Editorial: State should close dying districts

The Detroit News

All eyes have been on Detroit Public Schools and its glaring debt problems. But the state’s largest school district, which just received a $617 million bailout from the state, is far from the only district that faces financial troubles. A broader solution is needed for other ailing public schools around Michigan.

That solution should include a clearer framework for how to handle districts that have lost so many students it no longer makes sense for them to exist.

Case in point: Highland Park. The state should pull the plug on the dwindling district, which now only enrolls a little over 300 students. It closed its high school last year and it’s expecting to close one of two K-8 schools later this year because of declining enrollment.

One school building does not make a district. The state should facilitate closure of the district as it did with Buena Vista and Inkster schools three years ago. Those districts had generated so much debt due to enrollment loss that the Legislature stepped in to shut them down.

The state tried everything it could to save Highland Park schools. But what happened to this district shows that sometimes even the most substantial interventions aren’t enough to prevent the inevitable.

In Highland Park’s case, the state declared a financial emergency in 2012 and the emergency manager decided to charter the district, as a way to separate the debt from the schools. The 18 mills all traditional districts collect went to pay the debt the “old” district racked up—that debt still totals $7.8 million. The same thing happened in Muskegon Heights, and it’s a similar model included in the DPS bailout.

The Leona Group, the charter operator that took over running Highland Park, tried to revamp buildings in horrific condition and make the remaining schools appealing, but it wasn’t enough to convince families to stay. Most have already chosen to enroll their children in neighboring districts or charter schools.

The revamped Highland Park and Muskegon Heights charter districts eliminated their deficits last year. Yet the old districts saddled with debt remain on the list of 22 districts that the Education Department projects will end the fiscal year in deficit. The good news is that number is down from 41 districts last year and 58 in 2014.

Michigan’s second largest district, Utica Community Schools, faces financial shortfalls, too, although it’s not on the list. The district is planning to fill its $19.3 million deficit from its fund equity, in addition to staff cuts and other savings measures.

For districts that can’t address their deficits internally, outside intervention is required. State Superintendent Brian Whiston is aware which districts are struggling the most, and when districts look beyond repair, he should work closely with the Department of Treasury and the Legislature to determine how to proceed. The Education Department already sends lawmakers a quarterly report on districts in deficit, and early warning legislation passed last year gives Treasury and intermediate school districts more ability to get involved before a financial emergency is declared.

While charter schools with deep deficits often close on their own, that almost never happens with traditional districts. For dying districts like Highland Park, the state needs a strategy for closure and ensuring students have another place to go.