News Story

Survey: Most Michigan Schools Outsource Noninstructional Services

70 percent of districts privatized food or other services, up from 29 percent in 2001

Farmington Public Schools is expected to save $1.4 million this year after privatizing its custodial services for the first time. The district is one of several public school districts that have recently turned to privatizing noninstructional services, joining others that have used the practice for years.

Farmington estimates the district will save $4.2 million over three years because of the move. The district reported its findings to the Mackinac Center for Public Policy for its “Michigan School Privatization Survey 2016.”

“Over the past several years,” the report said, “there has been a slow and steady increase in the number of school districts tapping the private sector to perform services that were once performed directly by district employees.”

George Heitsch, superintendent of Farmington Public Schools, said in an email that privatization was a "new economic reality." 

"Unfortunately, this is the new economic reality for public school districts -- having to make difficult choices that support our desire of keeping resources available for classroom instruction," Heitsch said. "We regret the disruption that this has caused our community, staff and families."   

In recent years, public school districts in Michigan have increasingly contracted out at least one of three noninstructional services covered by the report — food, custodial, or transportation. Over 70 percent of districts in the state have contracted out for at least one the three services in the last year, a slight increase from 69.7 percent in 2015.

A private vendor is now used in 379 of 541 districts in the state for at least one of the three services. In 2001, the first year the survey was conducted, only 31 percent of districts used private contracts for one or more of these services.

James Hohman, a co-author of the study and the assistant director of fiscal policy at the Mackinac Center, said that increasingly, districts have used privatization to meet their needs.

“Using private contractors to provide noninstructional services has grown from being somewhat unique to being mainstream,” he said. “Clearly, many school districts are finding value in turning to the private sector to meet their needs.”

The survey was based on telephone interviews with districts, which were conducted between May 11 and June 30, 2016. The Mackinac Center submitted Freedom of Information Act requests to districts that asked for them, the study says. The Center has had a perfect response rate on the survey since 2005.

The survey also probed for districts' satisfaction with their private contractors. Nearly all districts, or 89 percent, said they were satisfied. Less than 3 percent were unsatisfied.

A majority of districts in the state — 277, or 51.2 percent — contract out for custodial services. Nearly 43 percent, or 231 districts, have privatized food services. The least outsourced major service was transportation, with 137 districts, or 25.3 percent, depending on a private contractor in 2016.

The districts that privatized custodial services this year include Farmington Public Schools, Clawson Public Schools and North Huron Schools. Districts with newly privatized food services are the Calumet-Laurium-Keweenaw School District, Carson City-Crystal Area Schools and Ellsworth Community Schools. Districts with newly privatized transportation services are East Grand Rapids Public Schools, Montrose Community Schools, and Mid Peninsula School District.