Local Michigan School Board Gets on the Privatization Bus

Published May 17, 2017

The Cedar Springs, Michigan School Board approved in May a contract with a private business to provide transportation services, reducing annual spending by $350,000 to $400,000 per year, in addition to $610,000 in one-time revenue resulting from the sale of the buses to the company.

Starting in August, Dean Transportation, a Lansing-based company, will operate the western Michigan school district’s bussing services. The company will hire the district’s 28 bus drivers and will be responsible for maintaining the buses.

Focusing on Education

Michael LaFaive, director of the Morey Fiscal Policy Initiative at the Mackinac Center for Public Policy, says the school board’s decision to get out of the transportation business is a sound idea.

“The mission of public schools is to educate children, not to run a transportation company, a food company, or a cleaning company,” LaFaive said. “These ancillary services are best performed by those whose specialty is in those fields. As a bonus, there is often substantial savings for those who do it, and do it correctly.”

LaFaive says many Michigan government schools already partner with private businesses in some manner.

“More than 70 percent of Michigan public school districts contract out for at least one of the three major non-instructional services—custodial, food, and transportation—and in 2016, 25 percent contracted out for busing to some degree,” LaFaive said.

Transportation Tradition

LaFaive says privatized school transportation has a long track record of success.

“Part of the East Coast history of private contracting for busing is a function of how transportation for students evolved,” LaFaive said. “When it started in those states back in the 1800s, farm people contracted with a fellow farmer to take their kids to school. Since school-bus contracting has been done for decades and is done extensively in Michigan, I expect the service will be at least equal for students and parents.”

Profit Motives

Teresa Mull, a research fellow with The Heartland Institute’s Center for Education Transformation, says privatization of school services is a win-win situation for parents and governments. Budget & Tax News is published by The Heartland Institute.

“Private companies compete to win contract bids, so they are incentivized to provide the best, most cost-effective services, which benefits everyone,” Mull said. “If anything, outsourcing school transportation will allow more people to be involved in the district and community, and we have seen that when government has a monopoly and no one with whom to compete, the quality of service dramatically decreases.”

Mull says the Cedar Springs School Board should be commended for its reform.

“It’s definitely a positive change, when a public institution moves in the private direction in any sense,” Mull said “Taking away a government-imposed hurdle will allow the market to work more efficiently and for everyone to access the highest-quality, least-expensive goods and services.”