News Story

Royal Oak Schools: Buses or Cadillac Health Care?

Royal Oak public schools eliminated bus service for general education students and saved $593,162, according to the district, but taxpayers there will still continue through the 2011-12 school year to pay 100 percent of the premiums for its teachers' health care costs.

Had the district only paid 80 percent of those costs, as per Gov. Rick Snyder’s proposed “best practices,” the district would have saved $894,707 in 2010-11. That calculation came from using the cost of insurance per teacher provided by the district in a Freedom of Information Act request sent this past summer.

Is it fair to say that had the district’s costs been more in line with the private sector, it could have continued busing?

“If a district chooses to purchase health insurance for teachers that far exceeds private sector averages, larger tradeoffs than would otherwise be needed will have to come from other areas of the budget,” said Michael Van Beek, the education policy director at the Mackinac Center for Public Policy. “In this case, at least one of those tradeoffs was an elimination of busing.”

Superintendent Shawn Lewis-Lakin, who joined the Royal Oak district on July 1, balked at the notion that the district paying 100 percent of health care was linked to the elimination of busing for students.

Lewis-Lakin said, among other things, that Gov. Rick Snyder’s per-pupil funding reduction, the reduction in federal special education dollars and the elimination of American Recovery & Reinvestment Act subsidy dollars in 2011-12 all impacted the budget.

“There were and are more than two variables (transportation and health care costs) that impact budget decisions,” Lewis-Lakin wrote in an email.

The benefits-for-buses comparison “ignores the many other factors that have impacted and continue to impact school budgets,” Lewis-Lakin wrote. 

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.