Faced with a $7 million budget deficit in 2008, the Southfield School District in Michigan contracted out janitorial, food, and busing services. Hundreds of support staff jobs were lost and the community has felt the negative economic impact of the privatization. Schools have encountered numerous problems, including an increase in the cost of meals and services to students and a decline in the quality of food and busing services.
The Southfield School District in East Lansing, Michigan, contracted out janitorial, food, and busing services in 2008, in an effort to plug a $7 million budget deficit. Over 300 employees lost their jobs to private contractors. The Michigan Educational Support Personnel Association had attempted to halt the privatization effort by presenting the school board with a petition signed by 1,345 residents and business owners in the city opposing privatization. Regardless, on April 22, 2008, the school board voted 5-2 to approve the outsourcing of jobs, claiming the move would help save $6 million and improve outcomes for students.
The next month, the school board hired private companies to provide bus transportation, custodial services, and food services. None of the contracts required that the private companies hire Southfield residents or former district employees.
By November 2008, after just seven months of privatized services, student costs had increased and service quality deteriorated so much that teachers, support staff, and parents held a candlelight vigil to draw attention to the poor outcomes.
According to a study by the Michigan Education Association, the economic impact of the jobs losses is severe. The organization estimates that for every dollar not earned by a Southfield resident, the economic loss to the community is $2.20 or higher, for a total economic impact of $18.6 million to $31 million.
Since private contractors have taken over vital school support functions, quality of services has declined. Elementary students have had irregular bus pick-up and drop-off times because of the inexperience of contracted drivers. Bus routes are poorly organized. Students who live less than a mile away from the school have had to endure bus rides that last over an hour. As of late 2009, no cost savings related to transportation have materialized.
High school cafeterias have served pizza nearly every day instead of the more nutritious meals previously provided by in-house cafeteria staff. According to the Michigan Educators Association, while selections have decreased, meal prices for students rose twice in the first year after food services were contracted out. The custodial services contract also cost the school district more than expected because of cost overruns. Additional problems continue to develop as the school district finalizes contracts with additional private vendors.
Many parents have called the school district to complain about the suboptimal service. But, there is much confusion about who is ultimately accountable for these problems. The district has started referring complaints to the private companies who provide the services, leaving open the question of whether the school or a private company is responsible for the well-being of the district's students.
The Michigan Educators Association (MEA) strongly opposed the privatization efforts. They were heavily involved in the meetings and negotiations before the school board decision to contract out vital school support positions. They issued several press releases to keep the community updated on the status of the privatization. An MEA economist prepared an analysis of the potential financial impact on the community, and the Great Lakes Center for Education Research and Practice produced a report on other impacts and risks of contracting out support services.
