Detroit board avoids shutdown with last-minute budget approval

July 1, 2008
Two-year spending plan calls for laying off 1,700 workers, closing an undetermined number of schools
UPDATE: The Detroit school board has averted a possible shutdown in its operations by approving a two-year budget that includes nearly $522 million in spending cuts intended to get the district out of deficit. But many specifics of how the savings would be realized — particularly $70 million in union concessions and an undetermined number of school closings — still must be worked out. Under the plan, the district would lay off about 818 teachers and 900 other workers, in addition to eliminating 142 vacant administrative jobs and cutting $81 million in non salary spending. To read The Detroit Free Press article, click here. The financial crisis in Detroit Public Schools has left the district facing a possible shutdown Monday, and some local officials fear the problems revealed from the district's wrangling with a $400 million shortfall could lead to another state takeover of the school district.To read The Detroit Free Press article, click here.

FRIDAY: After heated discussions and confusion over state law, the Detroit Public Schools board has voted 7-4 to reject a two-year plan that would close seven schools, eliminate 1,700 jobs and cut spending to balance the budget. The board also voted to cut ties with its food services manager, leaving open the question of how the district will feed students. By law, the board must approve a budget by Monday.
To read The Detroit Free Press article, click here.

SIDEBAR: After a year as superintendent of Detroit Public Schools, Connie Calloway has been praised by supporters for uncovering financial mismanagement and ideas on using test results to identify areas in which students need to improve. But Calloway also has been criticized by detractors for waiting until this month to address what became a $400 million hole in the budget and for not delivering a detailed blueprint for fixing the district's finances and improving student achievement.

To read The Detroit Free Press article, click here.

EARLIER: For at least the last four years, Detroit Public Schools has hidden deficits in its operating budget, helping create a $400 million hole, according to a draft report by a panel of outside school finance experts. The district also had only "pockets of competence" among its financial staff, hasn't followed basic accounting procedures and the current administration has done little to address those problems, according to the document, prepared by Washington-based Council of the Great City Schools.
To read The Detroit Free Press article, click here.

The Detroit school board has postponed voting on a district plan to trim nearly $362 million from the 2009 budget by eliminating more than 2,200 jobs and other cuts. Board members urged district administrators to explore other avenues to avoid the harm such deep cuts could inflict. The proposed staff cuts would amount to about 14 percent of the district's nearly 16,000 employees.
To read The Detroit News article, click here.

Detroit Public Schools projects more than $400 million in shortfalls for this school year and the next, a financial crisis that could become even worse if enrollment drops below 100,000 students this fall as expected. The deficit is believed to be the largest the district has ever faced, a hole fueled largely by declining enrollment but also by decreasing property tax revenues and rising staff costs. The expected enrollment drop also would remove state-imposed limits on the number of charter schools in Detroit, which already have been a major drain on enrollment and funds. The district has lost 67,000 students since fall 2000, and more than 33,000 students who live in the city attend charter schools.
To read The Detroit Free Press article, click here.

Just last week a budget document showed the Detroit district planned layoffs and other cuts to stave off a deficit anticipated at $297 million for fiscal year 2009, including a shortfall carried over from this fiscal year. It's unclear why the deficit continues to mount, and district administration did not return calls for comment. To read The Detroit News article, click here.

Detroit Public Schools officials are considering plans to lay off nearly 800 teachers in the next five months, outsource school social workers and psychologists, and make other budgetary cuts to reduce a projected $297 million budget shortfall for fiscal year 2009. That information on the district's mounting fiscal problems, outlined in a draft budget document prepared by Chief Financial Officer Joan McCray, gives a glimpse into how the district plans to address a multimillion-dollar deficit that came to light last month and an even larger shortfall expected next year.
To read The Detroit News article, click here.

Some school board members in Detroit argue that the looming deficit of at least $67 million for the school system was created partly because the district did not reduce teaching and other staff after enrollment dropped by 12,000 students -- or nearly 10 percent -- last fall.
To read The Detroit Free Press article, click here.

The Detroit Public Schools budget deficit has grown from $45 million to $65 million -- and could grow higher. Superintendent Connie Calloway says the district's achievements, dotted here and there, are buried under a mountain of incompetence, ineffectiveness and insanity that has kept her -- and the six superintendents before her -- from effectively tackling the district's two largest problems: improving learning and stanching an enrollment bleed.
To read The Detroit Free Press article, click here.

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