Cost-Saving Hero: Shared Services
Q. The more we
consolidate and centralize education, the higher our administrative costs are
getting and the more bloated the educational bureaucracy becomes. How can we
enjoy the operating efficiencies of large organizations while still reaping the
rewards of decentralized management and local control?
It used to
be that more than 80 cents of every tax dollar allocated to public schools went
to pay for the teacher and curriculum, and less than 20 cents went for overhead.
But now that's changed: in most states, somewhere around 60 cents or less goes
for instruction, and 40 cents or more for non-classroom spending.
likes it, of course. Responsible school districts have long since looked into
privatizing as many non-classroom functions as possible to save money. Since
the lion's share of district spending is in personnel, and for the most part
those personnel have to be paid union wages and benefits, though, there's not
much more room for savings with that strategy, other than, of course, to try to
reduce the number of people on your staff and make what everybody does more
lots more than can be done with shared services - public school districts
joining together to share various non-educational functions and split the cost.
declining enrollment and budget cuts facing many districts today, and pressure
from adequacy and equity lawsuits to spend even more money on instruction than
before, smart school finance policy is to find new ways to manage the school
dollar more wisely.
services is anything but new: consider the one-room schoolhouse of decades ago,
where families across a wide geographical area would all share one teacher. But
it has taken center stage again as the easy-to-finance Baby Boom era, with its
steadily increasing enrollment and tax base, passes by, and the growth of
private schools and homeschooling causes school officials to hustle to find new
cost-efficiencies because of stagnant or falling enrollment and revenues.
adjoining school districts may job-share a superintendent or collaborate to
build a new gymnasium that both will use, for example. Several neighboring
districts may pool their employees for health-care benefits and get better
especially for the escalating costs of special education transportation, is a
natural candidate for multi-district cooperation, especially with today's fuel
likely categories include human resources, food services, information
technology, building maintenance, general administration, and other support
best is to work hard to create shared service contracts for all school district
expenses that aren't "mission-critical," or affecting the educational process
itself. And that goes far beyond toilet paper and lightbulbs.
is a lot of excellent information about school finance in the October 2005 article,
"Driving More Money Into the Classroom: The Promise of Shared Services," from
the Reason Foundation and Deloitte Research, on www.reason.org/ps339.pdf