Michigan Orders Detroit To Close Half Its Public Schools

via memeorandum

CBS reports a short AP story with only a couple details.

(AP) DETROIT – State education officials have ordered the emergency financial manager for Detroit Public Schools to immediately implement a plan that balances the district’s books by closing half its schools.

The Detroit News says the financial restructuring plan will increase high school class sizes to 60 students and consolidate operations.

[Emergency Financial Manager Robert] Bobb filed his deficit elimination plan with the state in January, saying it would wipe out the district’s $327 million deficit by 2014.

In 1994, Detroit approved a 1.57 billion dollar bond issue for its 175 schools. By 2009, 14 of the schools that had approved spending had been closed down or consolidated. That same year, 2009, Detroit passed a 0.5 billion dollar bond issue for school construction and improvement. According to Detroit Public Schools website, there are now 142 schools in the district. Of course, Detroit is still paying on both bond issues. And closing half the schools would mean reducing the number of schools from 1994′s 175 to 71. In effect, after the closings, Detroit will be paying on capital improvement bonds equaling over 29 million dollars per open school.

It looks like that Porkulus money is coming back to bite the Detroiters who fed at the federal trough, just as the Detroit Federation of Teachers (who actually supported the 2009 proposal) warned.

The leader of the main teachers union of Detroit Public Schools, Mark O’Keefe supports Proposal S. O’Keefe who is the President of the Detroit Federation of Teachers supports the proposal, but has taken Robert Bobb the lead spokesperson of the bond referendum to task over hidden property tax increases.

During a public hearing on October 19, 2009, O’Keefe stated: “what has been said is the taxes aren’t going up, they’re staying at the same level longer.” O’Keefe further pointed out: “any way you cut it, the (stimulus) money is going to have to be paid back” citing the possibility of property tax increases. O’Keefe cited the possibility of property tax increases with having to come up with a local match as The American Recovery and Reinvestment Act of 2009 requires in most cases for government entities who accept these dollars to repay the government. Also, O’Keefe warned school board members and prospective voters that people remember the mismanagement that plagued the 1994 bond referendum was approved and felt that voters in 2009 were more skeptical on approving another high dollar bond referendum.

According to Detroit Public Schools’ own FY2010 budget report (pdf), at a time when the economy was still going strong prior to the 2008 bubble burst, Detroit schools were deficit spending in a big way.

The projected FY2009 Year-End cumulative deficit of $276.8 million – reduced from the original projections at the beginning of the emergency financial period – is equivalent to 43.6 percent of the General Purpose Fund 11 expenditures projected for the year. If budget trends were allowed to continue in FY2010 without corrective action, it is estimated that the deficit would grow to over half a billion dollars by the end of FY2010. This tremendous gap results from seven consecutive years of deficit spending beginning in FY2003.

During the period of FY2002 – FY2009, the District?s only year of positive operating budget results was FY2005, when DPS borrowed $210 million to pay off the deficit at that time, and to cover the underlying imbalance between spending and revenues that was still continuing to grow. At a time when proper stewardship of DPS?s limited resources was most important, difficult decisions were not made, and those that were made were not executed. [page 6]

Over the past decade, there has been a massive decline in student enrollment, a decline that is unmatched by the decline in population.

In the Fall of 2008, DPS enrollment in K-12 was 94,054 – more than 70,000 students fewer than in the Fall of 2000 (166,887). District demographers project a further decline of 10.7 percent (10,277 students) by the Fall of 2009, reducing enrollment to 83,777 students – roughly half of 2000 levels.

While regional economic decline has contributed to this trend, the drop in DPS enrollment far exceeds the decline in City population. In large numbers, DPS students are choosing to leave the system to attend charter schools, private schools, and open enrollment public schools in neighboring communities because of an erosion of confidence in the quality of a DPS education. Throughout the decade, the decisions made to invest more in the status quo than in children have contributed to the District?s downward spiral. [page 7]

More about the student flight later.

Other Key Budget Drivers

Along with declining enrollment, the District budget faces budgetary pressure from multiple factors further detailed in the Summary of Revenues and Summary of Expenditures sections to follow. These factors include:

* Cuts in Michigan per pupil funding as a result of statewide economic pressures;

* Weakness in local property tax receipts due to regional industry, commercial, and housing market decline;

* Extraordinary debt service resulting from the FY2005 decision to pay off the deficit in that year with borrowed funds;

* Rising healthcare and pension costs for District employees, consistent with national benefit cost trends;

* Central administrative staffing that had not been reduced in prior years at a pace commensurate with declining enrollment;

* High facilities maintenance and utility costs associated with aging infrastructure;

* Outdated technology and inefficient practices, resulting in transportation and other operations costs at levels well above national urban district averages;

* Inadequate integration of special education services into the District?s regular education programs, requiring large General Purpose Fund subsidies;

* High rates of poverty and crime in the surrounding community, contributing to greater needs for school security and safety than in other Michigan districts; and

* Historically weak management systems and internal controls, eroding accountability and integrity of the dollars spent by the District. [page 7,8]

As part of the plan to fix DPS’s problems, the FY2010 budget noted that 10 employees were already referred for prosecution(!) while others were referred for termination as a result of Inspector General investigations. In addition, the budget plan included “Employee benefits reform strategies, including dependent eligibility verification, vendor rebids, and plans to negotiate a more affordable healthcare program with the District?s collective bargaining units.”

Over $350 million in General Purpose Fund dollars was allocated to schools for FY2010. This is primarily composed of salary and benefits for over 3,000 teachers. With more than two-thirds of total FY2009 projected District spending on personnel such as teachers, principals, custodians, and security officers, escalating workforce cost trends nationally are particularly difficult for DPS. DPS is projecting to spend $127.7 million on active employee health benefits in CY2009 (All Funds), and underlying costs per employee are expected to increase by approximately 10 percent in FY2010.

According to the State of Michigan, Office of Retirement Services, DPS will need to contribute 116.7 million to the Michigan Public Schools Employees Retirement System in FY2009 (All Funds) for pensions and retiree medical care at a rate of 16.5 percent of salaries. At the start of the decade (FY2000), the rate was just 11.7 percent. Next year, the FY2010 rate will rise again to 17.0 percent. [page 21]

The health and pension benefits to Detroit public school employees paid out on top of their salaries are outrageous and need to be severely cut back. But there’s that collective bargaining thing again, preventing the taxpayers from paying an appropriate amount of tax dollars and instead requiring the taxpayers to give out Cadillac Plans with all the trimmings.

But at least Detroit Public Schools puts out a superior product, right? Oops. From 2004 to 2008, Michigan’s graduation rate has steadily declined from 88.7 percent to 75.5 percent, while Detroit’s graduation rate has been in the 58 percent to 68 percent range. That’s not a good product. But at least test scores are good, right? Well… The Michigan Educational Assessment Program disagrees. While the state of Michigan passes at a rate of 81.0 percent for reading and 82.1 percent for math, Detroit passes at an anemic rate of 59.7 percent for reading and 58.9 percent for math. That “not good” product has become a highly inferior product. It’s no wonder parents are taking their kids out of Detroit public schools and putting them elsewhere. Wouldn’t any concerned parent pull their kids out of such failures for schools?

And why pay for such Cadillac benefits for such failures of educators? Oh, that’s right, TENURE AND COLLECTIVE BARGAINING (financial hostage-taking). You can’t fire the teachers and you cannot pay them what they’re worth because the contract between the union and the union-selected government won’t let you.

But at least they’re hundreds of millions of dollars in the red. Good money after bad.

31 Comments

  1. Well, let’s hope Chryslers aren’t built by Detroit Public School products. They’ll fall apart faster than Yugos, which were built by another Communist enclave, the defunct Yugoslavia.

  2. This represents a victory for Republicans, no? A disaster you can believe is Obama’s fault. Lots of government workers out of work. A larger strain on the unemployment system. A huge hit to the economy. Lots more uneducated citizens. Lots of fresh, young bodies for the mills.

    I figure Republicans are aiming for the Dark Ages II. Certainly with lots of witch-hunting a heretic-burning. Celebrate this step of regress!

  3. You’re an idiot, Naggy. But that’s a given. Detroit Public Schools, controlled by the leftist unions and leftist public officials, have been delivering a failed product for many, many years. And have been deficit spending for many years. And have a pension-and-health expense that is far out of line with the private sector.

    The multi-phase failure is all on the heads of the leftists at the federal, state and local level. Here’s a clue, Naggy: name the last Republican mayor of Detroit and the year he was mayor. Name the last Republican-controlled Detroit City Council and the year that occurred.

    I bring facts to the table, Naggy, while you bring bloviations.

  4. Nangleator says:
    “This represents a victory for Republicans, no? A disaster you can believe is Obama’s fault. Lots of government workers out of work. A larger strain on the unemployment system. A huge hit to the economy. Lots more uneducated citizens. Lots of fresh, young bodies for the mills.

    I figure Republicans are aiming for the Dark Ages II. Certainly with lots of witch-hunting a heretic-burning. Celebrate this step of regress!”

    So let me see if I get you straight. After decades of corrupt Democrat featherbeding and crony capitalism, decades of the Dems screwing the private sector (both workers and businesses), decadeds of political corruption and nepotism it is now somehow a “victory for Republicans”? So you really believe we are like you guys and want to see our cities, states and nation suffer to make a political point? You are one sick mother-fucker.

    Here you have the chance to say “perhaps we were wrong” but you’d rather project yoru own sick idea of political justice on the rest of us. This isn’t a joke nangleator nor is it political one-upsmanship. This is what far left policies do do a people, a culture and eventually an nation. But rather than own up to how bad these policies are you would rather project your own sick version of na-na-na-na-na-na on us. Keep pullin’ that Democrat lever you brain dead tool of a pinko. If you can’t see the destruction they have wrought to every liberal enclave around this nation then you are blind.

  5. This represents a victory for Republicans, no? A disaster you can believe is Obama’s fault. Lots of government workers out of work. A larger strain on the unemployment system. A huge hit to the economy. Lots more uneducated citizens. Lots of fresh, young bodies for the mills.

    I figure Republicans are aiming for the Dark Ages II. Certainly with lots of witch-hunting a heretic-burning. Celebrate this step of regress!

    I love it – your country is facing serious and growing challenges in technological industries from Asia and China, you know education is vital to keeping your country competitive – and you’re now sticking 60 kids in a high school class!

    You’re right – the Republicans are aiming for a renewed Dark Ages. They don’t care what happens to the country as a whole as long as they’re the barons, and everyone else the proles toiling for them.

    And the rest of us around the world simply laugh our asses off and plan to deal with a future featuring the USA sliding into irrelevance.

  6. Detroit Public Schools, controlled by the leftist unions and leftist public officials, have been delivering a failed product for many, many years. And have been deficit spending for many years.

    How can the schools “deficit spend”, PB – when they have no power to raise funds?

    Here’s an idea – why not raise taxes to where they were between the 1940s and 1980, and pay for good schools?

  7. Phoenician: “…why not raise taxes…”

    Geez, Phoenician! They want the good old days back… The 1950′s. But they don’t actually want the 1950′s back, because those taxes were more than zero, and therefore America was a socialist hellhole, and all our “productive” people took their talent to other countries and left us to languish. Remember that? How the tax rates were so high that business owners said, “screw it, I’ll keep the money in the business,” and therefore they hired more people. No, the real way to get jobs is to cut rich people taxes to nothing, so they put all their extra money into foreign banks and foreign factories.

    Oh, and also, the Republican way of adding jobs is by destroying thousands and thousands and thousands of jobs. And get government storm troopers inside every uterus in the country.

    “…you know education is vital to keeping your country competitive…”

    A friend of mine once bought a house from a derelict, who had no money for utilities. He was keeping himself warm by pulling the studs out of the wall and burning them in the fireplace. He must have been a Republican. What’s their mantra? ‘Burn the Future’?

  8. How can the schools “deficit spend”, PB – when they have no power to raise funds?

    More proof NZT does not know what he’s talking about since schools most definitely do have the power to raise funds. It’s called ballot initiatives. Happens all the time. Sometimes 3 and 4 times in a single year for the same school district.

  9. More proof NZT does not know what he’s talking about since schools most definitely do have the power to raise funds.

    Wow – really? So schools can force you to pay taxes directly to them?

    It’s called ballot initiatives.

    Oh – you mean commisions, private groups or state legislature can ask people to vote on an appropriation, which is a totally different thing from a totally different group.

    Moron.

  10. Wow – really? So schools can force you to pay taxes directly to them?

    I wouldn’t expect someone who believes in a Jeffersonian Constitution to understand federalism very much, but yes — in certain states, schools can force you to pay taxes directly to them. One of them, as a matter of fact, happens to be my neighboring state — and Dana’s and Hoagie’s home state.

    Oops.

  11. Well, let’s hope Chryslers aren’t built by Detroit Public School products. They’ll fall apart faster than Yugos, which were built by another Communist enclave, the defunct Yugoslavia.

    Having owned a Chrysler product I can attest to that.

  12. The history corruption in the Detroit School District and its until very recently, clownish and complicit supervision, is so well documented that things have come to this pass should surprise no one who has paid any attention to American public school systems.

    From petty corruption

    to mind boggling indifference

    Book Depository Building

    it’s just standard operating procedure…

    http://www.publicbroadcasting.net/michigan/news.newsmain/article/1/0/1513503/Michigan.News/DPS.Auditors.Uncover.Sloppy.Bookkeeping..Missing.Money

  13. I wouldn’t expect someone who believes in a Jeffersonian Constitution to understand federalism very much, but yes — in certain states, schools can force you to pay taxes directly to them

    Really? Let’s look at your link

    The state of Pennsylvania does not levy or collect taxes on real estate or personal property. Instead, those taxes are reserved for the local governments – counties, municipalities and school districts. In most areas of Pennsylvania all three groups will levy real estate or property taxes – with rates differing depending upon the county, school district and municipality in which you live.

    Well, it states that local government at the school level can set taxes rather than schools themselves. But from what I can see, these are set by school boards, so I’ll allow you the confusion.

    But I suppose it makes sense for the USA. If schools are supported by the local surrounding community only, then the poor can be locked into underfunded schools and it becomes that much more difficult for them to succeed.

  14. And here’s where the US is going:

    SCHAUMBURG, IL—The Museum of the Middle Class, featuring historical and anthropological exhibits addressing the socioeconomic category that once existed between the upper and lower classes, opened to the public Monday.

    “The splendid and intriguing middle class may be gone, but it will never be forgotten,” said Harold Greeley, curator of the exhibit titled “Where The Streets Had Trees’ Names.” “From their weekend barbecues at homes with backyards to their outdated belief in social mobility, the middle class will forever be remembered as an important part of American history.”

  15. Does anyone do a little fact checking before spouting off? In Michigan every school is required to post both it’s budget and collective bargaining agreement on line. Detroit recieves just over $15,000 per student per year. If classroom sizes were 60 that would mean $900,000 per class taught. Since only $115,000 of that goes to the teachers pay and other compensation (it’s on the Schhols own web site) Where would the other 785,000 go?

    God I hate people that opinion-ate/vote/point finger, when it’s so easy to check with reality first.

  16. Since only $115,000 of that goes to the teachers pay and other compensation (it’s on the Schhols own web site)

    So, a Detroit teacher gets 115,000 in pay and benefits per year and still can’t educate the children? That teacher gets paid too much to start with, and definitely too much for the lack of quality that teacher puts out.

  17. “But I suppose it makes sense for the USA. If schools are supported by the local surrounding community only, then the poor can be locked into underfunded schools and it becomes that much more difficult for them to succeed.”

    Exactly, PiaToR! Having witnessed DNW’s rhetoric for some time now, one would hardly expect him to understand these outcomes of dire poverty, now would one?

    “So, a Detroit teacher gets 115,000 in pay and benefits per year and still can’t educate the children? That teacher gets paid too much to start with, and definitely too much for the lack of quality that teacher puts out.”

    “… and still can’t educate children?” And your evidence for this statement is what exactly, John H? Do you think the test scores you referenced tell the whole story? Why yes, you do, thus you are one very ignorant dude. This disparity between test scores of minority children in poverty and more affluent majority children is very well known, especially to teachers who face this disparity day in and day out. Ask one some day!

  18. In the Fall of 2008, DPS enrollment in K-12 was 94,054 – more than 70,000 students fewer than in the Fall of 2000 (166,887). District demographers project a further decline of 10.7 percent (10,277 students) by the Fall of 2009, reducing enrollment to 83,777 students – roughly half of 2000 levels.

    While regional economic decline has contributed to this trend, the drop in DPS enrollment far exceeds the decline in City population. In large numbers, DPS students are choosing to leave the system to attend charter schools, private schools, and open enrollment public schools in neighboring communities because of an erosion of confidence in the quality of a DPS education. Throughout the decade, the decisions made to invest more in the status quo than in children have contributed to the District?s downward spiral. [page 7]

    Reading for comprehension is a wonderful thing, Perry. You should try it some time.

  19. I will note Perry’s redirect shows a couple other things: Perry has no problem with teachers getting 115,000 a year in pay and benefits, fully funded by the taxpayers, most of whom do not get compensated so richly, AND, Perry said in effect “poor black kids is stupid, rich white kids is smart.”

  20. Yeesh. Hey Perry — you REALLY believe that tossing more money will improve such schools?? Have you ever read about the Kansas City experiment? Or closer to home, looked at academic achievement before, during, and after deseg. in New Castle County? And you have the gall to call someone else “ignorant?” Why yes, yes you do.

    Moron.

  21. John, we know Perry really “cares” about poor black kids because he quickly moved back to his old neighborhood when he was of age. Oh, wait …

  22. So, a Detroit teacher gets 115,000 in pay and benefits per year and still can’t educate the children? That teacher gets paid too much to start with, and definitely too much for the lack of quality that teacher puts out.

    Interesting. So you believe that doubling class numbers to 60 is a quality-improvement measure?

    Nah, come out and admit it, PB – they’re poor, and they’re… urban… so you don’t give a shit whether thay have any chance of a decent education. Being poor and… urban… they deserve to rot in poverty from generation to generation. Except that you’d happily pay for them to go to jail.

  23. “I will note Perry’s redirect shows a couple other things: Perry has no problem with teachers getting 115,000 a year in pay and benefits, fully funded by the taxpayers, most of whom do not get compensated so richly, AND, Perry said in effect “poor black kids is stupid, rich white kids is smart.””

    I note that John continues to make stuff up, as usual!

  24. Perry, if you cannot say that teachers getting 115k a year is too much, then you don’t have a problem with teachers getting 115k a year on the backs of taxpayers who do not.

    So where have you said that teachers getting 115k a year is too much? Put your money where your big fat mouth is, Perry.

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