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More Dangerous, More Costly: An Analysis of Transportation Outsourcing

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The decision to outsource school district functions like transportation is a serious one, and it carries significant safety and financial risks.

Times have been tight for many Minnesota school districts, and the pressure to spend money wisely is intense. In this climate, outsourcing district functions like transportation to outside vendors can become politically appealing, as the argument for outsourcing often comes with promises of financial savings and a quality of service as good as (or better than) what the district can provide in-house. These promises,
however, often go unfulfilled.

After analyzing safety inspection and financial data gathered by Minnesota state agencies, this report finds that outsourcing transportation services leads, on average, to higher safety inspection failure rates and higher spending on transportation. Taken together, these findings suggest that the argument for outsourcing is, in fact, a weak one for Minnesota schools. While individual counter-examples may exist, the overall data pattern is that outsourcing is less safe for students and more costly for districts than keeping transportation inhouse.

Based on these findings, it is recommended that school districts exercise caution when making the decision to outsource. Specifically, they are encouraged to compare their existing safety record with that of possible vendors and to investigate the real transportation spending of many similar districts that have chosen to outsource. Failure to do so may lead to greater safety concerns for students paired with greater financial costs for the district.