov. Snyder, GOP fail to defend K-12 spending

… with the lowest funded school districts receiving … State of Michigan is spending more state tax dollars … $6,844 per pupil it was spending the final budget … of this year it was spending $7,545 per pupil. … more

Gubernatorial Campaign Should be About Things That Matter

Not false claims and things that don't

… $1 billion from the schools. Most school revenue in Michigan … closely followed. Overall spending on education is up … criticize Snyder for spending reductions, there … more

$2.1 Billion in Michigan Budget Reforms

… Wage would save public schools and universities alone … on Prisons Public Spending, respectively. We … reductions in general fund spending of nearly $3 billion. … on Prisons Public Spending has long argued that … more
Michigan International Speedway

Budget Reform Ideas for 2015 and Beyond

… government (roads and school construction, for instance). … line item amounts to spending that should be held … community colleges and school districts. Repeal … adapted to reduce state spending by $866 million. … more

All Four Teachers in New Schauer Ad Claiming School Cuts are in Districts Receiving More Money

… from four different school districts who claim … Falsely Believe Education Spending is Down? Advocates of More Education Spending Ignore Billions in … cut funding to public schools. This claim has been … more

Challenging the Rhetoric in the War on Charter Public Schools

Q A with the Democrats pursuing a moratorium on school choice

… additional charter public schools in Michigan. While … companies, but conventional school districts have been spending millions of dollars … per-pupil revenue and spending data. All … more

Mackinac Center for Public Policy Director of Education Policy Audrey Spalding describes her latest study on right-to-work law violations in public school contracts and suggests why districts and unions are ignoring the law.


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