Consolidation Studies Reach No Consensus

by Alexander Russo

No conclusive research supports or debunks school district consolidation, which can be affected by several factors, including student enrollment, geographic distances, pre-existing conditions in the districts and differences in research methods.

However, some commonly cited studies and reports on the subject may prove useful to administrators involved in a district consolidation.

* Rural education task force report. According to the 2005 National Rural Education Association Task Force Reports on School Consolidation, the educational and financial results of state-mandated school district consolidations “do not meet legislated expectations.” In addition, the task force finds that smaller districts “have higher achievement, affective and social outcomes.” Read the full report online.

* Syracuse University study: A recent Syracuse University study by William Duncombe and John Yinger examines consolidation in New York State’s rural districts between 1985 and 1997. The main economies of scale appear in both operational costs and capital expenses, their research reports. Some of these savings are obvious. “Doubling district enrollment cuts administrative costs per pupil by more than 40 percent,” the report says.

Other savings, in areas such as transportation, do not materialize. “Apparently savings in maintenance and in the scheduling of buses and drivers in larger districts offsets any increase in route lengths,” the report says.

The report concludes that doubling enrollment cuts costs per student by 28 percent for a 300-student district. The offsetting costs include increased capital spending at the rate of 5 percent as well as short-term adjustment costs.

“We conclude that consolidation is an effective cost-reduction strategy for rural school districts, particularly when they are very small, and that states should make certain that their post-consolidation aid programs do not encourage wasteful capital projects,” the researchers said. Read the full report.

* Goldwater Report. According to a 2004 report by the Goldwater Institute in Phoenix, Ariz., titled “Competition or Consolidation? The School District Consolidation Debate Revisited,” examines a 2002 report from the state auditor’s office and finds that school district consolidation is “unlikely to produce the hoped-for fiscal savings.” The Goldwater report finds that consolidation increases administrative costs and class size and reduces student achievement.

“Consolidation is a marginal reform, best implemented on a limited, case-by-case basis,” states the report, which suggests that increased competition, in the form of charter schools, would do better to improve student achievement and district efficiency. Read the full text.

* Deloitte Touche’s shared services study. A new study from the consulting firm Deloitte Research suggests consolidating services (also known as shared services) could be an effective alternative to district consolidation. Nationwide, Deloitte estimates districts could save $9 billion a year by aggregating just a quarter of the services beyond the commonly shared tasks of professional development and shared transportation directors.

According to Deloitte: “School districts have barely scratched the surface in terms of tapping into the cost savings potential and other benefits” from shared service agreements. Some examples the report cites of shared services include billing/payroll, janitorial services and information technology.

The report, “Driving More Money into the Classroom: The Promise of Shared Services,” concludes that sharing services is a better option than consolidation for many school districts because it makes it possible to educate students like a small district and still have the economies of scale and buying power of a large district. Read the full report.