It's the sensible Costco concept applied to school budgets: Pool resources to buy materials and services in bulk for greater savings.
That's the essence of a practical, bipartisan legislative proposal that would require Minnesota schools to participate in a shared services purchasing program.
As Gov. Tim Pawlenty said on Wednesday, "There are 340 school districts and 150 charters in the state, but backroom functions don't need to be duplicated 490 times."
Under the proposal, the state's Department of Education would create and maintain a list of preferred vendors for services, including school materials, supplies, tools, equipment, technology, food services and transportation. The department would develop contracts with vendors and work with school districts and other stakeholders to craft a two-year plan to save money. Lawmakers and the governor rightly want the Legislature to approve the initiative early in the session so that it can go into effect during the 2009-10 year to give districts budget relief.
Pawlenty said school districts in other states have saved 5 to 15 percent in purchasing and information technology services. A Pennsylvania district, for example, saved $100,000 by sharing food services. And a California group of charter schools trimmed budgets by $20,000 per school through agreements on worker's compensation insurance. State officials did not offer an estimate on how much local districts might save.
In Minnesota, several examples of service sharing are up and running. For the past 40 years, the Technology Information Educational Services (TIES) group has provided IT, finance, human resources, payroll and other data services for its members. Currently, 38 mostly metro-area districts belong to the group. Studies have shown that TIES costs the schools less than they would pay independently. Similar regional school services organizations operate outstate. And a handful of intermediate districts were formed to share services and purchasing for things such as IT, food service and even laundry.
The proposed legislation says current cooperatives such as TIES are eligible to become state-sanctioned vendors. But the bill should also allow districts to opt out of the state plan if they can find quality, lower-cost services on their own.
While models of cooperation already exist in Minnesota, many school districts are not members of such groups. The proposed legislation would encourage more districts to get involved in service sharing.
It was encouraging that the plan was announced by a bipartisan group of legislators and Pawlenty. That's a sight too seldom seen early in this decade's legislative sessions. During Wednesday's news conference, DFL Sen. Terri Bonoff of Minnetonka and DFL Rep. Ryan Winkler of Golden Valley had prominent roles. Also present was Assistant Majority Leader Tarryl Clark, who noted that rolling out a bipartisan proposal for cost-saving efficiency measures made for a good start for the 2009 session.
Given the state's $4.8 billion deficit, we hope that collaborative spirit sets the tone as the Legislature and governor proceed through the 2009 session to balance the state budget.