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Chuck Carney
IU School of Education
ccarney@indiana.edu
812-856-8027

Last modified: Wednesday, July 18, 2007

IU study offers recommendations on school consolidation and shared services

FOR IMMEDIATE RELEASE
July 18, 2007

BLOOMINGTON, Ind. --School consolidation does not appear to improve student achievement, according to a new report by Indiana University researchers. Neither are meaningful financial benefits consistently generated from consolidation, they said, but sharing certain services may be a route to cutting costs.

The latest education policy brief from the Center for Evaluation and Education Policy (CEEP), "Assessing the Policy Environment for School Corporation Collaboration, Cooperation and Consolidation in Indiana," stresses that Indiana schools shouldn't expect an upturn in student achievement if they consolidate districts. Rather, the policy brief recommends administrators focus on operating efficiently within current budget constraints and exploring opportunities for shared services through collaboration.

"There are no compelling reasons to consolidate if the expectation is that school corporations are to raise academic achievement," said Terry Spradlin, associate director of education policy at CEEP. "However, there is some research that says -- for especially small and rural school districts -- there are some economic benefits that they, by consolidating, can increase their economies of scale and increase efficiencies."

The Indiana General Assembly financed the CEEP research two years ago. Spradlin said the funding grew from renewed interest in consolidation during lean state budget cycles. The state's last major consolidation started in 1959, reducing more than 900 districts to around 400 over 11 years. Since 1970, that number has dropped to 293 school corporations. The state legislature included a provision in the state budget bill passed in the 2007 session to provide money for school corporations to conduct consolidation feasibility studies or examine merging services with other corporations.

Spradlin said studies across the country show that another broad consolidation wouldn't necessarily help Indiana schools. But a targeted look at smaller corporations might be worth considering as a next step. "If we looked at perhaps those 20 school corporations in Indiana that have fewer than 750 kids, that may be beneficial," he said.

The brief recommends corporations consider pooling resources, particularly by fully utilizing the state's nine education service centers established to assist schools in each region of the state. Spradlin said there could be fiscal benefit if corporations share services in certain areas -- for example, bulk purchasing and insurance pools. "I think they'll be well-positioned to negotiate and generate more competitive policies in those sectors," he said.

While the report finds the state is generally doing a good job navigating this highly political issue, it could do more to encourage cost savings. Spradlin said the Indiana General Assembly should help fund implementation plans for school corporations that conduct a consolidation feasibility study.

The report also recommends the creation of financial incentives to encourage schools to operate in a fiscally efficient manner. The authors suggest allowing school corporations to keep more of their savings generated from consolidation or shared services and providing them with statutory flexibility in moving savings from one fund to another.

The full report may be viewed at http://ceep.indiana.edu/projects/PDF/PB_V5N5.pdf.

CEEP promotes and supports rigorous program evaluation and policy research primarily, but not exclusively, for education, human services and non-profit organizations. Its research uses both quantitative and qualitative methodologies. To learn more about CEEP, go to http://ceep.indiana.edu.

Media Outlets: the following comments are available as mp3 files on the IU School of Education Website at http://education.indiana.edu/audio.html.

Spradlin says no research finds that consolidation means better student achievement:

"The research says that consolidation in general is not beneficial from an academic standpoint. There are no compelling reasons to consolidate if the expectation is the school corporation or school district intends to raise academic achievement. However, there is some research that says -- for especially small and rural school districts -- there are some economic benefits that they, by consolidating can increase their economies of scale and increase efficiencies. But that's really on a limited basis."

Spradlin says there's no need for a major school consolidation in Indiana:

"To a limited extent, Indiana could benefit from another round of consolidation, but not a wide, sweeping round of consolidation, not a broad kind of consolidation. But, if we looked at perhaps those 20 school districts or corporations in Indiana that have fewer than 750 kids, that that may beneficial."

If school corporations pool resources on things like purchasing insurance coverage, Spradlin says they might see savings:

"Having larger trusts, if you will, or pools of schools participating together, I think they'll be well-positioned to negotiate and generate more competition in those sectors. So that's one of the suggestions, is that schools should continue to explore cooperation. If they feel consolidation is not for them, they shouldn't stop there. They should consider opportunities for pooling resources or sharing services."