Things couldn't be looking worse for
Detroit's economy right now. Already, two of its automakers, General
Motors Corp. and Chrysler LLC, have filed for bankruptcy. Now its public school
system could be next to go under.
Detroit's
public school system, which consists of 194 schools that are responsible
for educating roughly 143,490 students, currently suffers from a $271.6
million funding gap because of seven years of overbudgeting, according to the district's 2010 budget. The DPS plans now plans to lay off 2,451 employees -- or roughly 17.7% of its workforce -- to fill the gap.
At
the same time, the school system may be as bankrupt educationally as it
is financially. The graduation rate of its students (58%) is well below
the national average (76%), and fewer than half of its schools meet
federal standards for Adequate Yearly Progress, according to the report.
Then
there's the budget itself. According to DPS, it must first set aside
roughly $21.8 million in debt servicing payments before it spends a
penny for its classroom. The $21.8 million is equivalent to the wages
and benefits of 227 teachers.
To add insult to injury, a 2008-2009
DPS audit released by the school district's Office of the Emergency
Financial Manager discovered that its bookkeeping had been "sloppy,"
even fraudulent -- the result of faulty documentation, missing checks and
even the diversion of school funds to private accounts. In fact, the
audits determined that only five of Detroit's schools had entirely
proper bookkeeping and that many of the schools hadn't been audited in
more than six years.
So far this year, the DPS is expected to receive
slightly more than $500 million in stimulus funds from the federal
government, which should provide some much-needed relief. But it may be
short-lived if the DPS continues to overspend. The district's budget
indicated that, in order to eliminate its current legacy deficit in
fiscal year 2010, the school system would have to jettison all student
transportation; close and consolidate certain schools; forgo safety and
security programs; and prune all administrative functions as much as a
legally possible.
It's a tall order. But if it means investing in
young minds for the future, it could very well be worth the bankruptcy
filing that may be necessary to get it done. - Carolyn Okomo
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