News Story

Detroit Education Overhaul Would Cost Other Schools $50 Per Student

Proponents say 'not a bailout,' but other districts not keen on chipping in

Gov. Rick Snyder says his vision of the new Detroit public school system does not represent a bailout because it doesn’t ask for more taxpayer dollars. But one study says that school districts around the state will have to chip in $50 per pupil, which some superintendents aren’t happy about.

Snyder has proposed creating a new “Detroit Education District” to operate all public schools in the city. Alongside of this entity, the current Detroit school district would be retained in a purely administrative role for the purpose of paying off the massive debt it has accumulated.

Money to service the debt would come from $72 million in annual city property tax millage revenue the district now collects. Since that money would no longer be available to operate the schools, the state would have to pick up the difference.

The governor says this would not be a bailout because no extra taxpayer dollars would be requested. However, the extra funding must come from somewhere, and apparently that means the state's other 544 school districts.

The administration addressed the bailout issue in a Frequently Asked Questions feature posted on a state website. It explains that the money to run Detroit's schools would come from the $11.5 billion in taxpayer revenue that flows into the state School Aid Fund. Along with local property tax revenue, this fund covers the annual expense of operating the state's K-12 schools.

The Citizens Research Council estimates that if taxes are not raised, every other school district in the state would have to take a $50 per-pupil cut to make up for the additional revenue going to Detroit.

That doesn’t sit well with some K-12 public school superintendents, who say that given the level of their district’s per-pupil foundation allowance, which pays for general operations, they're strapped.

“Not good news,” said Midland Public Schools Superintendent Michael Sharrow in an email. “Seems as if some districts are being punished to benefit others.”

Clarkston Community Schools Superintendent Rod Rock said Snyder’s plan equates to a $400,000 per year loss to his district.

“It is unreasonable for our students, and the students in other districts across our great state, to assume the burden of Detroit's debt,” Rock said in an email. “The process suggested by the governor is currently enacted in a few other Michigan school districts. This means that all Michigan districts already lose funding for the debts of these districts. A further erosion will increase class sizes and reduce programs for all kids. The children of Detroit require an excellent education. And so does every other child in Michigan. This proposal detracts from every child's education.”

Audrey Spalding, the education policy director for the Mackinac Center for Public Policy, said Snyder’s proposal didn’t appear to ask for a tax increase.

“There is no tax increase, but every other school district in the state will be bailing out DPS,” Spalding said. “This plan doesn’t do anything to assure that DPS won’t come back to state taxpayers again for more money.”

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.