New York School Bus Contractors Association



Agency Activities Board Members Calendar Contact Us Directory Home Industry News Legislation Links Membership Security		Attempts to Restrict Outsourcing of School Support Services: Background and Status The Issue As public schools look for ways to increase efficiency, save money, and concentrate more of their resources on their educational mission, many of them turn to private companies to take over their non-educational support functions. Across the nation, about 30% of public school districts outsource one or more of their support services, most commonly food service, custodial service, and transportation. There is a growing movement among public employee unions to restrict, through state legislation, the ability of school districts to privatize support functions. These efforts have been successful in two states, and are under active consideration in others. The effect of the legislation, when successful, is to make consideration of outsourcing so cumbersome for school boards and so unattractive to contractors as to effectively end the practice. Background In 2002, the California legislature passed and then-Governor Davis signed SB 1419, a bill which allows school districts to contract for "personal services currently or customarily performed by classified school employees" only under very restrictive conditions. The Board must be able to demonstrate significant savings using calculations that are weighted against the private sector; outsourcing can not reduce employee wages or benefits; the contract may not displace any employees; the Board must show no future economic risk from contractor rate increases; and the economic benefits of contracting must be high enough to outweigh "the public's interest in having a particular function performed directly by the school district employees." The bill was amended in the legislative process to grandfather current contracts. Once the effects of the bill became apparent, the educational community tried to convince legislators to repeal the law. Even with the strong support of Governor Schwarzenegger, five attempts over the intervening years to repeal SB 1419 have failed. The California law has spurred public employee advocates in other states to propose similar legislation. In August, the Governor of Illinois signed a similar bill into law, with even more burdensome paperwork and public disclosure requirements for school boards. Common Elements While the individual bills in the various states differ somewhat, they all have the following common elements: Preservation of public employee jobs, wages and benefits Burdensome paperwork and disclosure requirements Unrealistic mandates for savings guarantees Intrusion of union control into contracting process Interference with local outsourcing efforts to produce efficiencies or control labor costs Loss of local school board control and flexibility Erosion of the private sector market Current Status In addition to the California and Illinois bills which have been enacted, the following states have active legislation under consideration. Minnesota Bills were first introduced in 2006, but died in committee. They were resurrected in 2007, and were tabled in committee for consideration next year. The bills require a minimum contract savings of 15%, taking into consideration any concessions by the employee union, and would require matching employee benefit packages. They also require extensive public disclosures from contractors, and prohibit contractors from speaking about unions. Oregon HB 2754 was introduced last year, with language essentially the same as the California bill and the additional provisions that the contractor must accept card-check recognition of unions, and that the requirements of the bill apply to renewal of existing contracts. The bill was left in committee at adjournment to be taken up again in 2009. Ohio The Governor's budget bill for 2008 included a provision that would repeal the ability of local school districts to outsource certain support services. Last minute lobbying efforts were successful in removing that provision from the bill. Michigan SB 424 makes the decision of school boards to outsource support services an allowable subject of collective bargaining. It is currently a prohibited subject. The bill passed the House and is now in the Senate Education Committee. Need for Action The recent success in Illinois will encourage affiliated unions in other states to be more aggressive in pursuing these anti-outsourcing laws. These efforts not only threaten the economic survival of companies that are currently providing valuable services to public school systems on a competitive basis, but also threaten the ability of local school officials to provide these services in the most cost-effective manner possible. They could even increase costs for those communities that desire to use public employees for these services by significantly reducing the bargaining position of school administrators in labor negotiations with public employee unions. This is not a pro-union or anti-union issue, as many of the private service providers also use union labor. Rather it is nothing more than "featherbedding" measures to protect a group of public sector employees that enjoy some of the highest and most costly benefit packages in the U.S. labor force. Efforts to counteract these anti-privatization measures at the state level will require a national effort targeting the battleground states. The campaign will require public relations and advocacy at the state level which would be best undertaken by a broad coalition defending the ability of local school districts and governmental agencies to make their own choices on how best to provide these services through a balancing of costs and efficiencies, rather than union preferences.
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