Poor Decisions, Not Funding System, Fuel Detroit Schools’ Woes

DPS has benefited from state loan program

Finding solutions to help Detroit students not only requires recognizing the problem. It also requires a clear picture of the facts and understanding how the current system works.

In a recent MLive column, Ann Arbor attorney Eli Savit offers a well-intentioned but misdiagnosed policy proposal to address the genuinely disturbing images of mold and vermin found in some Detroit Public Schools buildings. He calls on Lansing leaders to fix the state’s “regressive school-finance system and earmark state funds for school building projects in poorer districts.”

One can make a case that funds designated for building construction and major maintenance projects could be doled out more equitably among districts. But DPS has, in fact, had access to large sums of capital dollars in recent years.

Detroit’s unique history and the prolonged downward spiral of enrollment and financial health have much to do with its facilities challenges, but previous decisions about resources have contributed a great deal, as well.

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Since 2000, with the city suffering from economic woes and many parents opting to leave the district or to enroll in a public charter school, nearly 200 of DPS’ 300 schools have been shut down. Along the way, however, the district reportedly spent more than $100 million to improve buildings that shortly thereafter were demolished, or simply abandoned.

In 2009, Detroit voters approved a $500 million bond proposal for school construction, piled onto growing streams of debt. On January 28, three Republican state senators, including the education committee chair, formally requested the state auditor general to investigate and share information that might explain how a total of $2 billion designated to improve facilities was used.

Even if Detroit faced greater challenges than other districts to collect those dollars, that by no means represents the greatest disparity.

Public charter schools lack access to any local property tax dollars for facility acquisition and construction. Yet Detroit’s charters are not all over the news with issues of mushrooms and mice. One imagines that if any charter were out of compliance with the city of Detroit’s building inspectors, certain news agencies would feature the story prominently.

Sidestepping the disparity faced by charters, Savit instead builds his case on an inapt comparison. He suggests that, since the average home value in Detroit is one-tenth of that in Bloomfield Hills, Detroit’s taxes would have to be raised 10 times higher than Bloomfield Hills to achieve equity.

Strictly speaking, though, the amount of property tax funds available to a district depends not on average home values but on the overall tax base. State data shows the larger Detroit’s beleaguered tax base at $6.3 billion, nearly twice as high as wealthy Bloomfield Hills’ $3.3 billion. Detroit has a higher millage rate, with a far greater share of its local property tax funds dedicated to debt retirement.

Savit also declares that Michigan does not rank among the states providing “at least some aid for school building and maintenance projects.” But the state does not leave poorer school districts and their students’ facilities needs completely out to dry.

The School Bond Qualification and Loan Program exists to help poorer districts by granting access to the state’s credit rating and direct borrowing to finance new construction and remodeling. As of the end of 2014, 136 Michigan school districts participated in the program, owing the state a combined $1.77 billion. Detroit Public Schools carried nearly one-tenth of the total debt, at $161 million.

One can debate whether the state’s loan program provides sufficient aid, but its existence should not be disregarded.

Equitable funding remains a reasonable policy goal both for school operating budgets and for capital projects. Yet failure to address past problems or to acknowledge available resources offers little consolation that today’s problems will be effectively solved.

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