Study shows Alabama schools could save millions by privatizing non-educational services

September 3, 2014

Bob Kellogg Bob Kellogg

Bob Kellogg is a freelance journalist. His work regularly appears on OneNewsNow.com.

TROY, Alabama – A study being released today through Troy University shows that Alabama schools could channel millions of dollars back into the classrooms by privatizing non-educational services.

moneytreeDavid J. Smith, assistant professor of economics at Troy, the author of the study, found that Alabama Public School Districts could funnel millions of taxpayer dollars back toward educating students by contracting out for auxiliary services such as transportation, food service and maintenance.

Smith says the problem to date is many schools are resorting to budget cuts to provide savings, adversely impacting the quality of education. He his survey shows that contracting for non-educational services has been seriously underutilized.

“Just as we hire professional plumbers or companies contract with lawn maintenance companies to mow their lawns, it makes sense for school administrators to contract out for these non-educational services,” Smith says. “Asking school officials to juggle transportation schedules and understand dietary guidelines is kind of like asking a teacher that doesn’t know a punt from a pass to coach football.”

He further notes that contracting for auxiliary services does not have to come at the cost of quality because, unlike in-house providers, contractors specialize in the provision of that service, can obtain economies of scale and are “exposed to the competitive disciplinary forces of the market.” School districts employing privatization services are reporting a high level of satisfaction. They say they’re getting higher quality service when compared with doing it in-house.

Smith says Alabama schools spent nearly $1.4 billion, or about $2,000 per student, just for food, maintenance and transportation during the 2010-2011 school-year. That’s 20 percent of the state’s education budget. Even a modest savings, he says, could potentially result in millions of dollars in savings.

So what’s good for Alabama should be good for the rest of the country. Why aren’t more schools taking advantage of privatization? In one word—unions.

Smith says there’s been a lot of resistance from unions because non-educational service providers at the schools have been included in union membership. It gives unions more clout and there are a lot more dues-paying members than there would be otherwise.

In Alabama, only one-fifth of school districts contract for auxiliary services. Smith says unions are a factor but not a prominent one. He believes those services have been done in-house for so many years that many administrators just haven’t bothered exploring the option. Maybe realizing that they could be saving millions that could better be utilized for education could persuade them.

Michigan uses privatization to a far great extent but Smith says, “Other states are definitely looking into this as well. Across the nation, 30% of school districts contract for transportation services, 17.7% of school districts contract for maintenance … and for food management across the nation it’s 13.2%.”

And there’s another advantage to privatizing auxiliary services, according to Smith. Many schools he says complain of not being able to dismiss non-educational employees who are protected by unions.

As an example, he says a janitor in the Birmingham school district was known to have threatened one student, given a marijuana cigarette to another and had shown sexually explicit photos to a female employee of the school. The Alabama Education Association rules prevented the school from firing the janitor. Instead they were forced to transfer him to another school in that same district.

Smith says contracting out non-educational services with a private firm can help districts hold those firms accountable for the conduct of their employees and make sure they’re properly vetted, helping eliminate incompetent and even dangerous employees.

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