Taxpayers and students won a small but potentially very important victory Friday when Administrative Law Judge David M. Peltz found that the Legislature did not give unions the authority to sidetrack privatization of non-instructional services by school districts. The decision came in the first round of what may still prove to be a lengthy administrative and legal battle over the meaning of amendments to the state collective bargaining law that the Legislature passed last year as part of the "Race to the Top" reform package. Nonetheless, the decision improves the chances that school districts will retain the right to privatize services, and strengthens the hand of school boards in dealing with inflexible unions.

In a late night session last December, the Legislature cobbled together a series of educational reforms intended to make the state’s public schools more attractive competitors for federal grants in the "Race to the Top" program. One of the changes, proposed at the last minute, was a change to a 1994 state law that established that school districts would have the authority to subcontract non-instructional services such as bussing, food service, and janitorial work over and above any union objections. The 1994 law made subcontracting these tasks a prohibited subject of collective bargaining.

The bargaining law change agreed to as part of "Race to the Top" had a simple goal – that current employees have a chance to keep their jobs by submitting a competitive bid – but in the last minute rush, the amendment was poorly drafted. MEA bargainers claimed that the Legislature had made contracting out a proper subject of bargaining again, meaning that districts would need to bargain collectively before proceeding with the bidding process. School districts argued that the Legislature’s intent was more narrow, and that bargaining over privatization would be limited to situations in which employees were prevented from bidding.

After hearing oral arguments and closely questioning union attorneys, Peltz issued a ruling from the bench that adopted the more narrow interpretation of the change to bargaining law. In accordance with that ruling, Peltz is expected to recommend to the state labor board that it dismiss union charges against two school districts that proceeded with privatizing without bargaining over the bidding process with the unions. A written decision, which should lay out Peltz’s interpretation of the law in more detail, should come down in the next couple of weeks.

According to the most recent school privatization survey, nearly half of school districts in the state have privatized bussing, food, or janitorial services, producing substantial savings for taxpayers and freeing up funds for core educational programs. Depending on the district and the service that is privatized, savings from contracting out can range into millions of dollars, or hundreds of dollars on a per-pupil basis.

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