By Michael LaFaive and James Quintero

Money that could be spent on classroom supplies and textbooks is being lost to the educational bureaucracy, according to a new survey of Texas school districts.

The new statewide survey of Texas’ 1,025 independent school districts, prepared by the Mackinac Center for Public Policy, a Michigan-based research institute, sought to find out how many school districts — if any — are getting the most bang for their buck by contracting out noninstructional services, like transportation, food, and custodial work. What the survey found is that there’s a almost-universal need for improvement in the current spending structure, with lots of potential upside for classroom kids.

Done right, competitive contracting, whereby government invites competition into the bidding process from qualified service providers, can help the school districts realize cost savings, relieve district leaders of management headaches, and improve service delivery by finding the best providers at the best possible price. This tactic is one that’s already proven effective in other states.

In Michigan, as one example, many of the state’s 542 school districts have come to widely embrace the competitive contracting concept — and have realized some impressive gains as a result.

In 2005, the number of Michigan school districts contracting out for transportation services was a mere 3.8 percent, almost exactly where Texas is today. Today, Michigan’s figure is closer to 27 percent, a 598 percent increase. What’s more, contracting out for custodial and food services has also risen dramatically, growing from 9.4 percent and 28.6 percent of districts in 2005 to 52.2 percent and 42.8 percent today, respectively.

Part of the reason that Michigan school districts have come to rely so heavily on competitive contracting is that it frees up valuable resources for the classroom. It’s something of a win-win for administrators and students.

Competitive contracting has so much potential that Texas school districts, always vocal about the perceived lack of available funding, can no longer afford to ignore it.

The Mackinac Center found that only 153 districts, or 15 percent of those surveyed, contracted out for food services, the highest contracting rate of all three areas. Custodial and transportation contracting topped out at just 9.8 percent and 3.8 percent, respectively.

Statewide, 22.8 percent of all conventional public school districts in Texas contract out for at least one of the three major noninstructional services. Only nine districts, or less than one percent, contracted out for all three noninstructional categories, transportation, food, and custodial services.

Texas school districts’ reluctance to adopt competitive contracting practices means that a whole lot of money is being left on the table. In recent years, the Mackinac Center has found per-pupil savings ranged from $34 for food contracts, $110 for transportation and as high as $191 for a custodial services. If even a fraction of those savings can be realized in Texas, then that’s a whole lot of money that can be better spent providing pencils and paper to kids and incentives to good teachers.

It’s time that Texas school districts learned a thing or two about competitive contracting from Michigan schools.

LaFaive is director of the Morey Fiscal Policy Initiative for the Mackinac Center for Public Policy. Quintero is the director of the Center for Local Governance at the Texas Public Policy Foundation.