Magazine article District Administration

Detroit Bankruptcy Weighs on Already Struggling Schools

Magazine article District Administration

Detroit Bankruptcy Weighs on Already Struggling Schools

Article excerpt

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 forces 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 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 Mole, associate dean for research and community engagement at the University of Michigan School of Education. …

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