SF Business Times, March 27, 1998

In June, Californians will vote on the Educational Efficiency Initiative, also known as "95–5." Supporters of the measure claim it will put more money into the classroom. In reality, a vote for “95–5” is a vote for less money in the classroom.

The United Teachers of Los Angeles (UTLA), the primary sponsor of “95–5,” claims that the initiative will send more money to the classroom by requiring school districts to decrease administrative red tape and spend 95 percent of every education dollar "on direct services to pupils, schoolsite employees, and school facilities" (hence the “95–5” moniker). But careful analysis of the initiative reveals that UTLA has a very different and self-interested agenda.

Buried in section “7,” paragraph “b,” the initiative defines “direct services to pupils” as “all instances where pupils are the direct beneficiaries of immediate and unbrokered services.” That is a pretty straightforward definition—except for the term “unbrokered services.” It does not appear in the California education code. When asked by the Legislative Counsel’s office to define the term, the authors could not give a satisfactory answer.

UTLA’s John Perez says that an “unbrokered service has to be provided directly to the student.” The initiative already dictates that pupils must be “the direct beneficiaries” of these unbrokered services. So what is an unbrokered service?

Despite attempts by the “95–5” authors to dodge the question, several examples in the text of the initiative suggest that unbrokered services include “transportation, cafeteria services, safety and security personnel protection services, and the services of a school supervisor or principal.”

These services have one thing in common: schools are beginning to provide them through private companies, a practice commonly known as contracting out.

School districts contract out certain services to save money. One New Jersey school district cut $1.5 million from its annual budget just by contracting out its transportation services. Other studies show that contracting out saves school districts an average of 15 percent. By contracting out for these "unbrokered" services, California schools can earmark the savings for the classroom and other projects that entail learning.

Like most teachers unions, UTLA opposes contracting out. By allowing private companies to provide services like transportation or food preparation, contracting out weakens the teachers unions’ bargaining position.

Here is the hidden agenda. The “95–5” initiative will make it all but illegal for school districts to contract out. Under “95–5,” any services that are contracted out would be “brokered” services. Fees for brokered services would have to come out of the school district’s administrative budget, even though these same services provided by the government would come out of the classroom budget. With the administrative budget capped at 5 percent of general costs, no school district could afford to contract out and would have to purchase them from unions at inflated rates.

Instead of buying another textbook or fixing a leaking roof, school districts would have to pay more for transportation, food and other services that they currently contract out.

The “95–5” initiative would actually limit school districts’ ability to save money. In short, a vote in support of “95–5” is a vote against more funding for classroom learning.

M. Royce Van Tassell is education policy fellow at the Pacific Research Institute for Public Policy.