Debunking Urban Legends Regarding The Efficiency of Consolidation

There is a what I call an urban legend that is being promulgated when it comes to size of school districts. There is a theory, which at face value, sounds reasonable. The theory is that Michigan schools would be more efficient with their tax dollars if they were larger, for instance, county-wide. Efficiency is usually measured in terms of administrative costs.

This is a pervasive theory which ought to be either readily confirmed or denied based on data. The data is readily available in the Michigan Department of Education Bulletin 1014. So, why isn't anyone looking at the data? (Maybe because theories or urban legends are easier to speak about if you don't have data to confirm their truth?)

With the magic of Excel one can download and slice and dice the Bulletin 1014 data to prove or disprove the theory.

So, allow me to disprove it:

Based on the 2007-2008 Bulletin 1014, here are the average "Business and Administration" costs per student for Michigan districts:

$1,163 - State wide average
$1,102 - Statewide average for all regular districts (i.e., w/o public school academies)
$2,123 - State wide average of the 222 public school academies

So, far it appears that regular districts are more efficient than public school academies in that regular districts have lower costs per pupil for business and administration costs. (So, why are we adding public school academies?)

Now, let's break down regular districts. Again, we are talking about "Business and Administration" costs per student:

$1,598 - Detroit City Schools
$1,065 - Districts greater than 10,000 enrollment excluding Detroit (there are 22 of these)
$1,173 - Districts from 7,500 - 10,000 students (there are 16 of these)
$1,014 - Districts from 5,000 - 7,500 students (there are 34 of these)
$1,014 - Districts from 2,500 - 5,000 students (there are 112 of these)
$1,052 - Districts from 1,250 - 2,500 students (there are 149 of these)
$1,205 - Districts less than 1,250 enrollment (there are 217 of these)

So, it appears to me that the data shows that the "sweet spot" for efficiency as measured by "Business and Administration" costs per student is with those districts in the range of 2,500 to 7,500 per student. The data at least seems to show that. There may be economies of scale by consolidating the "Business and Administration" operations of districts with enrollments of less than 1,250 students with similar, contiguous sized districts. Maybe.

Now within each group, certain districts are more efficient than others, no doubt. Thus, my solution rather than regurgitating an urban legend would be to start by encouraging (carrot or stick) those districts with higher than average "Business and Administration" costs per student to lower these costs. 10 percent of districts had "Business and Administration" costs of greater than $1,478 per student. 25 percent of districts had "Business and Administration costs of greater than $1,250 per in 2007-2008. Start there?

NOTE: The Bulletin 1014 defines "Business and Administration" costs as: "The total cost of general administration (central office), school administration (school office), business services, central services, and other support services."