Governor Proposes a Plan to Eliminate Detroit Schools' Debt Problems
Rick Snyder wants to split Detroit Public Schools in two to eliminate its crippling debt but at the expense of other districts across Michigan.
By Ann Zaniewski
Gov. Rick Snyder announced plans Thursday for a sweeping overhaul of Detroit's education system, including a proposal to split Detroit Public Schools in two as a way to eliminate its crippling debt but at the expense of other districts across Michigan.
One entity would become a brand-new public school district, run by a seven-member school board appointed by Snyder and Mayor Mike Duggan. The state would contribute $53 million to $72 million annually to support it.
"It's important to create a system of success for students in the City of Detroit," Snyder said, adding that the future of Detroit and the state are linked to having strong city schools. He said he did not see the plan as a bailout.
Initial reaction included some high-profile criticism, including from state lawmakers and about 250 DPS teachers who missed a day of school to take up picket signs at the state Capitol.
The proposal calls for each entity -- an "old" and "new" district -- to be overseen by its own school board and subjected to a financial review board, similar to what was used in Detroit's bankruptcy, until the debt is resolved.
Legislation would have to pass this fall so the split could take place by July 1, 2016. It is expected to be proposed this summer.
The plan aims to holistically address not only the persistent financial distress of DPS but also the generally poor academic performance of public schools across the city.
"We're just not seeing the results these students deserve," Snyder said at a news conference at the Cadillac Place state office building in Detroit.
Officials said the new public school district -- called the City of Detroit Education District -- would absorb students, teachers, buildings and labor contracts. The new school board would have four appointees coming from Snyder and three from Duggan.
The new board would gradually morph into an elected school board, with two new elected members coming in 2017, two more in 2019 and three in 2021.
The current elected, largely powerless school board would move to the old district. So would DPS's emergency manager, Darnell Earley.
The old district would exist to pay off the district's $483 million in operating debt, using an existing 18-mill non-homestead property tax millage and other revenue. The new district would focus on educating children and collect the per-pupil funding that the state gives all school districts.
The proposal also calls for creating a new Detroit Education Commission next January. It would have three members appointed by Snyder and two by Duggan.
"There would be a huge investment from the state to get this set up and operating, so I think the balance between the mayor and my role is appropriate," Snyder said.
The Detroit Education Commission would oversee certain aspects of all public schools, including charters, in the city, including a proposed common enrollment system to launch for the 2016-17 school year. Such systems typically involve processing all school applications -- both for traditional public schools and charter schools -- through a single entity.
Sndyer said the DEC would hire a Detroit education manager who would act like "air traffic control," making sure all schools comply with new uniform academic performance standards for which the Legislature would set some parameters.
He said he supports an A-F letter grading school rating system to replace the current color-coded rating system.
"Schools that aren't performing, those schools could be closed or otherwise reformed, and potentially replaced by other operators," Snyder said.
Later, he added: "It could be a charter potentially being closed, a new DPS school being closed, and they could be replaced by either one of those two choices. It's really who's going to put the best proposal together to give the best outcomes to the kids."
John Walsh, the governor's director of strategy, stressed that the new public school district would be a "brand-new, fully incorporated school district. It is not a charter district."
Walsh said splitting DPS in two would cost the state School Aid Fund $53 million to $72 million a year for at least seven to eight years to fund the new district, making up for the revenue from the 18-mill tax that would be diverted to the old district.
In turn, other school districts in Michigan could lose as much as $50 in funding per student, likely making the proposal a tough sell for state legislators.
"I expect I'll probably get some people yelling at me from all sides," Snyder said. "This is what happens when you take bold moves to do things to reinvent things."
State Rep. Tim Kelly, R-Saginaw Township, chairman of the House appropriations subcommittee on school aid, said Snyder's plan does nothing to address the core problem facing Detroit schools.
"We've dealt with this going on 20 years now and I don't think there's anything that's going to help Detroit that doesn't include a private option," he said. "This is about trying to solve a debt issue. This isn't about solving the problem of the lack of education in Detroit. This does nothing for students. It's all about adults and debt. We have to have a broader conversation."
Snyder said much of DPS's outstanding bonds are backed by state credit. He said his proposal would "set the framework for long-term success."
Speaker of the House Kevin Cotter, R-Mt. Pleasant, said he wants to solve the district's long-standing problems, but money should not be pulled out of the School Aid Fund for DPS.
"While there may be a need for some financial assistance, at first blush, I'm opposed to taking money out of the School Aid Fund because we're taking it away from every other district in the state," he said. The House is developing its own plan for DPS, Cotter said.
"You'll see something very soon. I've been working on this for some time now, but we haven't known what the governor's plan looks like," he said. Snyder's proposal comes on the heels of a widely publicized education plan released in March by a 36-member group called the Coalition for the Future of Detroit Schoolchildren.
The plans share some similarities, such as the push for common enrollment. But it also differs in some key areas, such as governance. The coalition said it strongly supports a return to local control.
"It's a terrible plan," said LaMar Lemmons, who is on the coalition and also a member of the DPS school board. "It shifts the burden of the plan for the debt on the backs of the Detroit taxpayers when it's the state that was totally responsible for the creation of the debt."
"(Snyder is) coming in as if he's saving Detroit Public Schools. The reality is he's been operating Detroit Public Schools for the last 4 1/2 years. It falls clearly on his shoulders."
The state has controlled DPS for much of the past 15 years. The district has been run by a state-appointed emergency manager since 2009. It was also under state control from 1999 until 2005.
Snyder said Earley, the district's fourth emergency manager, would remain in place until his current 18-month term ends next summer and help with the transition.
Earley said the governor's proposal would accelerate his efforts to create "a well-functioning, high-performing organization."
The proposal comes at an important time. Overall, students across all public school systems in Detroit -- DPS, charter schools and state reform schools -- are struggling academically, with proficiency rates that fall far below state averages. Competition is fierce for a diminishing number of students.
DPS has about 100 schools. There are also about 100 charter schools in the city as well as 15 former DPS schools that make up the Education Achievement Authority, a reform district for the state's worst-performing schools.
The proposal leaves some unanswered questions. Officials said the new school district would likely still carry some debt in the beginning of the transition, but they aren't sure yet how much. And they're trying to figure out how the EAA will fit into the system.
The 18-mill tax sunsets in 2022. In 2013, the most recent year for which data was available, the tax was slated to bring in $79.2 million, but $52.4 million was actually collected, according to David Szymanski, chief deputy treasurer Wayne County.
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