Detroit’s school district is $715 million in debt, and Michigan Governor Rick Snyder is asking state lawmakers to funnel $70 million more a year over ten years to Detroit Public Schools to cover their operating debt.
WDIV-TV Detroit’s ClickonDetroit quotes the governor as saying that if nothing is done at this time and results in the district having “financial defaults,” Michigan will have to pay more in the future. He added that every other K-12 district would face higher retirement system bills.
Snyder has a plan for dividing the district that he outlined almost six months ago. He wants to propose legislation and is in hopes that the Republican-controlled Legislature will advance it by the end of this year. His plan includes having an education manager close low-performing schools, both charters and traditional schools, and dropping the mandatory common enrollment system in favor of a voluntary approach.
“There is no question that Detroit children need a solid education so they can compete in a global economy but also for their city to accelerate its revitalization,” Snyder said. “This is an opportunity to recast a structure that isn’t meeting the needs of the city’s families for a variety of reasons. Starting with a plan presented by community leaders, we have crafted a new approach that will give families quality public school options while stabilizing district finances.”
The city’s woes are not only financial; there have also been drop in enrollment and low student achievement, as well as structural inadequacies. An exam given nationwide ranked Detroit at the very bottom in the US in academic performance. There is no quick fix for DPS, according to the governor.
The Legislature is juggling recommendations from large numbers of community leaders and educators. The lawmakers’ package includes: creating a new, traditional public school district with an all-elected board by 2021; creating a Detroit Education Commissioner appointed by the mayor and governor; hiring a chief education officer; allowing the CEO, with community input, to hold low-performing schools accountable and to reward and increase the number of high-performing schools; calling for the CEO to operate the common enrollment system; and partnering with the city’s Financial Review Commission to repay the debt in full.
Snyder is trying to prepare for the fact that unpaid vendors may seek court orders that could cause financial disaster for the city. Sharon D. Lewis and Chad Livengood of the Detroit News write that Michigan school employee pension system is owed almost $100 million and could easily ask the court to make the district or state pay the debt. If lawmakers do not step up by assuming the possible $515 million in operating debt payments, the state could have to pay for DPS’ $1.5 billion unfunded pension liability.
The governor says the cost of paying off the DPS debt will be $50 per pupil for every student in the state. But he added that the School Aid Fund could pay an approximately $70 million annual payment for the next decade without taking money from other districts.
“It seems like that’s semantics,” said Craig Thiel, senior research associate at the Citizens Research Council of Michigan. “Clearly you’re taking money that would be available to other school districts to help a single school district.”
Detroit has lost almost 100,000 students over the past 10 years, according to Snyder’s office. Enrollment numbers have not been announced for this school year, but last year the district had roughly 47,000, writes Lindsay Vanhulle of Crain’s Detroit.
“I don’t use the bankruptcy word except as a very, very last resort,” Snyder said. “It is very reasonable and fair to say that compared to this solution, that solution could be much more expensive.”
Snyder said that addressing the problems with DPS is crucial to Detroit’s post-bankruptcy comeback because students already in the system and young professionals moving into Detroit will eventually have children of their own.