Jack Lessenberry at The Blade has a few choice words about the inability of Michigan lawmakers to agree on a solution to save the Detroit Public Schools.
Detroit Public Schools are now on course to run out of cash long before the school year ends. If that happens, bankruptcy seems likely. Bankruptcy saved General Motors, and more than likely “saved” the city of Detroit … at least temporarily.
For Detroit is like a patient that has survived major surgery, and is still in intensive care. The city is solvent for now — but an economic downturn or a shift in state finances could swiftly change that.
All agree that the city needs jobs and revenue, and a way to reverse the decades-long population decline.
But those things will be hard or impossible to do without a decent school system. The population has been voting with its feet. As recently as the year 2000, there were still about 170,000 students in Detroit Public Schools. Today, that number is a mere 47,000.
Since the mainstay of school funding is the state’s $7,391 per pupil annual “foundation grant,” that has been a crippling blow.
Darnell Earley, the schools’ latest emergency manager, says that thanks to reforms, the schools would have run a $13 million surplus this year. But the schools are paying $53 million a year to service their $515 million debt, accumulated over decades.
That was more than enough to tip the balance into the red. It is hard to see, if present conditions continue, how the district can reverse that before it becomes insolvent.
But if bankruptcy was a way out for GM and the city itself, it would be a different story for the public schools.
Bankruptcy would, the emergency manager told the Michigan House Subcommittee on School Aid in October, “predominantly shift liabilities onto other municipalities.” That’s no small matter.
Those liabilities include more than a billion dollars in pensions and nearly $1.5 billion in capital bonds, plus the operating debt. Not only that, something would have to be done with the students.