Dissolved School District Repeatedly Overspent Despite Deficits

Dems blame Gov. Snyder, but Inkster approved 14 percent raises and paid 100 percent of health insurance

When it comes to why Inkster Public Schools was dissolved, there has been plenty of finger pointing among politicians and school administrators.

In a 2012 deficit elimination plan it submitted to the state, Inkster school officials blamed part of the fiscal debt on a previous emergency financial manager who had been gone for seven years and had left the district debt-free.

Recently, some Democratic lawmakers have blamed Gov. Rick Snyder for Inkster's woes with one state representative saying the school board had to clean up "the mess he (Gov. Snyder) made," and another saying Inkster was part of a larger "epidemic" public schools were facing.

But the most recent teacher's contract sheds some light on the problems the district had handling its own costs.

In August 2009, Inkster was in its third consecutive year of a growing budget deficit that had escalated from $1.9 million two years previous to $10 million at the end of the 2008-09 fiscal year. Still, the school board approved a three-year deal with teachers that included some raises as high as 14.2 percent as well as the district paying 100 percent of the health care premiums for teachers and 100 percent of the deductible.

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The contract also paid teachers $2,600 if they waived their health insurance coverage for a year. And if that employee were to re-enroll for the district's health insurance "due to a substantial life event" they didn’t have to return the $2,600.

Meanwhile, Inkster's per-pupil, general fund revenues (including local, state and federal dollars) had increased 9 percent from $9,177 in 2008-09 when the previous contract had expired to $10,004 when the new three-year deal expired in 2011-12. Enrollment dropped from 3,246 when the contract was signed to 2,660 when it expired. Inkster’s deficit increased to $12.7 million in 2012.

"This is just another example of school boards putting the adults ahead of the kids," said Rep. Pete Lund, R-Shelby Township, in an email. "When people are looking for who to blame for the Inkster schools, I hope they closely look at these contracts and the roles they played in the financial downfall of this district."

Rep. David Knezek, D-Dearborn Heights, called Inkster's problems part of an "epidemic" in Michigan schools, according to an article on MLive. 

"According to the Michigan Department of Education, there are currently 163 school districts in Michigan that fall within three different scenarios: they ended the year with a greater deficit than when they began; they ended the year with a deficit after beginning with a balanced or surplus budget; or they have less than a 5 percent operating fund balance," Rep. Knezek said in an email. "When almost 30 percent of the school districts in Michigan are near or within a situation of financial insolvency, it's more than just an issue of  'mismanagement.' Decreased enrollment due to the proliferation of online and charter schools, coupled with a $2 billion cut to public education in the last two years has done little to help our public schools make ends meet."

The School Aid budget was not cut $2 billion over the past two years. It decreased from $12.98 billion in 2010-11 to $12.75 billion in 2011-12, a reduction of about $235 million. In 2013-14, the state is expected to spend $13.37 billion on the School Aid budget. At the same time, Michigan public schools are serving fewer students, down 2.5 percent since 2011. 

Sen. Hoon-Yung Hopgood, D-Taylor, criticized Gov. Snyder for not attending a meeting regarding the dissolution of the district and said in a press release: "Instead of attending the meeting, as he was invited to do, the governor is nowhere in sight as he leaves the school board to clean up the mess he made, and answer to the parents and community who are understandably upset about this dissolution."

Sen. Hopgood didn't respond to a request for comment.

School district mismanagement should not be used as an excuse for more funding, said Audrey Spalding, director of education policy at the Mackinac Center for Public Policy.

"Several Michigan school boards are making the ill-advised decision to spend down their operating fund balances instead of making tough choices that are in the students' best interest," Spalding said. "Inkster's contract is an example of the financial danger a school district can put itself in."


See also:

Inkster Schools Wrongly Blames Previous Emergency Manager For Its Deficit

Teacher Union President Continues Misrepresentation of School Aid Facts

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Detroit Prep is a top-rated and economically and racially diverse charter school in the city. It's growth means it needs to move out from a church basement and into a new location. Nearby is a former Detroit Public Schools building, sitting empty for years. But, worried about competition, the public school district refused to sell. For years, district and local government officials in Detroit had worked to block public charter schools. They pushed legislation at the Michigan Capitol to hinder them, refused to sell to them, transferred surplus buildings from the district to the city government and imposed deed restrictions on property sales to private developers. All of it was aimed to hinder or even prevent charter school choice outside the confines of the Detroit school district.

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