source: screenshot of Google Images for “Spidey Sense”
Earlier this year, various proposed bills emerged at the Legislature that would require small public school districts to consolidate. While the bills have inspired a great deal of controversy, one key aspect has been left unexamined. In short, it has been simply assumed that consolidating small school districts will lead to greater efficiency and cost savings.
The stated goal of these bills is to create more “efficiency” through district consolidation. In other words, instead of a number of small districts, these districts could merge and thus, in theory, find savings by cutting redundant positions or services and find economics of scale (e.g. think buying in bulk at Costco versus small units at CVS). So let’s summarize the proposed bills.
With few other details, the first bill would require public school districts with fewer than 2,000 students to consolidate. Similarly, the second bill would require towns with fewer than 40,000 resident to consolidate public school districts associated with those towns. The final Governor’s bill would form a committee, commission some committee reports, and put together a plan for district consolidation. The bill includes some potential of incentives for districts to consolidate.
The first two bills are somewhat more clear cut about which districts consolidate, while the third bill is less clear on that point but has more direction about a process. That’s a very short summary, but we can unpack more later.
So would consolidating districts save money by reducing redundant services or creating greater efficiency? It seems like common sense. It might work in some cases and depending on the implementation. But it’s not as simple as it seems. Here are a few considerations.
District size is only one measure in determining efficiency.
When people conduct efficiency analyses, district size is only one measure of understanding costs. While it is true that rural districts tend to cost more on a per-pupil basis, that doesn’t mean the they are less efficient, per se (Baker, 2018).
Scholars can do complex statistical analyses to understand whether one group of districts is more efficient in terms of cost and performance (Baker, 2018). Other measures include spending, district demographics and enrollment, academic achievement, town geographical characteristics, labor costs, and other variables.
Consolidating districts can reshape labor markets in unintended ways.
A concern of people that study consolidating school districts is that this reform could lead to unintended consequences in the labor market. Yet, in the public discussion, it is assumed that consolidating districts can lead to eliminating redundant positions or merging functions like a superintendent for example.
But let’s think this through for a minute.
Consolidate two districts into one and only one superintendent is needed, right?
Here’s a problem. This move would change the labor market.
The new superintendent might command a higher wage to oversee a larger district and might need more help to administer it.
With regard to teachers, there are other issues to consider. Here’s an example.
If three small, rural districts consolidate, there would be one larger employer and also three labor associations and agreements to consolidate. Which collective bargaining agreement would prevail? The more generous pay scale (average pay is $60K)? something in the middle (average pay is $50K)? The lowest (average pay is $40K)?
Two of the bills mention collective bargaining, but don’t provide many details. In Massachusetts, a consolidation law requires that the most generous collectively bargained pay scale for teachers would prevail when districts merge (Cronin, 2010). So if that were the case in Connecticut, instead of three districts with varying pay scales, there could remain a much larger one with larger pay for all the teachers. A simulation of Illinois district consolidation predicted a similar issue of increase in teacher pay with consolidation of small public school districts (Heiney, 2012). These unintended results of changing the labor market would cut into potential savings of merging school districts.
The incentives offered to districts to consolidate can be larger than cost savings from consolidation.
The Governor’s bill and proposal includes potential incentives to districts that consolidate. Unanswered questions remain such as: What kind of incentives are we talking about? And how big? These details matter.
Consolidating school districts, small or large, might lead to some degree of greater efficiency or cost savings. But in particularly small districts, these savings might be very small. It’s simple math.
Merging two districts with a few hundred students and cutting a principal or superintendent is only going to get you so far in terms of cost savings, maybe a few hundred thousand dollars. In Hartford, CT, closing three schools serving more than 1,000 students supposedly saved $5 million for three years for a total of $15 million (again, supposedly). The scale is just different. (I’m neither supporting closing schools or merging districts here, just providing a comparison.)
And if the incentives are large enough in terms of aid grants or capital improvement grants to small districts to consolidate, these could end up being larger than the money saved. Scholars found this issue in Iowa after consolidation of small school districts in the 1990s. Small districts took the incentives to consolidate, but they outweighed the cost savings. The ultimate result was that limited State funding was diverted from more needy school districts to rural school districts that did not need more funding (Gordon and Knight, 2008).
These are some things to consider. There are tons of questions about these proposals and very few details. When I see bills like these without much detail and with limited analysis, it raises my Latino spider sense that something is seriously suspect.
More to come…
Views expressed in this blog are those of the author and do not necessarily reflect the official policy or position of Trinity College.
References
Baker, B. D. (2018). Educational Inequality and School Finance: Why Money Matters for America’s Students. Cambridge, MA: Harvard Education Press.
Heiney, J. N. (2012). Can State & Local Government Consolidation Really Save Money. Journal of Business & Economics Research, 10(10), 539–546.