Memo 1141, June 2016

In Brief

• Over the most recent 25-year period since 1990, Detroit’s population dropped 34 percent, but Detroit Public School’s (DPS’s) enrollment fell 73 percent.  Over the same period, state policymakers enacted new laws that made it easier for students to move to a neighboring school district (inter-district choice), but also created a new type of public school (charter schools) to compete for students.
• The Detroit education market continues to shrink on the whole and almost all of the total enrollment decline is coming out of the DPS market share of total enrollment.
• The recently crafted reform package to deal with DPS’s legacy debts and governance issues is likely to stabilize the district’s financial situation, at least in the near term, which may reduce some of instability that has contributed to enrollment declines.
• The changes in Detroit public school enrollment have affected the enrollment composition in nearly all the schools that educate Detroit children, and this is most apparent in the number and share of special education students attending certain schools, most notably DPS.
• For the current school year, nearly one out of every five DPS students (18 percent) has an Individualized Education Program (IEP), qualifying him or her to receive some amount of special education services.
  Compared to the statewide average, DPS enrolls proportionately more children with disabilities.  DPS’s special education enrollment is more than twice the size of the total special education population in all surrounding traditional districts combined.
• Under Michigan’s model, district general funds serve as the “funder of last resort.”  This means after all dedicated funding is exhausted, general fund dollars must be used to fulfill the financing responsibilities for approved costs.
• DPS’s per-pupil general fund subsidy was 53 percent larger than the average subsidy of all the other traditional public school districts and charter schools in the Wayne RESA district.
• The fact that other district’s face the same challenge suggests that DPS is burdened by two challenges; 1) the general structure and operation of the special education financing system, and 2) its large special education population.  For DPS, the combination of these two challenges is exacerbated by the fact that its overall enrollment has been falling precipitously over the last 10 years.  This enrollment decline has resulted in fewer general fund dollars and a greater share of these resources having to go towards meeting special education spending mandates.