Reason Foundation - Authors > Janet R. Beales

Using Contractors to Cook, Clean, and Drive the Bus

info@reason.org (Janet R. Beales) — Sun, 01 Dec 1996 00:00:00 EST

Introduction

From coast to coast, schools are using the powerful tool of competitive contracting to bring excellence and efficiency to every part of the education environment. A 1996 survey by the National School Boards Association found that 62 percent of school board members surveyed said they have considered contracting for school services.

To help school officials better take advantage of this emerging opportunity, the Reason Foundation hosted a conference in November 1995. Making Schools Work: Competitive Contracting for School Service attracted 140 participants from 19 states to Santa Barbara, California for the event. Edited transcripts from some of the most inspirational and informative presenters are printed on the following pages.

The Making Schools Work conference provided a forum for education officials to share their experience in contracting for services with their colleagues from other districts and other states. Beyond discussing the successes of competitive contracting, the Makings Schools Work co4erence also took on such nitty-gritty implementation issues as dealing with current employees, costing in-house services, and designing a dependable bidding system. A set of audiotapes of the complete conference are available from the Reason Foundation.

By taking advantage of the competitive efficiencies offered by private providers of services, schools have cut costs and eliminated wasteful spending. And by introducing accountability and expertise into school operations, the private sector has helped improve the quality of instructional and other programs for students.

-Janet R. Beales
Education Stuthes Program Director

The Education Innovators

info@reason.org (Janet R. Beales) — Sun, 01 Dec 1996 00:00:00 EST

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Meeting the Challenge

info@reason.org (Janet R. Beales) — Thu, 01 Aug 1996 00:00:00 EDT

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Total Costing for School Transportation Service

info@reason.org (Janet R. Beales) — Fri, 01 Dec 1995 00:00:00 EST

Executive Summary

Tight budgets are prompting many public agencies to consider competitive contracting for support services. To make an informed decision about competitive contracting, public officials must first identify the total cost of in-house service.

Public agencies routinely underestimate their true costs by as much as 30 percent. Common mistakes in estimating total costs include: cross-subsidizing, failing to allocate overhead, improperly depreciating capital assets, ignoring cost of capital, and excluding or underestimating costs such as pension plans, legal fees, insurance, and administration.

The San Diego City Schools encountered many of these public-costing problems. In December 1994, the district's Board of Education voted to discontinue competitive contracting for busing and expand its in-house transportation department believing the new arrangement would save money.

Its decision, however, was based on a flawed financial analysis prepared by the district's in-house transportation department. The district's analysis of expansion costs ignored key cost categories, ranging from property acquisition to office supplies. Moreover, instead of looking at total cost, the analysis only considered the marginal cost of expanding in-house services. By doing so, the analysis sidestepped the more important consideration of overall cost efficiency.

A thorough analysis of the district's costs is beyond the scope of this policy paper, but a preliminary review of state and district-expenditure data show that private contract carriers currently operate pupiltransportation services at a lower total cost than the district's in-house transportation provider in San Diego.

Expressed in terms of spending per bus, the cost of operating district-owned buses is 83 percent higher than the cost of operating contractor buses. In several areas, the district incurs higher costs. These include labor costs, utilization of resources, and fleet acquisition and owning costs.

By eliminating competitive contract service, the school board has placed itself in a weaker bargaining position with respect to its employee-labor union because it no longer has alternative providers. Under these conditions, the transportation services department will have little incentive to control costs.

Although cost savings should not be the only consideration in the decision of how to provide services, it was the key argument advanced by the district's transportation department in favor of expanding its own operations. This study is devoted to the subject of public-sector costing.

Given the Choice

info@reason.org (Janet R. Beales) info@reason.org (Richard W. Wahl) — Sun, 01 Jan 1995 00:00:00 EST

Executive Summary

In response to declining student performance in the Milwaukee Public Schools (MPS), the Wisconsin state legislature and the private sector each created programs to give school choice to low-income students.

In 1990–91 the Wisconsin state legislature implemented the Milwaukee Parental Choice Program (MPCP). Roughly 750 students received government-funded tuition vouchers in 1993–94 to attend any one of a dozen non-religious private schools in Milwaukee.

In 1992, business and religious organizations joined to establish Partners Advancing Values in Education (PAVE), a privately funded school-choice program for low-income students. Unlike the MPCP, PAVE's tuition scholarships may be used at any private school in Milwaukee, including religious schools. PAVE served roughly 2,370 students enrolled in 102 different private schools during the 1993–94 school year.

Key findings from parent surveys and student-academic records about the PAVE program include the following:

PAVE students outperform both MPCP and MPS students on standardized tests of academic achievement.
PAVE students who had previously been enrolled in private schools and PAVE students who had previously been enrolled in public schools were nearly identical in terms of demographic characteristics. However, PAVE students who had come from private schools performed significantly better on standardized tests, suggesting that school environment (i.e. public or private) directly influences student performance.
Parents indicated the most important reason for choosing a school was educational quality, followed by discipline and general atmosphere. Ninety-six percent of PAVE parents were satisfied with the amount their child learned in school.
Most PAVE families, or 57 percent, are headed by a single parent. Roughly half the parents of PAVE students are White. Over a third are African-American; one-sixth are Hispanic. The average age of PAVE parents is 35, with a range of 20 to 79 years of age.
While most PAVE elementary-school students (60 percent) attend Catholic parochial schools, the PAVE program extends the greatest support, as a proportion of student enrollment, to Muslim, Jewish, and non-Catholic Christian schools where 49 percent, 29 percent, and 29 percent of students respectively use PAVE scholarships. By contrast, 13 percent of Catholicschool students use PAVE scholarships.

PAVE has dispelled the myth that poor parents don't care about their children's education.

—Mother of PAVE scholarship recipient

Teacher, Inc.

info@reason.org (Janet R. Beales) — Sat, 01 Oct 1994 00:00:00 EDT

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Doing More with Less

info@reason.org (Janet R. Beales) — Thu, 01 Sep 1994 00:00:00 EDT

Introduction

School spending per-pupil increased 34 percent during the 1980s after adjustment for inflation. Why, then, must many teachers spend their own money to provide their classrooms with the most basic supplies such as books, paper, and chalk?

The student-to-staff ratio has declined since 1970 from 13 students for every staff person (including non-teachers) to roughly nine to one in 1992. Yet a common complaint by parents is that their children don't receive enough individualized attention in public schools.

Paradoxes like these abound in public education. Despite decades of spending increases, the perception exists that when it comes to public education, we scrimp on our schools. To a certain extent, the perception is valid. After all, just 58 cents of every education dollar actually make it to the classroom, leaving local educators with far fewer resources than they might have otherwise.

But what hobbles our schools is not a lack of money, but a lack of money management. When resources are used inefficiently, when state and federal mandates hamstring local education budgets, or when onerous collective-bargaining agreements squeeze school finances, even a generous amount of funding evaporates by the time it reaches the classroom. (See sidebar on Page 2.)

The key question is not "how much" money is spent, but "how well" that money is spent. Across the country, school administrators are asking themselves that very question as they look for new ways to channel more dollars into the classroom. In the area of support services, administrators are finding some budgetary relief by turning to the efficiencies of the private sector for help. By contracting with private companies for busing, maintenance, and food service, schools can do more with less. Reducing costs, increasing revenues, and tapping new reserves of capital investment and expertise, can help school administrators focus on their core responsibility: educating children.

Non-instructional and support activities make up a sizeable portion of public-school budgets. Consider:

Only about half of all public-school employees are teachers. Out of 4.6 million school staff employed in 1991 by the nation's public schools, just 2.4 million were teachers.
Between 1960 and 1984, the number of nonclassroom instructional personnel in America's public-school classrooms grew by 400 percent, nearly seven times the rate of growth of classroom teachers.
Public schools operate with five times more noninstructional personnel per student than parochial schools.

School Voucher Programs in the United States

info@reason.org (Janet R. Beales) — Tue, 01 Feb 1994 00:00:00 EST

Executive Summary

Few reforms promise to do more to fundamentally alter the structure of public education in America than school choice. Yet proponents and opponents alike are at a loss to describe exactly how school choice would in fact operate. Privately funded voucher programs, operating on a small scale in twelve U.S. cities, offer working demonstrations of school choice.

Together, these programs provide tuition vouchers to over 5,000 low-income children enabling them to attend their school of choice, including religious schools. Typically, the programs grant vouchers valued at half the amount of tuition at the chosen school; vouchers are distributed on a first-come, first-served basis to children eligible for the federal free-lunch program.

Available parent surveys show that parents placed greatest importance on “educational quality” when selecting a school. This finding is in sharp contrast to the conclusions of the 1992 Carnegie Report on school choice which stated that parents selected schools for nonacademic reasons.

Parents who opted to participate in choice programs tended to have higher educational expectations for their children, were more educated, and had fewer children than comparable nonchoosing families. However, marital status and income levels of participating families were often similar between low-income families who used vouchers compared to those whose children remained in the public schools.

In Milwaukee, the privately funded Partners Advancing Values in Education (PAVE) program operates alongside the state-supported Milwaukee Parental Choice Program (MPCP). Although the MPCP pays full tuition, and PAVE only half, greater numbers of low-income parents have applied to the PAVE program than the MPCP. Regulations on the MPCP appear to have dampened demand for it; parents are restricted to choosing among 13 nonreligious private schools. In the PAVE program, children attend any one of 86 schools, including religious schools.

Unlike countless attempts to bring about school choice through legislative means, private-voucher programs are a proven service-delivery model that works. The work of private initiative, these voucher programs face few of the regulatory and political hurdles encountered by other school-choice proposals. Moreover, because the vouchers are funded privately, the private schools themselves avoid the risk of government interference that often accompanies government funding.

Following the defeat of a school-choice initiative in 1993 which would have provided state-support for tuition vouchers, Californians may wish to pursue a private-sector alternative. Where are the areas of greatest need? How would a decline in public-school enrollment affect California school finance? What steps should organizers of a private-voucher program take? The report addresses each of these questions, and recommends that state legislatures grant tax credits to organizations providing tuition vouchers, and reduce business regulations affecting private schools.

The following quotes are excerpts taken from letters written by parents whose children attend private schools with the assistance of a privately provided tuition voucher. Privately funded school-choice programs operate in twelve U.S. cities giving over 5,000 children choice in education.

If you were a business leader, and you were interested in sponsoring children for the CHOICE program, I would tell you that it would be to your advantage, because the children are the future. And, if they don't get the training that the private schools are offering, then there's not going to be any other children to take over.

—Debbie McClung, mother of Ashlee, Indianapolis.

This has been the most significant gift we could have ever received in our lifetime. It is most painful not to be able to provide my children with anything else as we rely so much on hand-me-downs and the support of money and food from family and friends. But you have provided them with a gift no one else can and a gift that will truly make their future. Your program is their lifeline.

—Joy Smith, mother of Allison (age 9), Jason (age 12) and Billy (age 14), Chamblee, Ga.

The program is a blessing for parents like myself who are single with more than one child...It is truly rare that quality and real care is offered to low-income families.

—Aminah Omari, mother of Ase (age 9), Ainkasha (age 7), and Akinyele (age 6), Atlanta, Ga.

We are ecstatic about the change in our son, his attitude toward school, the new friends he's made and the quality of his curriculum.

—Willie Thompson, mother of Eric (age 9) Decatur, Ga.

My granddaughter, Stephanie, is considered dyslexic and although she attended pre-kinder, kindergarten, and three years of public school, there was very little done to help her. Her school-work this year resembled work done by a first grader. She could not read or retain anything. A friend told us about The Learning Nook, a private school that works with children having learning problems. We enrolled her immediately and within three or four days, her attitude was completely changed. She looked forward to going to school. Her writing is neat and clear, she now enjoys doing her homework, and her alphabet letters are not backwards. I am very grateful to CEO for the two year tuition scholarship granted to Stephanie.

—Estela Fincke, grandmother of Stephanie (age 9) San Antonio, Tex.

I have three sons, they have attended three middle schools within a two month period. They were not safe at any of them. At Paige Middle School, the principal had to bring my sons home in the middle of the day, not because they were misbehaving, but because the gang members were harassing them in the classroom, outside, in the halls, even on the way home; they were not safe. Because of these problems that caused them to have low self-esteem, stress, and not wanting to go to school, their grades were beginning to look real bad. I spent a lot of time at school instead of working at my job.

But thank God for the CEO Foundation that came to my rescue... They would still be living in fear, if it wasn't for the choice that CEO program has given my family... We would like to say thank you very much to CEO Foundation for giving us a chance and a choice.

—Etta Wallace, mother of Bobby, Tony, and Terry, San Antonio, Tex.

Making Schools Work

info@reason.org (Janet R. Beales) info@reason.org (John O'Leary) — Mon, 01 Nov 1993 00:00:00 EST

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Special Education

info@reason.org (Janet R. Beales) — Thu, 01 Jul 1993 00:00:00 EDT

Executive Summary

To comply with the federal mandate now known as the Individuals with Disabilities Education Act, California implemented the Master Plan for Special Education in 1980. That legislation ushered in a new era of education rights for children with disabilities.

Although Congress and the California legislature created ample provisions to protect and serve children with disabilities, neither included a cost-control provision in the law to protect the schools. In fact, under the law, cost alone cannot be used as a defense for modifying or denying education and support services to a student with a disability. This has contributed to growth in special-education spending. In Los Angeles, for example, inflation-adjusted direct-instructional expenditures for special-education grew by 147 percent between 1980–81 and 1991–92. By contrast, spending for general education increased by 46 percent. After adjustments for enrollment growth, spending for direct instruction increased 47 percent per pupil in special education compared to an increase of 24 percent for nondisabled students in general education.

While special-education spending continues to grow, funding has not kept up, forcing school administrators to “encroach” upon general-education revenues to pay the costs of special education. Over a quarter of all special-education program expenditures in California, on average, are paid from a school district's general fund. In 1990–91, statewide encroachment was $577 million for special education, beyond the $167 million already contributed from local general funds as mandated by law.

Because most students with disabilities today spend the majority of the school-day in regular classrooms, the actual cost of educating a child with a disability is higher than the program costs alone would imply. Taking total costs into account, the average cost of educating a student with a disability in the Los Angeles Unified School District was approximately $11,500 during 1991–92. For nondisabled students, spending averaged $4,000 per pupil.

The above figures illustrate the need to reexamine special-education spending. Reductions in costs could come about by implementing a reasonableness standard to protect schools from excessive costs, neutralizing adverse financial incentives, and allowing more private-sector participation in special- education service delivery if costs can be lowered or service-quality improved. Greater efficiencies in service delivery could be realized by funding special education on a block-grant basis rather than using the current practice which ties funding to specific uses. In addition, relaxing some staffing requirements, such as the requirement that instructional aides be provided to 80 percent of resource specialists, would enable schools to staff according to local needs rather than state mandates.

Satellite Schools

info@reason.org (Janet R. Beales) — Fri, 01 Jan 1993 00:00:00 EST

Executive Summary

Between 1992 and the year 2000, enrollment in California's K–12 public schools is projected to grow by over 200,000 students on average each year—from 5.2 to 7.2 million students. To meet that demand, the state Department of Education estimates it will need $17 billion over the next five years for school construction and building modernization alone.

The private sector can help by providing school infrastructure in the form of satellite schools. Satellite schools—developed five years ago in Dade County, Florida—operate as public schools on business worksites. The host-business contributes land, building space, and some operating expenses. The school district supplies everything else—teachers, supplies, curriculum, and administration. Daycare services extend the school day to meet the needs of working parents.

Satellite schools in Dade County have saved the public millions of dollars in school infrastructure and transportation costs. Other benefits include increased academic performance and attendance among students, and increased interaction between parent, child and teacher. Business partners hosting satellite schools claim absenteeism and turnover have dropped among parents with children enrolled in the worksite schools. Satellite schools also provide career advancement opportunities for teachers which is one reason Dade County's 20,000 strong teachers' union endorses the idea.

In early 1993, California's first school of this type will open on the premises of the Hewlett-Packard Corporation in partnership with the Santa Rosa City School District. California's rigorous seismic safety standards, known as the Field Act, prevent satellite schools from occupying existing office buildings. Meanwhile, vacancy rates average 17 percent for office and commercial space in California's major cities where school overcrowding is often the worst.

Satellite schools offer a readily available solution to school overcrowding at minimal cost relative to other options. To facilitate their increase, the state should provide tax credits to businesses who sponsor satellite schools, streamline Title 24 building codes (the Field Act) with the Uniform Building Codes (UBC), and expedite approval of satellite schools at the state and local levels.

Survey of Education Vouchers and Their Budgetary Impact on California

info@reason.org (Janet R. Beales) — Sat, 01 Aug 1992 00:00:00 EDT

Executive Summary

A survey of Los Angeles Unified School District parents with children under the age of 16 currently enrolled in public schools shows that 52 percent of those surveyed would use a $2600 voucher to send their children to private school. Enthusiasm for the voucher was especially high among African-Americans. Over two-thirds of African-American parents with school-aged children said they would use the voucher. Overall, minorities, including Latinos and Asians, supported the idea of vouchers by nearly 58 percent.

A 52 percent use of vouchers statewide among all students now enrolled in public schools could reduce California's state education budget by $3 billion—a savings which could be reinvested in public schools or used for other general fund purposes. Calculation of such a reduction assumes current enrollment and current funding levels from the state's general fund and local property taxes with all savings accruing to the state.

Cost savings at the state level may not map the underlying cost structure of individual school districts. Because operating costs for public schools are composed of both fixed and variable costs, the number of students who leave the public schools must be great enough to reduce fixed costs before the voucher program becomes cost-effective for individual school districts.