RD548 - Study on School Division Joint Contracting Incentives – October 15, 2016

Executive Summary:
Chapter 780 of the 2016 Acts of Assembly includes language instructing the Secretary of Education, in consultation with the Secretary of Finance, to develop certain approaches for incentivizing joint contracting between two adjacent school divisions. The language charged the Secretary with considering all the educational services available to school divisions; and to only apply incentives to circumstances where at least one of the school division’s populations is equal to or fewer than 4,000 students.

Legislative interest in this issue has grown in recent years under the attention of the Joint Legislative Audit and Review Commission (JLARC) and the Commission on Local Government (CLG). JLARC found in 2014 that the state’s approach to consolidation incentives was costly and arbitrary, after which the 2015 General Assembly eliminated existing school division consolidation incentives, and further directed the CLG to develop a process to determine a more appropriate calculation of additional state funds for future local consolidations.

The CLG found that incentivizing joint contracting of school services could assist many fiscally stressed localities without needing to overcome the local identity barriers that tend to impede full school division consolidation. The CLG found that while in recent years only three city reversions to town status have been successful, all three of those were situations in which joint contracts already existed between the school divisions involved. This may be due to the fact that entering into joint contracts may permit divisions to retain two distinct school boards and superintendents, even though many other division functions are consolidated. Continuing to maintain independent school division leadership helps communities maintain local identity. The fear of losing local identity, which is strongly connected to local schools, is commonly attributed to be the biggest barrier to total division consolidation.