Issues arise concerned with consolidating departments
All districts require a superintendent and a school board, for example, and the same central administration may be able to serve a significant range of enrollment with little change in total costs.Second, education requires certain physical capital, such as a heating system and science laboratories, which require a certain scale to operate efficiently and therefore have a high cost per pupil in small districts.In many cases, however, state aid policies concerning consolidation are contradictory.
As a result, we now turn to empirical studies of consolidation, which can determine whether the net impact of consolidation on costs per pupil is positive or negative.
Because consolidation creates larger school districts, it results in lower costs per pupil whenever economies of size exist.
Economies of size could arise for many reasons, which we discuss in “Does School District Consolidation Cut Costs? First, the services provided to each student by certain education professionals may not diminish in quality as the number of students increases, at least over some range.
As a result, consolidation might increase a district’s transportation spending per pupil.
Second, consolidating districts may level up salaries and benefits to those of the most generous participating district, thereby raising personnel costs.
In New York, consolidating districts may receive an increase in their basic operating aid of up to 40 percent for five years, with declining increases for an additional nine years.