News Story

Detroit Schools Fiscal Decline Began Before Emergency Manager

Media narrative blames school district’s deficits on state, ignore its previous history

The debate over the state of Michigan’s management of the Detroit school district between 2009 and 2016 is back in the news, this time as an argument in a federal civil rights lawsuit before the Sixth Circuit Court of Appeals.

National news outlets, including NBC News and The New York Times have chimed in, but the events that led to the decision by then-Gov. Jennifer Granholm to appoint an emergency manager in January 2009 have been blurred.

Notably, media reports have ignored the fiscal and governance turmoil of the decade before those events. That’s when the Detroit school district’s finances collapsed in the face of plummeting enrollment, Michigan's one-state recession of the 2000s, and the nation's Great Recession of 2008-09.

The lawsuit claims the state failed Detroit children by letting the school district become “under-resourced.” Some media voices have repeated this narrative, but they have ignored the imploding district finances and enrollment that led to Granholm’s decision.

The enrollment decline is especially stark: In the 1999-2000 school year, 168,213 children attended class in a Detroit district school. By 2008-09, the number was down to 95,494. By 2016-2017, there were just 45,237 children enrolled in the Detroit school district, slightly more than a quarter of the number 15 years earlier.

As this was unfolding, in 2005, the elected local school board assumed management of the district, after a period during which it was under mayoral control. For the first two years, the new board was able to balance its books and avoid spending more than the revenue it collected.

That changed in 2007-08, when the Detroit school district incurred a $139.7 million operations deficit, according to the Michigan Department of Education. In 2008-09, the deficit grew to $218.9 million.

That’s when Granholm appointed an emergency financial manager halfway through the school year, effectively placing the district in a form of state receivership. By the end of that fiscal year, the district's deficit had ballooned to $327.3 million.

Media reports have left out that part of the story and timeline.

NBC News reported, “The state had taken control of Detroit’s main school district from the locally elected school board for much of the last two decades, while encouraging scores of new charter schools to open and siphon students away.”

University of Michigan lecturer Eli Savit wrote in The New York Times: “In the late 2000s, however, the state took direct control of the Detroit public schools. In so doing, it displaced Detroit’s elected Board of Education, as well as the local superintendent. In the decade that followed, the bottom fell out from under Detroit’s schools.”

In an email, Savit said, “My op-ed wasn't focused on who was responsible for the deficit — and I don’t dispute that the locally controlled district was running a deficit at the time the state took it over in 2009.”

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.