Effects of Consolidation

Article that Examines Effect of Consolidation on System Budgets

Mergers, Annexations, Dissolutions, Alexander Russo, School Administrator, v63 n3 p10 Mar 2006

Consolidations come in all shapes and sizes, including mergers, annexations and dissolutions. They do not all take place under state mandate, however. A handful of districts consolidate every year in some states like Illinois that have large numbers of small districts, many of them dual districts that serve K-8 or 9-12 in the same geographic area. This article talks about district consolidation and the political, logistical and financial challenges associated with it. 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.

Several Studies Summarized in the Article:

• 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."
• 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. "Doubling district enrollment cuts administrative costs per pupil by more than 40 percent," but savings in other areas such as transportation do not materialize. "We conclude that … states should make certain that their post-consolidation aid programs do not encourage wasteful capital projects."
• 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."
• Deloitte Touche study, "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.