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Detroit bankruptcy weighs on already struggling schools

Schools facing extreme drops in enrollment, multi-million dollar budget deficit

Jack Martin took the helm of Detroit Public Schools in July as the district’s new emergency manager, with goals of getting the academically and financially troubled district back on track. Three days after his appointment, Detroit filed for bankruptcy.

It is the largest municipal bankruptcy in U.S. history, with roots in the decline of the auto industry and racial tensions that drove residents out to the suburbs.

The city’s financial state will not directly impact the school district because the two have separate budgets, says Glenda Rader, assistant director of the Michigan Department of Education’s state aid and school finance office. However, the schools were already dealing with extreme drops in enrollment, a problem that could get worse if the bankruptcy declaration leads more people to leave the city.

The district also is struggling with a multi-million dollar budget deficit, due in part to high payroll, high pension costs and mismanaged funds. And Detroit’s population drain not only lowered school enrollment, but also reduced the tax base the district depended on for funding.

Martin is the district’s third emergency manager since the state took it over in 2009. He most recently served as Detroit’s chief financial officer. Previous emergency manager Roy Roberts reduced the district’s deficit of $327 million by $251 million, and increased graduation rates by 5 percent, according to the district. But there is still a long way to go toward financial stability, says Elizabeth Moje, associate dean for research and community engagement at the University of Michigan School of Education.

“The district is facing continuous drops in enrollment because people are leaving the city or taking their children out of the district,” Moje says. “With issues of budget and enrollment comes the challenge of maintaining quality.”

The city’s economic collapse resulted in a population loss of over a quarter of a million people between 2000 and 2010. That drop, and the increasing popularity of charter schools, has led to major decreases in public school enrollment, Moje says.

About half of Detroit’s schools have closed in the past three years, yet there are still 28,000 unfilled seats in the district’s classrooms. Enrollment has fallen to 50,000 students, compared to 150,000 a decade ago. Enrollment is projected to drop to just 40,000 students by 2016, according to the AP.

As of 2011, 41 percent of Detroit’s school-aged children were attending charter schools. The city ranks second nationally, behind New Orleans, for the highest percentage of charter students, according to a report from the National Alliance for Public Charter Schools.

Charter enrollment has increased five times since the first Michigan charter school opened in the mid-1990s. Today, more than 130,000 children attend 277 charter schools throughout Michigan.

The day he took office, Martin said that increasing enrollment will be a major focus during his time as emergency manager, according to published accounts. He said he plans to do this by increasing school safety and enhancing the quality of academic programs.

“Bankruptcy doesn’t bode well for a community’s health—the fewer people interested in coming to the city or the more people who leave the city have an indirect impact on the school district and enrollment drops,” Moje says.

Martin also plans to increase school safety, upgrade technology equipment, and expand preK in the district. Moje says Martin has also stated that he wants to partner with local universities, which have a vested interest in supporting education in the city. “It’s challenging, and it will be hard work for everyone involved,” she adds. “But it can be very exciting work—a chance to renew and move forward.”