Outsourcing Could Save $$ for Alabama Schools

Published May 1, 1998

According to a recent study of Alabama schools, outsourcing noninstructional services provides an excellent opportunity to use existing revenue sources to increase funds for teaching. Other benefits provided by outsourcing include significant cost savings, access to service provider experience, and contracts based on performance.

Although Alabama’s 1995 per-pupil spending was the fifth lowest in the country, the state’s real per-pupil expenditures nearly doubled between the 1969-70 school year and 1994-95, going from $2,098 to $4,137. Voter reluctance to further school tax increases is pressuring administrators to find ways to stretch education dollars further. Outsourcing noninstructional expenditures provides a viable means to achieve this, argues Alabama Family Institute policy analyst Patrick S. Poole.

In “Dollars and ‘Sense’: How Outsourcing Can Save Money for Alabama’s Schools,” Poole provides examples of how school officials in Alabama and other states have successfully privatized such services as transportation, janitorial services, school maintenance, and food services. The Decatur City Schools, for example, eliminated a $450,000 annual deficit in five of their nine food service operations by using a private food service contractor for the 1996-97 school year.

Capital savings can be significant, too. After a 1989 tornado, Huntsville City Schools required its contractor to replace eight storm-damaged buses, rather than using tax dollars. And the Tuscaloosa City Schools saved $2.5 million by requiring its contractor to replace 57 buses over a two year period at no additional cost to the district–savings in addition to the estimated $200,000 a year savings on operations from outsourcing school transportation.

“The money that we have saved has been returned to the instructional programs,” noted Tom Dodd, Tuscaloosa’s Assistant Superintendent for Business Operations.

Employee and customer satisfaction are important, also. In the Decatur food service case, all existing food service workers were allowed to remain as employees of the school district.

“The level of customer service achieved with our contractor is far superior than what we could ever provide to ourselves,” said Huntsville Schools’ Safety Director Kyle Koski.

Not everyone is as pleased with the state’s outsourcing efforts. In a move that has been labeled “a strategic assault on outsourcing,” the Alabama Education Association has filed suit to bar the state’s public schools from contracting with private companies, not only for transportation and food services, but also for independent contractor teachers, architects, accountants, plumbers, and others. (See “Alabama Union seeks to Ban Service Outsourcing,” School Reform News, May 1997.)

George A. Clowes is managing editor of School Reform News. His email address is [email protected].