Elections may be over, but many of the myths surrounding education funding remain. Contributing to the persistence of so many of those myths is murkiness about what exactly is meant by “education” funding.
For example, based on the latest data from the U.S. Department of Education, K-12 per-pupil spending averages just over $12,000 nationwide. Nearly one-third of that amount, around $3,700, funds support services such as administration, operations and maintenance, and transportation. Another spending category is food services, which costs on average $412 per student. However, amounts vary considerably from $279 per student in Nevada up to more than $760 per student in D.C.
Providing meals to students can be an expensive proposition—particularly in light of onerous regulations imposed by the FDA to make meals healthier.
Contracting out to private providers for noninstructional services, such as food service, transportation, and janitorial services, is a sensible way to keep quality high and costs down. According to a recent report by James M. Hohman and Zachary D. Woodman of the Mackinac Center for Public Policy over the past decade Michigan public school districts are increasingly privatizing such services. As Hohman and Woodman explain:
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. …
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.
Not only do districts save money—which benefits students and taxpayers—district officials also report high levels of satisfaction with private providers. Districts were satisfied with nearly nine out of 10 of their contracts—a rate that has been fairly constant over the past 10 years.
While more school districts are outsourcing a variety of noninstructional services, the overall growth rate of school districts privatizing services slowed significantly in the past year—increasing less than 1 percent compared to more than 4 percent annually over the past five years. Study authors suggest that perhaps as many school districts that can privatize services have already done so.
What Michigan school districts do show is that privatizing noninstructional activities can help direct more education funding where it matters most: into the classroom. Based on these findings, policymakers within and beyond Michigan should consider removing obstacles to further cost-saving privatization efforts, such as examining labor union contracting rules, and encouraging more entrepreneurial activities, such as renting out school facilities after school hours and during vacation times and letting schools conserve those funds rather than increasing local taxes.