The Detroit News weighs in on the plans to privatize school bus services in that city (emphasis mine):
The state-appointed emergency financial manager of the Detroit Public Schools will cut the cost by privatizing bus service and relying more heavily on city buses.
Even though privatization has been an ugly word in Detroit, this is a prudent move by Bobb and places the priority for education dollars where it should be: in the classroom. The move in part to contract out transportation to private companies will save about $50 million over five years, money that will help reduce a $300 million deficit.
About 345 bus drivers and other employees will lose their jobs with the district, but will have the right to apply for positions with the private firms.[...]
Detroit and every other school district in the state have to find savings wherever they can in the face of shrinking support from the state. Privatizing services such as transportation should always come before cutting into academic programs and laying off teachers.
There will be pushback, as there always is when union jobs are eliminated, but this is an important step toward establishing correct priorities for the Detroit school system.
Michigan actually has a fairly robust tradition of outsourcing non-instructional school services like transportation, food and janitorial, something covered in great detail in the Mackinac Center's 2007 school privatization primer. Their 2009 survey of Michigan public school districts found that more districts (44 percent) are contracting out for at least one of the three major school support services — food, custodial and transportation — than ever before.
More on school privatization in Reason Foundation's Annual Privatization Report 2009.