Analysis: Consolidating School Districts Won’t Save Michigan $600 Million

(Editor's note: This is an edited version of an Op-Ed that ran in the Lansing State Journal on Sept. 5, 2010.)

State politicians and media are suddenly abuzz with the concept of consolidating school districts. Gov. Jennifer Granholm wants to spend $50 million to "incentivize" districts to merge, and she's getting air support from a new Michigan State University study claiming that $612 million could be saved by consolidating Michigan's 551 school districts into 83 single-county districts.

Policymakers should approach this study with extreme caution. For one thing, the study appears to contain a significant amount of material plagiarized from other sources. MSU says it's investigating, but from a public policy perspective the more immediate issue is the study's fatally flawed assumptions and methodology.

The original version of the paper, authored by MSU Education Policy Center senior scholar Sharif Shakrani, references just one source: a 2001 study of 12 school district consolidations in rural New York from 1985 to 1997. No explanation is provided for why this one set of data from a narrow corner of another state applies today, but the MSU author uniformly extrapolated the limited New York study results to every school district in Michigan.

This is astonishing, especially since the creators of the 2001 study concluded, "We find no support for the use of state tax dollars to encourage consolidation among districts with 1,500 or more pupils." Though more than half of Michigan's school districts exceed 1,500 pupils, Shakrani's report fails to mention this limitation. Syracuse Professor William Duncombe, one of the authors of that 2001 study, told Michigan Capitol Confidential that the MSU report was "not an appropriate use of scientific evidence."

A much more appropriate use of the New York findings would have been to extrapolate the savings figures to small rural districts. The projected savings would have been dramatically less, since most Michigan school costs come from our largest districts.

The MSU study is also flawed because it includes charter public schools in its consolidation savings equation. It states that charters are "not considered for potential inclusion in school district consolidation since they are intended to function independently..." But the data set it used does include charters, further inflating the savings estimate.

There are other errors. Capital costs are not considered, even though the New York source study found them to rise significantly after consolidations. Additionally, some spending categories were incorrectly defined and misapplied.

The MSU study drew interest because it provided a striking headline: Michigan could save $612 million by merely reorganizing its school districts. But the study's contents don't come close to supporting this claim.

The real determinants of Michigan school costs are not lines on a map or boxes on a bureaucratic flow chart, but labor expenses determined by local school boards and unions, plus legislators and the governor. For political reasons, the latter two would prefer to talk about a "safe" subject like school consolidation rather than engaging controversial school employee benefit and pension reforms that upset a powerful special interest group like the state's largest teachers union.

In an online chat about consolidation, Godfrey-Lee schools district Superintendent David Britten described the real fiscal problem facing school districts: "I'm sorry to say this, but there is very little incentive in public agencies, schools included, to save money."