Detroit Schools Betting The Post-Bailout Future On Enrollment Turnaround
It hasn’t happened yet, but district is spending for success
An increase in hiring, accompanied by liberal distribution of raises and bonuses to veteran employees, may put the Detroit public school district at risk at going back into deficit. In taking these steps, the district is making a bet that it can turn around its decades-long enrollment decline and grow its total revenue by attracting more students.
The Detroit Public Schools Community District grew its payroll by 488 full-time jobs in 2018-19, despite an enrollment drop of 699 students. The district also gave 3% raises to its teachers and officials, according to salary data received in a Freedom of Information Act request.
Adding jobs and giving raises while enrollment trends down has been a recipe for Michigan school districts not having enough annual revenue to pay their expenses.
But the Detroit district’s managers are confident they are on the right path, according to spokeswoman Chrystal Wilson.
“We have no concerns regarding the solvency of DPSCD [Detroit Public Schools Community District] or the future financial status of the new district,” Wilson said in an email. “We have adopted three consecutive balanced budgets and implemented two. We do not practice in deficit spending. We have less than 70 teacher vacancies while adding hundreds of new teacher positions and raising teacher salaries. All of our vacant teacher positions are fully funded within our balanced budget. Our budget will be continue to be balanced under the Legislature’s proposed budget, if adopted.”
Over the past two years, the Detroit school district has added over 500 full-time teachers, according to state data. The district had 3,021.80 full-time teaching positions in 2016-17, a number which increased to 3,506.70 in 2018-19. The total number of full-time jobs at the district increased from 6,643.80 in 2017-18 to 7,131.82 in 2018-19. During that same period, enrollment declined from 50,875 to 50,176.
Wilson said, “Our enrollment increased considerably after EAA schools returned to the district.”
With that one-time transfer, the Detroit district saw its enrollment rise from 45,720 in 2016-17 to 50,875 in 2017-18, for an additional 5,155 students. The 11 schools came back under the district’s management after several years in a form of state receivership, adding 5,227 students.
But those 11 former EAA schools had enrolled a total of 9,707 students when they were removed from the district’s management in 2012. When the district took them over again six years later, they enrolled 4,448 fewer students.
The possibility of the Detroit Public Schools Community District falling back into annual budget deficits because of overspending was brought to public attention in May 2017 by Romaneir Johnson.
Johnson was then the executive director of the Detroit Financial Review Commission, which had been set up to review the district’s finances after a state-funded bailout.
Johnson said then that the district would have been in deficit that year if it had filled 300 teacher positions, wasn’t still getting $10 million from the sale of school property, and didn’t still have access to $15.7 million left from the $617 million bailout of 2016.
The $150 million that the new district received from the bailout has been spent.
Wilson said officials were proud of their plan to pump more money into the school district.
“We are proud of the fact that we have hired more full time staff instead of contractors to provide IT services, security, and budget operations,” Wilson said. “This included contracts for art, music, and behavior support at schools. The philosophy of Emergency Management was to disinvest in people and internal processes and instead rely on contracts and contractors in the name of efficiency. Meanwhile, district office and school level staff, including partners, complained about the lack of customer service, accountability, and efficiency. Our philosophy is that fully employed individuals serve children and families and the people who support them more effectively than contractors who lack accountability and ownership of their work. We have reduced contracted services by $20M and converted those funds to expanding school programming and to hire full time personnel to implement the reform linked to the Strategic Plan. Additional full time employees come in the form of district administrators in IT, budget; deans of discipline; full time guidance counselors, social workers, art, music, and PE teachers; and security guards. All of our customer service data point to an improvement due to this shift. More importantly, student achievement is on the rise for the first time in years.”
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.