Tuesday, October 20, 2009

Consolidate School Services? Districts?

The Detroit News is highlighting ideas from various groups to promote discussion on reform, restructuring government and the economy.

Idea 11: Intensify school district consolidation. Intensify school district consolidation and service sharing.

Idea 22: Slash school district bureaucracy. Save tax dollars and drive more money into the classroom for students and teachers by reducing excessive administrative overhead in K-12 education.

A law was passed a couple of years ago requiring each Intermediate School District (ISD, or RESA – regional educational service agency, as in the case of Wayne RESA) to prepare a report about potential service sharing opportunities that might save money. The idea was that consolidation of services, without actual consolidation of districts, might create possibilities of economies of scale, and therefore reduce the number of people required to perform many of the support services. Some of this has now occurred, most notable in districts consolidating payroll services and some districts sharing Business Managers. Big savings has not occurred, but every bit of greater efficiency helps.

Resistance to service sharing often comes legitimately because personnel in smaller districts perform multiple tasks. If one of the tasks is contracted out to the ISD, the other tasks still remain to be done. Sometimes, the position can be downgraded to a part-time position, other times it can’t. Until you eliminate the full or partial FTE’s (full time equivalents) of personnel at the local levels, no savings occur. Less defensible, but understandable, resistance comes from the fact that unless you can reduce staff by attrition, layoffs of good people who have become friends must occur, something no one wants to do.

Bottom line: voluntary service sharing will result in very small savings.

Consolidating districts into larger units is another idea promoted by the Detroit News. They mention two ways this might be done:

(1) Pass legislation (patterned after the federal military base closing commission) to establish a School District Streamlining Commission that would conduct public hearings and recommend to the Legislature a 50 percent reduction in the number of school districts from 552 to 276. The recommendation could not be amended and would automatically take effect unless rejected by both houses of the Legislature.

(2) Pass legislation (based on a concept by state Superintendent of Public Instruction Mike Flanagan) that would limit the role of the 552 school districts solely to academic purposes and require the immediate transfer and consolidation of all non-instructional responsibilities to the 57 intermediate school districts.

Either proposed legislation would need to incorporate changes to the Urban Cooperation Act (PA 7 of 1967) which acts as a disincentive to consolidate government entities. It practically requires any intergovernmental service sharing between entities to go to the highest wage and benefit level among the entities, as the act prohibits any employee from being harmed. In other words, all savings is wiped out and often costs would actually increase. That is why the push was to consolidate services via intergovernmental contract, rather than consolidation of entities. Amending the Urban Cooperation Act is promoted by the non-partisan Center for Michigan. See How to save Michigan's local communities.

I have mixed feelings about the consolidation proposals, but come out in favor of such proposals.
  1. Voluntary methods are unlikely to work.

  2. Local school district boards and superintendents cannot withstand the pressures from the unions to grant wage and benefits that the districts can’t afford. A more centralized board might.

  3. The model is used in some other states where the school district is the entire county. In other words, opponents can’t attack this as “It will never work.”

  4. Consolidating every district into the county may or may not make sense. After awhile in increasing size of an entity, you begin to have "dis-economies of scale", where instead of efficiencies, you get layer after layer of bureaucracy. Thus the Streamlining Commission approach has some merit, as the Commission could look at consolidation on a case-by-case basis and recommend consolidation only where it would appear to make sense.

  5. On the other hand, a split between instructional and non-instructional services proposed in the Flanagan approach is tough to make. For example, increasing class sizes is one way to save money, but at the expense of educational goals. Similarly, instructional support personnel, such as parapros, can be a great help in the instructional program, but cost money.

    My theory while I worked as a school business manager was to look at the instructional goals, and the accompanying instructional strategies and tactics to achieve those goals, and budget around those, rather than try to fit whatever instruction can fit within a given amount of money. That derived from my bottom-line focus from private business management, and my realization that student achievement was the objective in schools.

    In short, the instructional objectives are so tied up in the financial decisions, that separating one from the other is almost impossible. Given this difficulty, I would lean in favor of complete consolidation, if the Urban Cooperation Act effects of actually raising costs can be avoided. In some cases, it might make sense to go all the way towards consolidation, and in other cases it might make sense to consolidate the support services of Business Office, Personnel, transportation, custodial, food service and technology support.

  6. Local resistance will be tough, as the concept or “ideal” of local control runs deep in school government. Parents want to feel they have a say in the education of their children. Further, old loyalties die hard. “My granddaddy was an Eagle, my daddy was an Eagle, I was an Eagle, and by God, my kids will be Eagles!” can be heard more times than you care to hear.

  7. Few elected officials will voluntarily give up their positions of power as school board members. For many, this is the most important thing they have ever done in their lives, and the "power" they feel they have is not easily relinquished.

We must push for every efficiency in government that we can, in light of the scarce dollars we have to spend. Increasing the school funding by raising taxes in the face of an economic downturn is not only politically unpalatable, but also counterproductive in encouraging job growth in Michigan.


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