Executive Summary
Illinois has 871 school districts. Each one is supposed to efficiently provide a high-quality education to all students who enroll in its schools. It is no secret that many districts have struggled with providing a high-quality education. Others have struggled to do so efficiently.
A number of reforms exist to help school districts meet their common goal of providing a first-rate education in a fiscally responsible manner. Among those reforms is the privatization of major non-instructional services such as cafeteria services, janitorial services and daily transportation services. School service privatization can enable a district to improve the quality and efficiency of its schools by allowing districts to:
– focus intently on its “core competencies” of educating students;
– improve the quality of its support services; and/or
– save money on school services, money which can instead be steered to the classroom or returned to taxpayers in the form of lower property taxes.
This study estimates that a majority of Illinois school districts have “privatized” one of three major non-instructional services at one or more of their schools.
– 56 percent of Illinois school districts currently use private contractors to provide cafeteria services, janitorial services or daily busing services.
– Daily busing service is by far the most popular service to be privatized, with an estimated 43 percent of districts using private busing companies to transport students.
– 29 percent of school districts use private foodservice providers to prepare and/or serve meals at their schools.
– 13 percent of school districts use private contractors to fulfill all or part of their janitorial needs.
– Overall, 78.2 percent of Illinois public school students attend school in a district that has privatized all or part of its busing, transportation and/cafeteria services.
Unfortunately, despite the potential benefits of privatization, and despite the fact that the practice is widespread throughout Illinois’ locally governed school districts, state lawmakers in 2007 created a number of mandates that threaten to end, and perhaps reverse, the trend towards privatization in Illinois’ schools. State law now places a number of restrictions on when school districts can enter into a private contract for support services and forces school districts to offer prevailing wages and benefits to personnel employed by private contractors who provide those services.
Many experts in service privatization and school management have predicted that these new mandates will bring the growth in school service privatization to a halt. Less than a year after the new mandates have taken effect, many lawmakers have apparently realized that these mandates harm the pursuit of high-quality schooling and good governance at the district level. So, state lawmakers are now considering a resolution that would “clarify” (i.e. “revise”) the intent of the legislation. House Joint Resolution 78 suggests that the new regulation “does not apply to situations where a board of education contracts only for management or professional expertise and the employees remain school district employees.”[1] It’s good that the General Assembly has seen an error in its ways, and that elected officials are seeking to weaken the impact of bad laws. However, many more steps need to be taken to undo the harm of unnecessary, costly, anti-privatization laws.
The Illinois Policy Institute supports any attempt to free districts from unnecessary regulation – especially regulations as onerous as those created in 2007. A resolution designed to weaken onerous regulations is a small step in the right direction; however, the only true solution is the repeal of anti-privatization mandates that prevent districts from becoming more effective, more accountable and more efficient.
The privatization of school support services has allowed school districts a voluntary means of becoming more efficient. It has also allowed them to focus on becoming more effective, both within and outside of the classroom. Our research shows that a majority of school districts have opted in favor of school service privatization to some degree. State law should be changed to reflect those priorities.
Survey Methodology
In Illinois the names of private firms who contract with governmental entities are public record, as are other records of any contractual agreements between school districts and service providers. Thus, in order to ascertain the number of school districts who use private contractors for busing, janitorial or cafeteria services, the Illinois Policy Institute filed a Freedom of Information Act request with every school district in Illinois. The following information was requested:
1. The names of any and all private providers contracted by the district to provide cafeteria service (i.e., daily meal service) within one or more of the district’s schools. If the district entered into no such agreement and provided said services itself, the Institute asked that the district indicate so in writing.
2. The names of any and all private providers contracted by the district to provide custodial services within one or more of the district’s schools. If the district entered into no such agreement and provided said services itself, the Institute asked that the district indicate so in writing.
3. The names of any and all private providers contracted by the district to provide transportation (i.e., busing) services to one or more of the district’s schools. If the district entered into no such agreement and provided said services itself, the Institute asked that the district indicate so in writing.
Districts who responded with the name of a contractor for a given service were determined to have “privatized” that service. Districts who responded that no contractor existed and that they provided a given service themselves were determined to have not privatized that service. Of the 872 school districts surveyed, 730 responded to the Institute’s requests by phone, e-mail or regular post.
Of the 730 districts that responded to the Freedom of Information Act requests, 215 districts use a private contractor for foodservice at one or more of their schools, 97 districts use a private contractor for custodial services at one or more of their schools, and 314 districts use a private contractor for regular busing services to and from one or more of their schools. Overall, 411 districts responded as having used a private contractor to provide at least one of the aforementioned services during the 2007-2008 school year.
There is little reason to think that a response bias existed in our survey. The Illinois Policy Institute chose to use the Freedom of Information Act (FOIA) as a vessel for the survey for a specific reason. A typical survey is voluntary and may contain a response bias: districts that do not use private contractors may be less inclined to respond to a survey seeking information about service privatization, as they have no information to report. However, since the Institute chose to use FOIA, no such bias exists – public bodies are required to respond to all requests, whether or not they have responsive documents.
So, whereas it is troubling that 16.2 percent of Illinois school districts chose to ignore their statutory responsibilities to respond to our requests, and whereas the Illinois Policy Institute plans to gain a 100 percent response rate in due time, there is no reason to believe that districts which did not respond to our open records requests were more or less likely than responsive districts to have privatized non-instructional services. One can be confident that the figures below are representative of responsive and non-responsive districts alike.
Busing Service
The most popular major support service to be privatized by Illinois school districts is daily busing service. According to our estimates, 43 percent of Illinois school districts use a private contractor to provide all or part of their transportation needs to and from at least one of their schools. Outside of Chicago, an estimated 50 percent of public school students attend school in a district that has contracted out regular transportation services.
The character of these arrangements varies between districts. The overwhelming majority of districts who have privatized their busing service of non-special-education students rely on third-party contractors to maintain a private busing fleet and to hire private personnel to operate the vehicles. However, some districts have contracted only for the maintenance of the private bus fleet and have provided district personnel as bus drivers.
The nature of the private busing contractors varies as well. Many small town school districts who responded to our survey use local providers to provide its daily busing services. Many other districts such as Springfield Public School District 186 use nationally known transportation providers such as First Student, formerly known as Laidlaw. It is clear that a wide variety of service providers are willing to meet a wide variety of district contractual demands.
Furthermore, the figures above do not capture the extent to which private providers have become active partners in the transportation services for students with special needs. Many districts in Illinois, while providing daily busing services for most of their students, have contracted with private providers to transport students with special needs to and from school. This practice was not requested in our survey because of the varied nature of special education transportation. Some smaller districts have such a small number of students with special needs that the “privatization” of special needs transportation can consist of hiring a taxi service to transport a student to and from school in a handicap-accessible vehicle; at other times, districts pay private contractors to transport special needs students to schools out-of-district that better meet these needs. Whereas the widespread use of private contractors is instructive as to how the private sector is adept at quickly and efficiently meeting unforeseen challenges – such as the unique needs of students with disabilities – the reasons for utilizing private providers for special education services are too varied to be seen as part of the larger widespread trend towards the privatization of major school support services.
Another factor which likely causes us to understate the role played by private providers in school support services is the fact that many school districts do not provide daily transportation service to their students. Some districts are single-school districts whose students all live within walking distance of the school. Other districts have outsourced their busing needs to neighboring (or overlapping) school districts, or have partnered with municipal transportation services to meet their transportation needs. Being as this study focuses on the use of the private sector to provide services to public schools, and being as that many state mandates do not apply to public bodies contracted to provide school support services, the provision of school services by public bodies to public school districts was counted as a service privatized.
Altogether, school districts across Illinois are using privatization and intergovernmental agreements to create economies of scale for the ever-growing expense of transporting students to and from school. It is likely that, absent legislative interference, districts would prefer to continue this practice, given the unpredictability of fuel costs and other factors.
Foodservice
The use of private foodservice providers is widespread in Illinois and across the country. According to our estimates, 29.4 percent of Illinois school districts have contracted for daily foodservice. Nearly all of the 407,000 students enrolled in Chicago Public Schools attend schools with cafeterias managed by a single private provider, Chartwell’s Dining Services. Including Chicago, an estimated 57 percent of the state’s schoolchildren attend school in a district that has privatized all or part of its daily foodservice. Excluding Chicago, that number is 44.3 percent. In districts outside of Chicago which have contracted for foodservice operations, the average enrollment is 2,872 students. In districts that provide said services themselves, the average enrollment is 1,496 students.
Nationwide, the practice of foodservice privatization has proven to be popular. Michael LaFaive of the Mackinac Center for Public Policy surveyed every state department of education in early 2007, and concluded that “nationwide, approximately 13.2 percent of conventional public school districts participating in the National School Lunch Program contract for food services.”[2] LaFaive estimated that 18.3 percent of Illinois school districts used private providers. As stated, our estimates suggest a higher rate of foodservice privatization in Illinois schools: 29.4 percent of districts responding to our FOIA requests reported using a private contractor in one or more their schools.
The reasons for the disparities between the estimates of the Mackinac Center and those of the Illinois Policy Institute is likely due to the fact that the Illinois State Board of Education (upon whom LaFaive relied for his data) uses a methodology that underestimates the rate at which private contractors are used to provide all or part of the daily meal service in public school cafeterias. If the same is true in other states – that is, if other statewide departments of public instruction use data that underestimate the true rate of service privatization in public schools – then LaFaive’s significant findings in all likelihood serve as a bottom-line estimate for the popularity of privatization in government-run schools.
In Illinois, as with busing service, the Illinois Policy Institute found a wide array of contractual agreements for foodservice between school districts and private contractors. Some school districts contracted private providers to prepare meals on a school-by-school basis, with multiple contractors operating within the district or with the district providing foodservice at some schools and contracting out at others. In many districts, foodservice contractors were hired only to prepare the meals offsite and then deliver them to the school, after which point district employees served the meals to students. Other districts hired foodservice providers to operate and maintain kitchen facilities within the schools, with private personnel serving the food as well.
Unlike busing service, the names of national providers were much more prominent among foodservice contractors. Chartwell’s Dining Service, Sodexo Foodservice and Aramark are three of the nation’s largest operators of commercial kitchens. Each serves meals to tens of thousands of public school students in Illinois every day. In Chicago alone, nearly 400,000 Chicago Public Schools students eat lunch in cafeterias managed by Chartwell’s, the nation’s largest commercial kitchen management contractor.
Foodservice, as is commonly known, is a business with the narrowest of profit margins. It relies heavily on economies of scale to provide affordable ingredients, efficient equipment and talented personnel. These factors, combined with the fact that school lunch programs are heavily regulated by the federal government, force a number of costs on firms who seek to operate commercial kitchens, whether those firms are school districts or private providers. A great deal of time can be spent on the part of school district officials when it comes to overseeing large cafeteria operations. The management of a commercial kitchen often requires the attention of personnel with years of experience in the dining industry, and finding proper on-site management personnel often requires the attention of someone else with years of experience in the dining industry.
The maintenance of a bus fleet and the cleaning of a school are undoubtedly complicated tasks. But the trials of operating large-scale dining operations are perhaps the best evidence of how schools can privatize those operations merely to focus better on their core mission – educating students. Regardless of the motivation to privatize, be it to save money or improve food quality, it is clear that the practice is very popular, with nearly 30 percent of Illinois school districts having formed private sector partnerships to assist in their daily foodservice needs.
Janitorial Service
The Illinois Policy Institute estimates that 13.2 percent of Illinois school districts have privatized all or part of their regular custodial services. An estimated 22.8 percent of students outside of Chicago attend school in a district which has privatized all or part of its custodial services.
Janitorial services are currently the least likely of major school support services to be privatized in Illinois schools. This owes to a number of factors. School janitors are more likely to belong to a local service employee union, which possesses the political clout to fight privatization. Also, a number of Illinois school districts are single-school districts, often employing relatively few janitors. Thus, the cost savings are too insignificant for many small school districts to pursue the privatization of custodial services, and the profit margins are too slim for many private firms to bid to provide for those services – though one small district did report contracting with a one-woman cleaning service to provide part-time janitorial services at the district’s lone school.
Due to the factors listed above, larger districts are much more likely than small districts to form private partnerships to help meet their custodial needs. The average enrollment of an Illinois school district that has privatized its custodial services is an estimated 3,303 students, whereas the average enrollment of a school district that performs custodial services itself is 1,687 students.
The nature of the private contracts for custodial services in Illinois, as with busing and foodservice, varied greatly. Firms as large as Sodexo and Aramark were hired to provide custodial services in some districts. And, whereas larger districts have a decided advantage over smaller school districts in privatizing custodial services, one small district reported to contracting with a one-woman cleaning service to help them meet their janitorial needs.
Costly New Regulations
Until 2007, school districts in Illinois were able to pursue non-instructional service privatization free from onerous red tape. That changed on August 17, 2007, when Governor Rod Blagojevich approved House Bill 1347 (now Public Act 95-0241). State law now imposes a series of regulations that make future privatization of school support services extremely difficult, if not impossible.
School districts that are privatizing a given non-instructional service for the first time cannot begin a contract with a private provider until after their active collective bargaining contract has expired – whether or not the school district collectively bargained with an organization to provide those services in the first place. This forces school districts to wait months, if not years, to privatize a service that could be better provided and administered by a private party.
Furthermore, due to an ambiguity in the language of the statute, state law can now be construed as never allowing school districts to privatize support services except during times in which collective bargaining agreements have completely lapsed.
Further restricting the ability of school districts to quickly privatize school support services – should they wish to do so – is a new mandate that private contracts must take effect at the beginning of a fiscal year. This is an unabashedly arbitrary restriction and could exist only to serve as an impediment to privatization. It is unconceivable how any school district in the state will benefit from this requirement.
Perhaps the most devastating blow to the further growth of school service privatization is a series of wage and hiring mandates that state law now places on private providers. State law now requires that private school service contractors provide wages and benefits comparable to those provided to district employees who performed similar tasks prior to privatization. Being as that labor costs are one of the primary areas in which private contractors are clearly more efficient than many school districts, this requirement in effect requires the private contractor to absorb the current inefficiencies of school districts. Thus many of the cost savings once available through school service privatization have been eliminated.
Furthermore, if an open position with a private contractor is similar to the position once held by a given school district employee, private contractors are now required to offer employment to that former district employee. Suffice it to say, both local contractors and nationwide corporations will be reluctant to accept this final condition – if they can find a way to profit under the conditions listed above, which is unlikely.
When House Bill 1347 was being considered by the General Assembly, an alliance of school business officials, school boards, and principals predicted that the legislation “would likely end the practice of a school district contracting for services such as transportation, food service, and janitorial services.”[3] This is likely true. However, another effect of the new regulations is that schools who have privatized their services already will likely never elect to again provide support services themselves – regardless of whether they will realize cost savings in the long run and regardless of whether they are unhappy with the current array of private providers. The new regulations will prevent them from “re-privatizing,” if a new provider comes along who can best meet the district’s needs. Thus, it is probable that many districts will elect to remain in contractual agreements that they would otherwise abandon, for fear of never again being able to contract out those services in future years to a different private provider.
This is clearly a toxic regulatory environment. While the ink is still fresh on the new regulations, lawmakers should eliminate anti-privatization mandates, as well as any other restrictions that interfere with schools districts’ attempts to more effectively and efficiently provide clean schools, safe transport and nutritious food to their students.
Bottom Line
Throughout the nation, autonomy and accountability are being recognized as inseparable elements in school reform. In Illinois, if our schools are to be effective and efficient (i.e. accountable), school districts must have the freedom – or, autonomy – to effectively and efficiently manage their schools. Under their own free will, a majority of Illinois school districts have chosen to privatize their cafeteria services, their busing services, or their custodial services. Nearly 80 percent of public school students currently attend school in districts that have privatized at least one major school support service. This would not have been the case had privatization not offered a significant benefit to school districts. And this would not have been the case had Illinois’ current, toxic regulatory environment always existed.
The Illinois General Assembly is now considering House Joint Resolution 78, which would soften a few of the ill effects of new state mandates by revising the legislative intent of Public Act 95-0241, which has placed an enormously expensive regulatory burden on school districts. It is good to see many members of the General Assembly awakening to the impact of onerous regulations. However, the solution to current regulatory woes is not a mere resolution, but the repeal of Public Act 95-0241 and any other impediments to school support service privatization.
School service privatization offers districts an option to better meet the needs of parents, teachers, students and taxpayers. Regulations which eliminate the option to privatize do not reflect those priorities. It’s time for lawmakers to eliminate unnecessary red-tape and allow schools the freedom they need in order to become better at their core mission: effectively and efficiently educating Illinois’ children.