Privatization in schools is an extremely controversial topic. Large school districts provide significant
employment opportunities to various local communities which is obviously important.
We discussed in prior articles that eventually school districts will be faced with the problem of
expenses exceeding revenues. I predict this will be a reality in the next three to five years. I laid out
theses facts in earlier articles and the argument is compelling. Therefore, school districts need to
explore better ways of delivering quality education in a cost effective manner. Privatization, in school
districts, does have a track record of success.
The outsourcing of food service is one example. The privatization of food service programs has been
an undeniable success in school districts nationwide. Food service, is of course, the program that
delivers breakfast and lunch to our students. It is important to remember that profits are not allowed
in public education, however the accounting methods are based upon a private sector model. In
simple terms, food service programs are treated as businesses, so we record profits and losses. For
many years, the Hamilton school district has operated their food service programs at a significant
loss. This means that the program needed to be supplemented with funds from the general budget.
In Hamilton, for example all district employees remained on payroll until they reached retirement age
and then their replacements were filled by a private company. The Hamilton school district went
from a deficit to a surplus of nearly $700,000. In addition, we were able to modernize elementary
cafeterias at no cost to the taxpayer.
In another example, we purchased a large freezer with surplus funds that allowed us to take
advantage of generous food discounts. If polutry goes on sale, it is purchased in bulk and stored in
the freezer. These discounts dramatically reduces bottom line costs. It is important to note that the
students reported increased satisfaction with the quality and variety of the food offerings as well.
This is an outsourcing model that has proven to be very successful. Privatization in schools can be
very cost effective.