Detroit Schools’ Annual Budget Balanced With Emergency Bailout Money

$10M in so-called state transition-cost dollars helping keep the district out of deficit

For years, Detroit’s public school district overspent and sat in debt. However, Detroit’s reconstituted public school district is projected to have a small surplus in fiscal year 2018, according to a biannual report released by a state financial overview commission.

According to the most recent report from an oversight body within the state Treasury Department, the Detroit school district expects to have a general fund surplus of about $4.3 million at the end of the fiscal year ending on June 30, 2018. This in a budget that projects spending $705.9 million for the year.

Part of revenue paying for that is $9.6 million from $25 million the district was given in 2016 for transition costs.

The report from the financial review commission estimates there will be $5 million in transition funds left by the start of fiscal year 2020. If the district spends those funds at the same rate as it has done in past fiscal years, the emergency money will be gone by the end of that year.

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In June 2016, the Legislature approved giving the district $617 million, wiping away its debt. The transition cost money was part of that arrangement.

One-time asset sales are another revenue source in the commission’s projection that the district will finish the year with a $4.3 million surplus in its general fund surplus.

The district is having trouble filling vacant teaching positions. In the middle of September, The Detroit News reported the district had 194 teaching vacancies in general and special education positions. Substitute teachers are filling in while the search for full-time teachers continues.

According to the Detroit schools spokesperson Chrystal Wilson, the district still has unfilled positions, but it has the revenue to fund all vacant teaching positions.

In its first fiscal year, the reconstituted district had to leave 300 vacant positions unfilled, sell $10 million in property and use a one-time transfer of $15.7 from the old district to avoid running a deficit.

“We have a strong fund balance and enrollment increased for the first time since 2002-03,” Wilson said in a statement to Michigan Capitol Confidential.

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