Union, governor object; projected savings of $18 million over five years
The Grand Rapids Board of Education voted this spring to privatize its school bus services in a move that the district says will save $18 million over the next five years.
The district faced an $18 million budget deficit at the end of this year, which prompted the board and superintendent to look for ways to steer Grand Rapids Public Schools off the path to insolvency. Last March, plans for privatization of various district services were introduced as a means to stave off reductions in classroom-oriented expenses. School Board President David Allen said that Superintendent Bert Bleke was "looking at cuts and changes that ran ‘from very radical to minor,’" according to The Grand Rapids Press.
In order to spare instructional cuts, the board agreed that measures would have to be considered, especially in light of a projected 800-student drop in enrollment next school year.
The Michigan Education Association came out against the proposed privatization plan, suggesting it would put students’ safety at risk and that the Legislature has been underfunding the Grand Rapids district. Grand Rapids Educational Support Professionals Association President Steve Spica, whose union is affiliated with the MEA and represents bus drivers and custodians, reportedly told The Press, "I’d rather see them run the district until we run out of money and then close the doors. That would send a message to the state."
As of June, no plans are being considered for a state bailout similar to the state’s takeover of the Detroit Public Schools in 1999.
The Press reports that in response to sentiments like Spica’s, Ari Adler of Sen. Ken Sikkemma’s office announced that any such "stunts" would not force structural change to Michigan’s school funding system, and that school districts should be encouraged to make responsible budget decisions when finances become tight.
The school board voted in April to pass a privatization measure by a tally of 5-4.
Preliminary budget plans had included eliminating 200 district jobs and privatizing 400 others, including custodians, central office staff and teacher aides, with school closings phased in over the next few years. Bleke maintained that even employees who would be able to keep their jobs would likely be required to cut back in other areas, some having to pay portions of their health insurance or possibly forgo scheduled pay raises.
The MEA expressed displeasure over the possibility of privatization efforts taking root in Grand Rapids. The district is the largest in the state for the MEA, according to The Grand Rapids Press. MEA Communications Director Margaret Trimer-Hartley told the newspaper that the privatization issue was "critical," and, "If a large and high-profile district like Grand Rapids privatizes, it could hurt members all over."
Before the scheduled board vote, union members were given the opportunity to come up with their own package of concessions to offer as an alternative to privatization plans. Board President Allen expressed a willingness to review the concession package, but only if it came close to saving the district $5 million, reported The Press.
Press research revealed that union employees received full dental, vision and health coverage through a union provider if they worked more than 16 hours a week. Their last contract included 10 to 20 paid vacation days, seven to 10 paid holidays, three personal days and 10 sick days.
In April, the bus drivers offered concessions that included giving up vacation time, pay raises and health insurance for their families, totaling $1.9 million in savings for the district. However, these savings were offered only for the remainder of the current year’s contract. The board has said that contracting with privately run Dean Transportation would mean long-term, substantial savings of $18 million and would free the district from paying rapidly escalating employee retirement expenses.
After the board vote, 225 Grand Rapids Public Schools bus drivers and mechanics learned their jobs will be outsourced to Dean next year. The transportation company says that 140 district drivers, who will be able to join a union representing Dean drivers, have since applied with the company.
A concession plan that included wage freezes, health insurance contributions, less vacation and sick time, and modifications to job descriptions was offered by custodians and accepted by the school board. The district could not provide exact savings figures for the concession plan, but according to an MEA representative, projected savings total several million dollars.
Gov. Granholm, giving a speech at Grand Rapids’ Creston High School days after the board vote took place, declared that "Privatizing employees is not the way schools should be saving money," according to the Muskegon Chronicle, saying she thought the state has "done better bringing work inside instead of contracting it out." The report also indicated that Superintendent Bleke was not surprised by the comments, and asked if Granholm could generate a better solution.
Bleke, who will retire in June 2006, told The Press that he is optimistic about the future of the district now that one major budget hurdle has been cleared, "I honestly think this is the best finish to the school year we’ve had in a long time."
Grand Rapids’ WOOD-TV reports that the lowest hourly wage for a GRPS bus driver was $14.38. Dean Transportation pays drivers $11.24 an hour.
According to Standard & Poor’s, over the last five years Grand Rapids Public Schools have lost 2,650 students. The district was spending as much as $10,634 per-pupil; however, only 47 percent of that figure was actually going "into the classroom."