Prior to 1994, Michigan’s Public Relations Act (PERA) afforded public employees the right to collective bargaining over matters of wages, hours, terms and conditions of employment. Public Act 112, of 1994 put servere restrictions on those rights. One of those restrictions made the question of outsourcing of any “non-instructional” services non-negotiable.

House Bill 4533 (Meisner, D-Ferndale) would restore the right to bargain collectively over the issue of whether or not to contract with a third party for one or more non-instructional support services and the procedures of such contracting efforts. It would restore the right to bargaining collectively on the question of the impact of such contracts on current employees.

House Bill 4533 passed the House on July 25, 2007 and has been sitting in the Senate Education Committee every since. Please contact your State Senator urging support of House bill 4533.

Talking Points

1.     Privatization Does Not Necessarily Save Money.

Contractors frequently low-ball or underbid to win a contract, raising rates after they get established and agencies have contracted with them.

District officials rarely consider "hidden costs" including the cost of converting public services to private providers and the cost of monitoring and enforcing the agreement, which the federal government estimates adds at least 4% annually to the total contracting out cost to taxpayers.

Contractors often pad their profits by selling their own equipment, supplies or additional services to the district or agency at a high markup.

2.     Private Contractors Are Less Accountable to The Public and Elected Officials.

When in-house expertise and equipment are eliminated, the district loses its capacity to provide certain public services and becomes dependent on the private contractor.  Termination clauses are rarely invoked by district officials because of their financial and political cost.

Private contractors are not required to open their records or decision making process to the public, and are not covered by open meetings laws or freedom of information acts.

Contracting-out increases opportunities for corruption, allowing school officials to award contracts to political cronies or family members.

Lax screening requirements can put the public at risk.

3.     Privatization Hurts Local and State Economies.

Contracting-out exports taxpayer dollars from employees and communities to big corporations, often headquartered out of state.

Communities lose public sector jobs with family-supporting wages and benefits, leading to increased social service costs.

Local companies that provide supplies, services or equipment to government agencies lose out when a large contractor wins a bid and their contracts are canceled.

4.     There is an Alternative:  Improve Delivery of Public Services Through Partnership With Front Line Workers.

School districts have saved money and improved services by relying on the ideas, experience and commitment of experienced workers, actively involving them in restructuring through joint efforts.