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March 5, 2020

Take Responsibility for Financially Distressed Schools; Don’t Takeover

This op-ed appeared in the Detroit News on Thursday, March 5.

“The cavalry is not coming.”  Those were the words of Flint Community Schools Superintendent Derrick Lopez in a recent editorial urging the district’s board, teachers, and families, as well as the broader community, to come together to tackle the staggering financial  problems facing the district; $5.7 million structural budget deficit and over $25 million in accumulated operating debts. The cavalry he was referring to – Michigan’s state government – has taken a hands-off approach and avoided any type of direct intervention in the district’s financial affairs.

Unfortunately, school districts like Flint are stuck between a rock and a hard place created by state policies. First, the district is hamstrung by a state funding model that ties operating revenues to student enrollment. School leaders have been unable and, at times, unwilling to reduce spending to keep pace with the yearly revenue losses that accompanied Flint’s massive student exodus. Second, when years of declining funds and challenging local circumstances turn into a structural deficit, all that the State of Michigan offers is hands-off state oversight or the punishing embrace of emergency management.

The schools in Flint are particularly vulnerable to financial stress due to ongoing impacts of the water crisis. Nearly a quarter of Flint’s students currently require special education services, up from 15 percent before the water crisis and way above the statewide average of 13 percent. Local districts bear the majority of costs for special education, and districts like Flint face steeply growing unfunded costs when the share of special education enrollment rises. But, special education is just one example of how Michigan’s existing school funding system is broken.

Michigan’s school funding system under Proposal A–an initiative adopted in 1994 that put the state in control of school funding–fails to provide the resources sufficient to meet the unique learning needs of students. Low-income students and those at-risk of academic failure are not supported with sufficient funding. Lansing took incremental steps in last year’s state budget to move towards a weighted-student funding formula focused more on equitable funding rather than treating every student the same, but these steps do not address deficits built on many years of revenue shortfalls.

Meanwhile, when a school district or local government faces severe operating debts, the emergency manager policy is Michigan’s primary tool for responding. But, after the disastrous role of the state government and emergency managers in the Flint water crisis, it’s probably a good thing that the state is staying away from the city’s schools.

As a policy intervention, emergency management and state takeover also proved to be a failure for Detroit Public Schools. For the better part of a decade, emergency management did nothing to help address Detroit’s finances or student achievement. In fact, state takeover made the district’s problems worse as each successive receiver relied on the same basic playbook – slash educational programs, close schools and sell assets, denigrate teachers, and issue long-term debt to balance the books.

These actions caused more and more families to flee the district for charters and suburban schools, creating a vicious cycle of shrinking financial resources followed by more closures and cuts. It took a massive lift by the state legislature in 2016 to undo some of the damage caused by years of failed state policy; $617 million state-financed rescue to settle debts and return control to a locally-elected board.

These financial problems were not unique to Detroit. Attention turned to Benton Harbor Area Schools last spring and now comes Flint Community Schools. But, without an effective comprehensive state-level policy and little interest, at least for the moment, to develop one, these two majority African American districts are left to go it alone. In addition to Flint and Benton Harbor, six districts and two charter schools are required to report deficit elimination plans to the Michigan Department of Treasury. Seven more have been designated “potential fiscal stress” schools.

It does not have to be this way. The emergency manager policy is ripe for repeal, and Proposal A is long overdue for an update. As a candidate, Governor Whitmer supported doing away with the emergency manager law. As governor, Whitmer should work towards a solution, rather than allowing the state to turn its back on struggling school districts.

Sarah Reckhow, Associate Professor of Political Science, Michigan State University

Craig Thiel, Citizens Research Council of Michigan

Take Responsibility for Financially Distressed Schools; Don’t Takeover

This op-ed appeared in the Detroit News on Thursday, March 5.

“The cavalry is not coming.”  Those were the words of Flint Community Schools Superintendent Derrick Lopez in a recent editorial urging the district’s board, teachers, and families, as well as the broader community, to come together to tackle the staggering financial  problems facing the district; $5.7 million structural budget deficit and over $25 million in accumulated operating debts. The cavalry he was referring to – Michigan’s state government – has taken a hands-off approach and avoided any type of direct intervention in the district’s financial affairs.

Unfortunately, school districts like Flint are stuck between a rock and a hard place created by state policies. First, the district is hamstrung by a state funding model that ties operating revenues to student enrollment. School leaders have been unable and, at times, unwilling to reduce spending to keep pace with the yearly revenue losses that accompanied Flint’s massive student exodus. Second, when years of declining funds and challenging local circumstances turn into a structural deficit, all that the State of Michigan offers is hands-off state oversight or the punishing embrace of emergency management.

The schools in Flint are particularly vulnerable to financial stress due to ongoing impacts of the water crisis. Nearly a quarter of Flint’s students currently require special education services, up from 15 percent before the water crisis and way above the statewide average of 13 percent. Local districts bear the majority of costs for special education, and districts like Flint face steeply growing unfunded costs when the share of special education enrollment rises. But, special education is just one example of how Michigan’s existing school funding system is broken.

Michigan’s school funding system under Proposal A–an initiative adopted in 1994 that put the state in control of school funding–fails to provide the resources sufficient to meet the unique learning needs of students. Low-income students and those at-risk of academic failure are not supported with sufficient funding. Lansing took incremental steps in last year’s state budget to move towards a weighted-student funding formula focused more on equitable funding rather than treating every student the same, but these steps do not address deficits built on many years of revenue shortfalls.

Meanwhile, when a school district or local government faces severe operating debts, the emergency manager policy is Michigan’s primary tool for responding. But, after the disastrous role of the state government and emergency managers in the Flint water crisis, it’s probably a good thing that the state is staying away from the city’s schools.

As a policy intervention, emergency management and state takeover also proved to be a failure for Detroit Public Schools. For the better part of a decade, emergency management did nothing to help address Detroit’s finances or student achievement. In fact, state takeover made the district’s problems worse as each successive receiver relied on the same basic playbook – slash educational programs, close schools and sell assets, denigrate teachers, and issue long-term debt to balance the books.

These actions caused more and more families to flee the district for charters and suburban schools, creating a vicious cycle of shrinking financial resources followed by more closures and cuts. It took a massive lift by the state legislature in 2016 to undo some of the damage caused by years of failed state policy; $617 million state-financed rescue to settle debts and return control to a locally-elected board.

These financial problems were not unique to Detroit. Attention turned to Benton Harbor Area Schools last spring and now comes Flint Community Schools. But, without an effective comprehensive state-level policy and little interest, at least for the moment, to develop one, these two majority African American districts are left to go it alone. In addition to Flint and Benton Harbor, six districts and two charter schools are required to report deficit elimination plans to the Michigan Department of Treasury. Seven more have been designated “potential fiscal stress” schools.

It does not have to be this way. The emergency manager policy is ripe for repeal, and Proposal A is long overdue for an update. As a candidate, Governor Whitmer supported doing away with the emergency manager law. As governor, Whitmer should work towards a solution, rather than allowing the state to turn its back on struggling school districts.

Sarah Reckhow, Associate Professor of Political Science, Michigan State University

Craig Thiel, Citizens Research Council of Michigan

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