Last year, the Goldwater Institute reviewed decades of empirical evidence, which showed the bigger the district, the bigger the bloat. Moreover, Arizona's best smaller districts averaging around 300 students, along with the best medium-size districts, averaging around 2,400 students, consistently spent as little or less than the state's largest districts, averaging over 34,000 students.
Bigger districts are also unlikely to yield the hoped-for savings. Even if the most expensive types of administrative costs could be contained, and every dollar actually trickled into the classroom, the savings would likely amount to around $17 per-pupil. Worst of all, a growing body of evidence spanning twenty years shows making school districts bigger hurts student achievement.
Consolidation is a marginal reform, best implemented on a case by case basis. However, promoting a competitive educational marketplace has a proven track-record of success. By fully exercising public school open enrollment, school efficiency could rise by 10 percent; student achievement could be roughly 3 to 6 percentile points higher; and spending could be almost eight percent lower. The competition from expanding Arizona's charter schools could improve test scores of charter students and students attending nearby traditional public schools by 1 to 3 percentile points. So if we're serious about student achievement and savings, we should make districts leaner through competition, not bigger through consolidation.
"Competition or Consolidation? The School District Consolidation Debate Revisited," Vicki Murray and Ross Groen, Goldwater Institute Policy Report #189, January 12, 2004.