Nick Krieger is a lawyer who routinely interpreted and analyzed complex statutory language in Lansing.
The Michigan Senate and House of Representatives only have six scheduled session days before their summer recesses. So what’s on their list of priorities? The Detroit Public Schools.
Each chamber has passed its own plan pertaining to the breakup and reorganization of DPS. Both plans would eliminate the current public school system and split the district into two new entities – a qualifying district that would pay off the $467 million in current operating debt with local property tax dollars (the old district), and a community district that would assume the responsibility of running the schools and educating the children (the new district).
Each school district in the state is funded through a per-pupil allotment known as the foundation allowance, which is calculated annually and used to pay for school operations. DPS’s foundation allowance is roughly $7,430 per pupil this year. The foundation allowance consists of two parts – a state-funded portion and a locally funded portion.
Just like other districts, DPS levies a non-homestead property tax of 18-mills to pay for the local portion of its foundation allowance. In Detroit, this local property tax brings in about $72 million annually. The state portion of the foundation allowance – the amount that is actually appropriated from the school aid fund – consists of the difference between the total foundation allowance ($7,430) and the local portion that is generated by the non-homestead property tax ($72 million divided by the number of pupils).
The House and Senate agree that the $72 million generated annually by DPS’s non-homestead property tax should be diverted from its current use (paying for the local portion of the foundation allowance) and statutorily redirected to the old district to pay off the $467 million in operating debt. Of course, this would leave the local portion of the new district’s foundation allowance completely unfunded – a void of $72 million per year.
To fill this void in the new district’s operating budget, both the House and Senate would appropriate $72 million a year from the state’s tobacco settlement award. Under the Senate plan, this annual appropriation would continue each year until the old district pays off the operating debt in full, at which time the new district would be authorized to levy the non-homestead property tax to pay for school operations. It is estimated that this would take approximately 10 years, and the Senate legislation would therefore end up providing about $720 million to fund the local portion of the new district’s foundation allowance over this period ($72 million a year for about 10 years).
The amended House plan, unlike the Senate plan, would cap the annual appropriations from the state’s tobacco settlement award at $617 million. Hence, at $72 million a year, this funding would only last for about 8.5 years. Given that it would take the old district approximately 10 years to pay off the operating debt, and that the new district would not be able to levy its own operating tax until the debt is repaid, it is simply unclear how the new district would secure the necessary funding to operate during the ninth and tenth years of the debt repayment period. Indeed, it appears to me that the House plan has been intentionally designed to cripple the new district by depriving it of adequate per-pupil funding after 8.5 years.
The House and Senate plans would both provide start-up loans for the new district, but they differ with regard to the size of the loans. The senate plan would authorize loans of $200 million or more for the costs of transitioning to the new district and renovating school buildings. The amended House plan would authorize loans of $150 million for this purpose (an earlier version of the House plan would have authorized just $33 million). Whether the final figure is $200 million, $150 million, or a different amount, however, it’s important to remember that these are loans – not state appropriations – and would have to be paid back by the old district. In other words, the amount of the loans would be added to the district’s already-existing $467 million deficit, and would further extend the debt repayment period.
Both the House and Senate plans purport to restore local control, but would not return any power to the democratically elected Detroit Board of Education, which continues to serve but has been stripped of its powers under emergency management. Instead, the plans would dissolve the current board of education and replace it with a new board to be elected in November 2016. This new board would operate the new district and old district concurrently until the operating debt is paid off and the old district is dissolved.
Irrespective of which plan ultimately prevails, the new board would be subject to oversight by a state financial review commission, with a majority of members appointed directly by the governor. The financial review commission, chaired by the state treasurer, would have the power to modify budgets, review contracts and collective bargaining agreements, approve or reject the issuance of new debt, and approve the hiring of the new district’s chief financial officer. Under the House plan, the financial review commission would have other powers as well, such as the authority to veto any decision by the new district to terminate the superintendent’s contract.
Both plans would end emergency management of the Detroit schools and terminate the Education Achievement Authority (“EAA”), at least in theory. However, they would confer numerous new powers upon the state school reform/redesign officer, a direct appointee of the governor who possesses many of the same powers as the EAA and emergency manager combined. Among other things, the plans would require the state school reform/redesign officer to implement an “A” through “F” letter grading system for all traditional public and charter schools in Detroit.
One key difference between the two plans involves the treatment and compensation of teachers in the new district. The amended House bills set forth several Draconian, anti-teacher measures that are not contained in the Senate legislation.
The amended House plan would permit the new district to hire noncertified/nonendorsed teachers with no degree, training, or experience whenever “it would be appropriate and in the best interests of the pupils.”
What, exactly, does it mean to be “appropriate and in the best interests of the pupils”? We don’t know because the legislation does not elaborate. The House bill goes on to require the Michigan Department of Education to waive student-teaching requirements for any noncertified/nonendorsed teacher who works in the district for three years under this provision. Additionally, the House legislation would institute a system of merit pay for newly hired teachers, linking their salaries to “job performance and job accomplishments.”
Note that these changes would only apply to teachers in Detroit – not in any of Michigan’s other 540 public school districts. Aren’t Detroit children as deserving of competent, fairly compensated teachers as kids in the rest of the state? Or did the House include these provisions as a way to dilute the pool of qualified teachers working in Detroit, and thereby break the teachers’ union? You really have to wonder.
In recent days, observers have been focused on the much-debated Detroit Education Commission (“DEC”) that would be created under the Senate legislation. The DEC, which would be appointed by Detroit Mayor Mike Duggan, would have the exclusive power to control the location and opening of new schools (both traditional public schools and charter schools) in the city of Detroit for at least five years. Advocates claim that the DEC is essential to ensure that school resources are spread evenly across the city and to prevent the frequent and disruptive opening and closing of schools. Opponents stress that the DEC would further prevent the restoration of local control to an elected school board. In addition, they point out, Detroit voters already rejected mayoral control of the schools 10 years ago.
The Senate plan would establish the DEC. The amended House plan would not, but would create an advisory council with the power to make nonbinding recommendations concerning the use of school resources and the location of school facilities.
Members of the Senate speak at great length about the innumerable ways in which their plan would restore local control over the Detroit schools. But education policy experts will tell you that the authority to site and open schools is one of the single most important powers that a local school board can exercise. Take that authority away, and the local board is as good as impotent. The Senate’s DEC proposal is yet another example of discriminatory legislation that would create one rule for Detroit, but an entirely different rule for everyone else in the state.
With respect to the location of charter schools, I unquestionably support the idea of an accountable entity with the duty to oversee the opening and closing of charters, ideally on a statewide basis (perhaps the State Board of Education). Unfortunately, the DEC would be appointed entirely by the mayor of Detroit, and there would be little or no direct accountability to the people. While I’m no fan of charter schools in general, I cannot deny that charters are going to remain a piece of the education mix in the city of Detroit – at least for the near future. Why should the mayor have all the power to determine which charters can open and which ones can’t?
We’ve all seen how Rahm Emanuel has wielded his power over the schools in Chicago. Should one man have the authority to play favorites by facilitating investment and the building of new schools in some neighborhoods, while encouraging disinvestment and the closure of schools in other neighborhoods? I personally don’t think so.
With a fast-approaching June 16 legislative adjournment date, there is mounting pressure to reach an inter-chamber compromise. Speaker of the House Kevin Cotter apparently thinks there are sufficient votes in the Senate to pass his amended House plan. Others, including Detroit Mayor Mike Duggan and certain state senators, are still hopeful that the DEC provisions of the Senate legislation might find additional last-minute support in the House.
Gov. Rick Snyder, an initial booster of the Senate legislation and the DEC, has now hinted in typical Snyderesque fashion that he might be willing to sign either chamber’s plan. There are just two short weeks, with only six session days spread between them, for one chamber or the other to make a move. All we know for sure is that one of the plans, or a combination thereof, will need to be enacted soon if the Legislature wants to leave time for the election of a new school board this November.
In spite of my many criticisms of the House and Senate legislation, I freely admit that the Senate plan is better than the House plan. It would not cap the number of years of state funding for the new district, nor would it implement many of the anti-teacher measures set forth in the House bills. Nevertheless, both plans have considerable flaws. Most notably, both seem designed to permit Lansing to escape any real blame, and to confuse the casual observer into believing that the teachers and school board members (rather than the emergency managers) are somehow responsible for the crushing debt. Now that we know for a fact that the debt was racked up by a series of state-appointed emergency managers, don’t the legislators who enacted the emergency manager law bear some responsibility for fixing it?
In the end, there are two options: Michigan lawmakers can underfund the district, drive away its best and brightest teachers, enable it to outsource its operations to management companies and profiteers, and watch its enrollment continue to decline. Alternatively, they can pay off the state-created debt, make sure the district receives adequate funding during the debt repayment period, restore meaningful local control over Detroit’s public school system, and guarantee that quality public schools are available to all children in Michigan’s largest city.
The choice is theirs. In the days ahead, they will have one last opportunity to craft a commonsense solution that focuses on the most important stakeholders: Detroit’s kids.
Let’s hope they work quickly and do what’s right to ensure the lasting viability of the Detroit Public Schools.
Nick Krieger is a lawyer and blogger with particular interests in constitutional law and the legislative process. In his former position with the Michigan Court of Appeals, he routinely interpreted and analyzed complex statutory language.