DETROIT, Mich. – The Detroit Public Schools is facing a $45 million budget deficit, which if not alleviated may lead to a second state takeover in a decade, according to The Detroit News.

If the district fails to resolve the debt, it will be in default of a state-mandated Deficit Elimination Plan to pay back $210 million in debt. DPS has an operating budget of $1.2 billion, and has been plagued with an exodus of students. This year, DPS saw a decrease in enrollment of 12,000, which equates to about $90 million in state aid, The News reported.

Board member Marie Thornton is not optimistic about the district’s ability to get itself out of this financial bind.

"I project there will be a deficit if we are not able to relieve the general fund expenditures from other sources, like special education funding," Thornton told The News. "This lets me know Dr. Calloway is not able to manage a school district this large, and she continues to point fingers at the past administration."

SOURCE:
The Detroit News, "Detroit schools face $45M deficit," May 16, 2008

FURTHER READING:
Mackinac Center for Public Policy, "Community colleges: ‘Wait and see’ on Detroit charter schools," April 7, 2008



MACKINAC CENTER ANALYSIS:
The Mackinac Center commentary "Community colleges: ‘Wait and see’ on Detroit charter schools," describes how a state takeover may be the least of Detroit’s worries. In addition to its looming deficit, the district’s enrollment may soon drop below 100,000 students. If that happens, two community colleges, Bay Mills Community College and Wayne County Community College, would be able to authorize charter public schools within the city. Officials at each college said they would consider authorizing charter schools in Detroit, but don’t have an application in the works

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