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Many people assume that contracting out the provision of public services is more cost-effective and efficient than having public employees and public organizations provide them (Donahue 1989; Osborne and Gaebler 1992; Peters 1996) . Proponents of contracting argue that it enables governments to retain control over services while enjoying the advantages offered by competitive markets. The principal advantages cited include cost savings, bypassing personnel issues and acquiring capacities not easily obtainable in the public sector (Butler 1991; Hunter 1995; Savas 1985) . The allure of these perceived advantages is particularly strong among public school districts in the United States where school boards are sensitive to pressure to get more bang for the taxpayer buck. As a result, some school districts have aggressively sought to contract out non-instructional services.1

This report explores one type of non-instructional service — pupil transportation — which represents a significant area of contracting in public education. The report presents empirical evidence from a study conducted of Ohio’s 611 school districts. Drawing upon official T12 and T23 reports filed with the Ohio Department of Education by each school district from 1994 to 1998, the research offers a comprehensive evaluation of the advantage cited most often by government managers and policy-makers: cost-savings.

1Non-instructional services include such activities as accounting, public transportation, public relations, food service, architectural services, building cleaning and maintenance, construction, legal services and school security. For a detailed list see Hunter (1995, 144).

2Every district in the state is required to submit T1 reports to the state each fall. The reports detail for a given day the number of public and non-public students bused, miles driven by the district and type of transportation (board run, contracting, parental, etc.).

3T2 reports are filed annually with the state by each district engaged in transporting pupils. The reports itemize the expenses incurred for transportation, such as salaries and benefits of personnel, physical exams, training, maintenance and repairs, fuel, tires and tubes, bus insurance, rent and leases, utilities and supplies or, in the case of contracting, the overall costs charged to the district by a contractor.

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