Record 55 school districts in Michigan facing deficits
By Kathleen Gray Detroit Free Press Lansing Bureau
LANSING—With a record number of school districts in the state facing budget deficits, lawmakers and education officials are now talking about the need to dissolve shrinking and debt-ridden districts to manage the problem.
“There is an inevitably to districts like Buena Vista having kids not in school,” said state Superintendent Michael Flanagan after a presentation Thursday to House and Senate lawmakers. “So forget who’s to blame, we’ve got to get ahead of this train here, and there is some role for dissolution in that.”
It’s not just urban school districts, such as Detroit, Ecorse and Pontiac, that are operating with crippling deficits, Flanagan said. Fifty-five districts, including Mt. Clem-ens, Brighton, Pinckney and White Cloud, are spending more money than they’re taking in.
The districts in deficit — including 25 in Wayne, Oakland and Macomb counties — span the state and are in four categories : 10 districts that are expected to emerge from deficit spending by June 30; 23 districts that will begin their fiscal year with a smaller deficit; 16 districts that will end the year with a bigger deficit and six districts that started the year with a positive fund balance but will end the year with a deficit.
It’s the largest number of deficit-ridden schools the state has seen, Flanagan said.
“There are many reasons,” he said. “Some may have experienced an enrollment decline over the summer, or maybe you don’t have a good financial person. Sometimes there are boards that don’t want to make the tough decisions.”
He told legislators on a joint House and Senate Appropriations subcommittee that if he had his way, there would be countywide school districts, and he would have the authority to dissolve districts that clearly were not emerging from deficit.
Such is the case in the Buena Vista school district, which temporarily closed its doors in May because it had run out of money.
State Reps. David Rutledge, R-Ypsilanti, and Bill Rogers, R-Brighton, agree that more drastic action needs to be taken. They introduced legislation last week that would allow the state superintendent and the Michigan Department of Treasury to take over insolvent school districts and work with the intermediate school district in that county or other surrounding districts to quickly provide education for the students.
“I’d be willing to accept more authority, although I don’t necessarily want a bigger target on my back,” Flanagan said.
He pointed to the Pontiac school district, which has a deficit of $29.9 million. On Thursday, the Local Emergency Financial Assistance Loan Board formally found “probable financial stress” exists in the district. The declaration is the next step toward the possible appointment of an emergency manager, a consent agreement, a neutral evaluation process or Chapter 9 bankruptcy.
The state also is doing such a review for the Buena Vista schools.
While the record 55 districts sounds dire, Flanagan pointed out that there are more than 800 locally controlled public and charter schools.
“If I were to put my educator hat on, I’d say we need more resources,” he said. “But with my superintendent hat on, I have to put districts’ feet to the fire.”
Gov. Rick Snyder said that many schools haven’t done a very good job of planning for shrinking enrollments. He pointed to the Ann Arbor Public Schools, which opened another high school a few years ago despite declining enrollment, and was recently forced to eliminate busing in the district.
State Sen. John Pappageorge, R-Troy, told Flanagan to develop a proposal and give it to the Legislature.
“The world is full of critics and we need playwrights,” he said. “Why don’t you give us a county system to look at? We’re not capable or have the staff to do something like that. I would welcome you guys telling me what laws and what procedures we have to change.”
Contact Kathleen Gray: 517-372-8661 or kgray99@freepress.com . Staff writer Paul Egan contributed to this report.
SCHOOL DISTRICT DEFICITS IN METRO DETROIT BY JUNE 30
MACOMB COUNTY East Detroit: $6,003,332 Clintondale: $3,680,777 Mt. Clemens: $3,902,649 New Haven: $112,200 Van Dyke: $1,772,347 South Lake: $1,659,151
OAKLAND COUNTY Pontiac: $29,985,602 Avondale: $1,113,517 Oak Park: $3,559,830 Hazel Park: $3,412,853
WAYNE COUNTY Detroit: $72,283,849 Hamtramck: $2,737,485 Highland Park: $6,613,491 Redford Union: $3,296,436 River Rouge: $1,519,859 Westwood: $6,142,198 Ecorse: $1,463,341 Northpointe Academy: $2,777 Dearborn Heights: $1,401,027 Inkster: $15,851,791 Taylor: $9,335,086 Southgate: $4,914,868 Heart Academy: $337,769 Romulus: $806,704 Aisha Shule/DuBois Preparatory Academy: TBD
Source: Michigan Department of Education
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