FACTS ABOUT SUBCONTRACTING IN THE PUBLIC SCHOOLS—NJSBA
TRENTON, May 13, 2002—New Jersey’s current economic climate is the worst possible atmosphere in which to restrict school districts’ ability to save money by sub-contracting services, the New Jersey School Boards Association told members of the Assembly Labor Committee today. The panel is considering a bill, A-1714, that would effectively prevent local school boards from subcontracting services. The measure applies only to local school districts and public colleges and would not affect state government, municipalities or counties.
"This year, New Jersey’s school districts are facing increased enrollment and higher fixed costs, such as those for insurance and utilities," explained Edwina M. Lee, NJSBA executive director. "Yet, state aid to education has remained stagnant, forcing districts to shift more of the cost of supporting the schools to already-overburdened local property taxpayers. Eliminating the subcontracting option would take away a financial management tool that many local school boards have found to be effective."
Subcontracting non-instructional services, such as transportation, cafeteria and maintenance, has enabled school districts to direct limited financial resources to the instructional program, the Association has found. In addition, many school boards have used the practice to provide a measure of property tax relief to their constituents.
In 1999, NJSBA surveyed school districts about their experience with subcontracting. The results reaffirmed the organization’s position that school boards should retain the option to subcontract services when they find the practice to be in the interest of the students, the education program and the community. Among the findings were the following:
The 250 school districts responding to the survey saved more than $28 million by subcontracting non-instructional services. They directed the savings to education programs (42%), to decreasing the budget or keeping property taxes under control (29%), and/or to new technology for the classroom, repairing facilities or hiring teachers (29%).
More than 90% of the school districts made accommodations for employees affected by subcontracting. Efforts included requiring subcontractors to hire or to guarantee interviews with displaced employees, offering severance packages, or privatizing positions only as employees resigned or retired. Some districts placed affected employees in suitable positions elsewhere in the school system.
School district savings reported in NJSBA’s 1999 survey included—Old Bridge, $4 million, custodial services, and $1.5 million, bus routes; Lenape Regional, $1 million, transportation and buildings-and-grounds operations; Moorestown, $100,000, food services and maintenance; and Lakeland Regional, $20,000 to $40,000 a year, custodial services.
The survey identified 271 full and partial subcontracting arrangements among the responding districts. The most common fully subcontracted service was cafeteria (132 agreements), followed by transportation (87). The most common partially subcontracted service was transportation (60), followed by custodial/maintenance (26).
The NJSBA survey asked districts to rate their level of satisfaction with subcontractors as excellent, good, fair or poor. The average grade they gave subcontracted services was "good."
In addition to NJSBA, a wide range of organizations has actively opposed previous legislative attempts to restrict subcontracting. These groups include the New Jersey State League of Municipalities, the New Jersey Business and Industry Association, the New Jersey State Chamber of Commerce, the New Jersey Council of County Colleges, the New Jersey Association of Colleges and Universities, Rutgers, the State University, the New Jersey Association of Counties, the New Jersey Association of School Administrators and the New Jersey Association of School Business Officials.