When students in Grand Rapids, Michigan boarded their school buses for the start of this school year, they probably did not know it was the first of many rides that would save the school system an estimated $18 million over the next five years.
The district had projected an $18 million budget deficit for the end of this year, which prompted the school board and superintendent to look for ways to steer Grand Rapids Public Schools (GRPS) off the path to insolvency.
In March, plans for privatization of various district services were introduced to stave off reductions in classroom-oriented expenses. School Board President David Allen said Superintendent Bert Bleke was “looking at cuts and changes that ran ‘from very radical to minor,'” according to the Grand Rapids Press.
In order to spare instructional services from the cuts, the board agreed privatization measures would have to be considered, especially in light of a projected 800-student drop in enrollment next school year.
Union Opposed Plan
The Michigan Education Association (MEA) opposed the privatization plan, claiming it would put students’ safety at risk and that the legislature has been underfunding the Grand Rapids district.
Grand Rapids Educational Support Professionals Association President Steve Spica, whose union is affiliated with the MEA and represents bus drivers and custodians, told the Press, “I’d rather see them run the district until we run out of money and then close the doors. That would send a message to the state.”
The Press reported that in response to sentiments like Spica’s, Ari Adler of Sen. Ken Sikkemma’s (R-Wyoming) office announced any such “stunts” would not force structural change to Michigan’s school funding system, and that school districts should be encouraged to make responsible budget decisions when finances become tight.
Proposal Passed Narrowly
In April, the school board voted 5-4 to pass a privatization measure.
Preliminary budget plans had included eliminating 200 district jobs and privatizing 400 others, including custodians, central office staff, and teacher aides, with school closings phased in over the next few years. Bleke maintained that even employees who would be able to keep their jobs would likely be required to cut back in other areas, some having to pay portions of their health insurance or forgo scheduled pay raises.
The MEA expressed displeasure over the possibility of privatization efforts taking root in Grand Rapids. The district is the largest in the state for the MEA, according to an April 14 Grand Rapids Press news story. MEA Communications Director Margaret Trimer-Hartley told the newspaper the privatization issue was “critical,” and said, “If a large and high-profile district like Grand Rapids privatizes, it could hurt members all over.”
Before the scheduled board vote, union members were given the opportunity to create their own package of concessions to offer as an alternative to privatization plans. Allen expressed a willingness to review the concession package, but only if it came close to saving the district $5 million, the Press reported.
Press research revealed union employees received full dental, vision, and health coverage through a union provider if they worked more than 16 hours a week. Their most recent contract included 10 to 20 paid vacation days, seven to 10 paid holidays, three personal days, and 10 sick days.
Drivers Offered Concessions
In April, the bus drivers offered concessions that included giving up vacation time, pay raises, and health insurance for their families, totaling $1.9 million in savings for the district. However, those savings were offered only for the remainder of the current year’s contract. The board said contracting with privately run Dean Transportation would mean long-term, substantial savings of $18 million and would free the district from paying rapidly escalating employee retirement expenses.
After the board vote, 225 GRPS bus drivers and mechanics learned their jobs will be outsourced to Dean next year. The transportation company says 140 district drivers, who will be able to join a union representing Dean drivers, have since applied with the company.
A concession plan that included wage freezes, health insurance contributions, less vacation and sick time, and modifications to job descriptions was offered by custodians and accepted by the school board. The district could not provide exact savings figures for the concession plan, but according to an MEA representative, projected savings total several million dollars.
Governor Speaks Against Plan
Michigan Gov. Jennifer Granholm (D), giving a speech at Grand Rapids’ Creston High School days after the board vote took place, declared, “Privatizing employees is not the way schools should be saving money,” according to the Muskegon Chronicle, saying she thought the state has “done better bringing work inside instead of contracting it out.” The report also indicated Bleke was not surprised by the comments, and asked if Granholm could generate a better solution.
Bleke, who will retire in June 2006, told the Press he is optimistic about the future of the district now that one major budget hurdle has been cleared. “I honestly think this is the best finish to the school year we’ve had in a long time,” he said.
Grand Rapids’ WOOD-TV reported that the lowest hourly wage for a GRPS bus driver was $14.38. Dean Transportation pays drivers $11.24 an hour.
According to Standard & Poor’s, over the past five years Grand Rapids Public Schools have lost 2,650 students. The district was spending as much as $10,634 per pupil, and only 47 percent of that sum was actually going “into the classroom.”
An earlier version of this article appeared August 16 in Michigan Education Report (Summer 2005 issue), published by the Mackinac Center for Public Policy. The full report may be viewed at http://www.educationreport.org/pubs/mer/cover.asp?ID=7232.
