PLEASE NOTE: During July and August, Michigan Education Digest is being published every other week. We will resume our weekly publication schedule on Tuesday, Aug. 23. -Ed.

Contents of this issue:
  • Study: One-third of Michigan districts outsourcing

  • USDE: Michigan failing in oversight of tutoring, choice

  • Detroit Schools collected $259 million in illegal taxes

  • Opinion: Kids will suffer if MEA wins charter school suit

  • State Department of Education considers high school reform

Grand Rapids, Mich. — A study conducted in May and June by the Mackinac Center for Public Policy, the publisher of this periodical, found that 35.5 percent of Michigan school districts are outsourcing food, janitorial or busing services, according to The Grand Rapids Press. That figure is up from 34 percent who were reported in 2003 to be privatizing services.

Michael LaFaive, the Mackinac Center's director of fiscal policy who co-authored the study of all 552 public school districts in Michigan, told The Press that districts "need to come up with ways to balance their budgets." The Press reported that districts are facing quickly escalating costs in two areas, health insurance and retirement pensions. Retirement costs will comprise 16.34 percent of payroll for school year 2005-2006, according to The Press.

Not everyone welcomed news that districts are outsourcing. The Press reported that Amy McGlynn, president of the board of education for Grand Rapids Public Schools, said, "We want employees who are going to be here long-term and buy into your goals, and that can't happen when you hire a company. But at the same time you don't want the education to suffer and you have to pay the bills." Grand Rapids is contracting with Dean Transportation for 225 employees this year. Similarly, teachers union leaders fear that districts will come to depend on companies that will then raise their prices.

Nonetheless, according to The Press, Linda Wacyk of the Michigan Association of School Administrators believes that, "As long as (districts) are not reducing services to kids, (privatizing) seems like a reasonable approach."

The Grand Rapids Press, "1 in 3 districts contract out work, state study says," Aug. 7, 2005

Gongwer News Service, "Mackinac Center: More Schools Outsourcing," Aug. 8, 2005 article_ID=441520103&newsedition_id=4415201&locid=1&link=news_articledisplay.cfm? article_ID=441520103%26newsedition_id=4415201%26locid=1 (Link requires subscription)

Booth Newspapers, "More school districts privatize food, janitorial, bus jobs," Aug. 6, 2005

Mackinac Center for Public Policy, "Survey: School Outsourcing Grows," August 2005

Mackinac Center for Public Policy, "Contract Out School Services Before Laying Off Teachers," June 2003

Detroit — In an audit released last week, the U.S. Department of Education found that the Michigan Department of Education failed to oversee the tutoring services required under the 2002 No Child Left Behind federal law, according to The Detroit News. The News reported that the audit also noted the state education department's failure to notify parents who were eligible for school of choice options; to offer all such school of choice services; to monitor the effectiveness of tutoring services; and to release Michigan Educational Assessment Program test scores in a timely manner.

State Department of Education spokesman Martin Ackley told The News that the department was not willfully out of compliance with the federal law. "It's just such an extensive law that education departments across the country have had to implement it in stages," Ackley said. In a letter to the regional inspector general, the state deputy education superintendent, Jeremy Hughes, said the department is working to address the auditor's findings, according to The Grand Rapids Press. Gary Marx, assistant superintendent of the Oak Park School District, said he did not have "any gripes" with the education department. "They're asked to do things with resources not geared up to do what law requires," Marx told The News.

Last year, only 11 percent of the 103,282 students statewide who were eligible for tutoring received such services, according to The News. Ackley told the newspaper that a report that compared the MEAP scores of those who received tutoring with those who had not would be prepared beginning this school year and released in 2007.

But Kierre Brown, a 36-year-old Detroit mother of three whose children have been tutored, told The News: "Getting assistance was like pulling a lion's tooth out of its mouth. If no parent is watching to stand and fight, they get rolled over."

The Detroit News, "Michigan fails in oversight of tutoring," Aug. 4, 2005

The Grand Rapids Press, "Missing a chance for tutors," Aug. 11, 2005

Michigan Education Report, "No Child Left Behind law demands 'adequate yearly progress' and offers school choice options for parents," Fall 2002

Detroit — Detroit Public Schools discovered on July 28 that it had collected $259 million in illegal taxes, The Detroit News reported. The district immediately disclosed its error to the state treasurer's office and investors. In a formal statement, DPS Chief Executive Officer William F. Coleman III said that the district recognizes "the need for full disclosure to the public and specifically to the taxpayers of Detroit." A spokesperson for the district said that the tax collection was an "innocent error."

The $259 million were levied through an 18-mill tax on commercial property and rental housing that expired after June 2002, according to Gongwer News Service. To continue receiving the tax, the district would have had to obtain approval from the voters, as it will be seeking this November for future collection. The district told The News that it did not know the reason it had neglected in 2002 to request a renewal of the 18-mill tax.

According to The News, Fitch Ratings, a credit evaluation agency, has said that the district may have to give taxpayers a refund of the $259 million. Despite the fact that this amount may be added to a budget deficit of over $200 million the district was already facing, CEO Coleman stated that the district is not in danger of going bankrupt.

A suit filed against the city and the district that would have required the district to repay the amount collected illegally was thrown out last week by the Michigan Tax Tribunal, suggesting that the schools might be less likely to be ordered to refund the money. A district spokesperson told Gongwer on Friday that though the district is pleased with the tax tribunal judge's action, it is "not out of the woods by any means."

Many Detroit residents were stunned by the news. One parent, Dana Hart, who removed her son from a Detroit elementary school because she was dissatisfied with the district, told The News: "It's somebody's job in the district to be aware of when the millage was up. ... Apparently someone's not keeping track." According to The News, Pam Criss, chairwoman of the Local School and Community Organization of Malcom X Academy, said, "The public has been fooled."

In an editorial last week, the Detroit Free Press recommended that "before the Detroit City Council puts (a new millage levy) on the Nov. 8 ballot, it ought to demand a better explanation of what went wrong ... and a pledge that every alternative to make amends will be explored before a remedial tax is imposed." An editorial in The Detroit News called on the outgoing reform school board to "quickly adopt a payback plan."

The Detroit News, "Tax error may cost Detroit schools $259 million," Aug. 10, 2005

The Detroit News, "Illegal property tax stuns residents," Aug. 11, 2005

Detroit Free Press, "Overtaxed," Aug. 11, 2005

The Detroit News, "Detroit taxpayers deserve $259 million school refund," Aug. 12, 2005

Gongwer News Service, "Detroit Schools wins first round in tax battle," Aug. 12, 2005 article_ID=441560101&newsedition_id=4415601&locid=1&link=news_articledisplay.cfm? article_ID=441560101%26newsedition_id=4415601%26locid=1 (Link requires subscription)

Mackinac Center for Public Policy, "Former DPS CEO Grudgingly Testified to the Benefits of Educational Liberty," August 2005

Grand Rapids, Mich. — In an op-ed published in The Grand Rapids Press, Ryan S. Olson said that a lawsuit filed earlier this year by the Michigan Education Association would hurt children because it seeks to close down more than 30 charter schools established by Bay Mills Community College. (Disclosure: Olson is the managing editor of Michigan Education Digest.)

The MEA's suit contains four allegations. It alleges that a legal opinion written in 2001 by then-Attorney General Jennifer Granholm "stated without legal citation" its assertion that Bay Mills Community College was authorized to establish charter schools in its district and that the district is defined in the college's official charter. Though the former attorney general did not state it directly in her opinion, the college's charter defines its district as the "State of Michigan."

The MEA's suit also alleges that Bay Mills has contracted illegally with a private firm for oversight functions, that the community college board members are not publicly elected or appointed by publicly-elected officials, and that members of the college's board cannot be removed by the state education superintendent.

Though these allegations may sound serious, the op-ed stated that the charges should be "taken with a grain of salt" because several state officials, including the state Legislature and the state Department of Education, have continued to fund the Bay Mills charter schools.

In his op-ed, Olson wondered how the MEA could "burnish a public image of caring about kids," when its lawsuit calls for the harshest possible remedy, closing down more than 30 schools and depriving more than 8,000 children of an education option their parents have chosen. "In the unlikely event that a technical fault is found (with Bay Mills' chartering practices), that technicality would require a slight course correction — not closing the schools altogether," Olson said.

The Grand Rapids Press, "Kids will suffer if MEA wins scorched-earth charter school suit," Aug. 6, 2005

Michigan Education Report, "MEA sues state over Bay Mills charters," Summer 2005

Detroit — According to the Detroit Free Press, the Michigan Department of Education has enlisted Achieve Inc. to help reform Michigan high school education, with measures including professional development for teachers and student assessment. Matt Gandal, executive vice president of Achieve, made a presentation to the state Board of Education on Tuesday in which he pointed out that Michigan is at or even below the national high school and college graduation rates, according to Gongwer. Gandal told the board, "There's a great opportunity to do something" about high school course and graduation requirements, which are currently determined by local school boards, Gongwer reported.

Gov. Granholm has suggested that Michigan needs to double the number of college graduates over the next 10 years. The Detroit Free Press noted that the high school reform movement is gaining a higher profile nationally as concern about improving the U.S.'s international competitiveness grows. "If we were to mine the data ... I think we'd find we're not doing very well," Howell Public Schools Superintendent Chuck Breiner told the Free Press regarding national high school student performance.

Achieve's Gandal said that data indicate few districts or states have curricular or graduation requirements that are preparing U.S. students for college or the workforce, Gongwer reported. Gandal said that Achieve is developing tools to help assess whether students are being adequately prepared for college, but he praised the concept of the Michigan Merit Exam. "If the exam is used (by colleges and employers), students will take it more seriously, (and) parents will take it more seriously," Gandal told the board. Gongwer reported that the state education department is already preparing a new merit exam to include a college entrance test, and it said that Gandal further recommended that college placement assessments be included.

In addition to these measures, the Free Press suggested that the success of high school reform may be determined by early models being adopted by schools around the state, which include changing schedules, making classes smaller and offering online courses. The effort for high school reform, state Board of Education President Kathleen Straus said, "is just beginning."

Gongwer News Service, "Achieve pushes Michigan high school standards," Aug. 10, 2005 article_ID=441540105&newsedition_id=4415401&locid=1&link=news_articledisplay.cfm? article_ID=441540105%26newsedition_id=4415401%26locid=1 (Link requires subscription)

Detroit Free Press, "High school reform efforts begin in Michigan," Aug. 7, 2005

Michigan Education Digest, "State board considers statewide graduation requirements, reforms," Aug. 2, 2005

MICHIGAN EDUCATION DIGEST is a service of Michigan Education Report (, a quarterly newspaper with a circulation of 130,000 published by the Mackinac Center for Public Policy (, a private, nonprofit, nonpartisan research and educational institute.

Contact Managing Editor Ryan Olson at

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