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Successful privatization—the transfer of responsibility for government-owned or managed assets or services to more efficient, cost-saving private firms—can run into many pitfalls, not the least of which is politics.
The latest example of this pitfall came in June, when officials with Warren Consolidated Schools in Macomb County announced that their district would no longer do business with any private service providers who financially support a group called Kids First! Yes!
Kids First! Yes! is promoting an initiative approved for the November ballot that would allow families in qualifying districts to use roughly $3,100 in tax-funded vouchers to send their children to K-12 private schools.
Many public school officials disagree with proponents of vouchers and other reforms aimed at offering parents more educational choices, believing that the result of such reforms will be students leaving public schools. But why is Kids First! Yes! a factor in determining which firms should provide services to Warren students?
The Warren district currently contracts with private companies to provide scores of services, including garbage pickup, architect services, legal services, landscaping, grass cutting, and copier maintenance. Presumably, the district selected particular companies because of their ability to deliver quality services at lower costs. If those companies supported Kids First! Yes!, would Warren hire other firms to replace them, even if the new firms provided worse service or charged more?
Warren's policy, if adopted as a model for districts, could pose a threat to beneficial privatization efforts in Michigan schools. Contractors who could help schools provide better services and direct more resources to the classroom would be suddenly forced to choose between public service and their political opinions.
Companies' support for, or opposition to, ballot initiatives is not an indicator of whether or not those companies can provide quality services efficiently. Districts that limit the pool of potential bidders for contracts according to strictly political criteria could wind up paying more for services rendered. It is vigorous competition—not political belief—that increases quality and lowers prices. As the pool of bidders is narrowed by political decisions instead of market forces, competition is lessened and vendors may find a greater opportunity to raise prices.
Nevertheless, John Green, president of the Warren school board, encouraged his colleagues in other districts to review their contractors' stances on the voucher ballot initiative. Brian Whiston, a legislative affairs director for Oakland County Intermediate Schools, also defended the Warren policy.
"Why should we do business with people who are trying to put us out of business?" he asked.
Matthew Brouillette, director of education policy with the Mackinac Center for Public Policy, says Whiston and other officials are missing the point. He described Warren's position as a "political litmus test that could hurt kids and their parents."
"School districts have no right to use their powers as government entities to influence or affect the outcome of reform measures the taxpayers may deem necessary and right," Brouillette said, noting that nearly 460,000 Michigan citizens signed the petition to put the voucher proposal on the November ballot.
In July, the Michigan Secretary of State's office agreed when it cited two individual school districts and one intermediate school district (ISD) for violating state electioneering laws. The districts were Grand Haven, Flint's Kearsley schools, and the Oakland ISD. The Secretary of State is reviewing electioneering complaints filed by Kids First! Yes! against officials in 10 other school districts, according to the Detroit Free Press.
School officials considering privatization should remember their primary duty to students and taxpayers is to find vendors who can provide the best service at the lowest possible cost. By utilizing its position as a governmental authority, the Warren school board instead illegally misused taxpayer resources to intimidate private contractors and limit potentially beneficial privatization options based on purely political reasons.
Strong competition among vendors is key to public schools' ability to reap the greatest benefits from privatization—better services, lower costs, and more resources freed to improve education for students. Reducing competition by putting politics before privatization is a sure way to hamper these benefits.
Michael LaFaive is managing editor of Michigan Privatization Report.
