A Tale of Two Cities

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January 13, 2016. Share on Twitter

What About Tomorrow? For any city, the key to its future is the perceived safety and quality of its schools—an important indicator for assessed property vales and long-term focus on the future. In Detroit, where the Detroit Public Schools (DPS), some 107 schools serving nearly 50,000 students, have been run by a series of state-appointed emergency managers since March of 2009, has $515 million in past debts and unpaid vendor and pension bills, a wave of teacher absences, described as “rolling strikes,” has thus captured the apprehension not just of city leaders, but also the state. That is a sharp contrast from the fall of 1999, when DPS had more than 150,000 students enrolled and no budget deficit—a year when teachers began the school year with a nine-day strike, in response to which, even though the strike was illegal, DPS imposed no fines, and teachers received a 6 percent raise, phased in over three years, better dental insurance, and smaller class sizes in some schools, according to Detroit News archives.

Yesterday more than half of Detroit’s 100 public schools were closed, keeping thousands of students at home as a “sickout” entered a second week: sixty-four of the city’s 97 schools were closed. Between the fierce winter weather, the school system, under an Emergency Manager appointed by Gov. Rick Snyder, with 46,000 students, has been in turmoil, struggling with poor morale among staff members, millions of dollars in debt and, increasingly, families that have other school choices for their kids. Indeed, as Ivy Bailey, interim president of the Detroit Federation of Teachers, noted, the city’s school classes have “too many students and rodents are plentiful.” State superintendent Brian Whiston said in a statement that DPS Emergency Manager Darnell Earley should set up a meeting with state, local, and district representatives in response to a press conference and a rally where teachers complained of buildings with leaky roofs, rat infestations, broken boilers and shortages of books and other supplies, noting: “I care deeply about the safety and well-being of teachers in Detroit, just as I do the students…They all still need to be in the classrooms teaching and learning, though. If buildings have health and safety issues, they need to be addressed immediately with the district administration and all appropriate agencies.”

Mayor Mike Duggan said in response to “substandard conditions in school buildings” reported by the Detroit Federation of Teachers, he plans today to visit “a number of those schools” with the heads of the Detroit Health Department and the Detroit Buildings, Safety Engineering and Environmental Department, noting: “Based on what we find, the City of Detroit will take whatever enforcement action is necessary to make sure all Detroit Public Schools are compliant with all health and building codes.”

For his part, Michigan Gov. Rick Snyder supports paying off the DPS debt and spinning off a new district; however, he lacks support in the legislature. Worse, there are no current negotiations between teachers and schools, which are currently under the supervision of state-appointed Emergency Manager Darnell Earley, who, in addition to being faced with the poor building conditions and supply shortages, is faced with growing teacher anger over large class sizes, pay and benefit concessions, and a state plan to create a new, debt-free Detroit school district. DPS, which has been run by a series of state-appointed emergency managers since March 2009, has $515 million in past debts and unpaid vendor and pension bills.

Kimberly Jackson, a seventh-grade teacher at Paul Robeson Malcom X Academy, at a lunchtime rally yesterday said the district’s students are being jeopardized by poor building conditions and a shortage of educational materials, noting students lack textbooks and other supplies and come to learn in buildings where roofs are leaking and they breathe mold every day, adding that even some bathrooms do not even have toilet paper: “We are set up for failure…No other district…would allow their children to be inside a school building under those conditions…Many of our (classes) are way oversized — some with as many as 50 children inside one classroom. It’s time out for that. It’s time out for biz as usual, it’s time out for working in deplorable schools.”

Learning about Debt. Detroit Mayor Mike Duggan yesterday said the state needs to address the district’s dire finances, saying that between 30 percent and 40 percent of state funding for Detroit schools “is now going to pay debt instead of going to teaching our children,” even as he called on teachers to stop forcing school closures: “I urge teachers to end the sickouts and remain in the schools, and I encourage our state officials to move quickly to address these pressing educational problems.” But the chances of help from the state appear uncertain: Sen. Phil Pavlov (R-St. Clair Township), Chair of the state Senate Education Committee, yesterday condemned the sickout, calling it “an illegal strike,” which is “damaging the district, and most tragically, it’s hurting children,” adding he was “actively working with my colleagues to address these escalating work stoppages, to hold individuals who break the law accountable, and to put Detroit students first.” Teacher strikes are illegal in Michigan.

A key issue—as it was in Detroit’s bankruptcy—is DPS’ debt “We understand why some are frustrated. Gov. Snyder is working to improve academics and finances in Detroit schools. Right now, the district pays a figure equal to $1,100 per child for debt service…The Governor’s plan would (allow) that money to be better spent in the classroom.” The Governor’s plan includes splitting DPS into two entities: The first, old DPS, would exist just to pay down debt; the new DPS would educate students: it would initially be run by a board appointed by the Governor and the Mayor of Detroit, but by 2021 full control would be shifted to an elected board.

Municipal Takeover? New Jersey State Senate President Stephen Sweeney (D-Gloucester) last night began floating a legislative plan for the state to take over major functions of Atlantic City’s government for 15 years, circulating a draft of the bill on the second-to-last day of the state Legislature’s 2014-15 session—but a bill, according to the gubernatorial candidate, which he reported was met with immediate resistance from his colleagues. With rumors for months with regard to whether the state intends a takeover of Atlantic City, a local radio host, Harry Hurley, last night, citing anonymous sources, reported that a plan was in the works in which “the Atlantic City Mayor and Council would be left with authority over only the least important, ministerial duties.” The draft has not been formally introduced. It was circulated to state Senate Democrats during a closed-door caucus meeting this evening to gauge their feelings on it, according to two sources with knowledge of the meeting. It did not get a warm reception, said the sources, who requested anonymity because they were not authorized to discuss what happened at the meeting.

Asked about the meeting, state Sen. Jim Whelan, a Democrat and former mayor of Atlantic City, refused to divulge details, adding: “I’m not supporting any takeover…I can only tell you I am not in favor of any such bill. You’re going to have to talk others.”

The draft legislation, the “Municipal Stabilization and Recovery Act,” under which the state Department of Community Affairs’ Local Finance Board, or a designee it names, would be able to assume or take over the “functions, powers, privileges, immunities, and duties” of Atlantic City’s governing body which are related to its fiscal condition or financial recovery, with said board’s director required to include “his (or her) rationale for the reallocation of every particular function, power, privilege, immunity or duty.” Although the draft — which names as its sponsors Democratic Senate President Stephen Sweeney and Republican state Sen. Kevin O’Toole — does not specifically signal out Atlantic City, it is written to apply to it, defining said local government as a “municipality in need of stabilization and recovery” and one which has lost more than half of its total assessed property values during the last five years. Under the proposed bill, an eligible municipality would be under “financial distress,” as determined by its “tax rate, cash deficit, or insufficient percentage of tax collections.”

Nevertheless, he stressed that Atlantic City has to consider drastic measures to dig itself out of the financial hole, including selling its water utility worth $100 million and nearby Bader Field or more. The last ditch actions came as the fate of the three bills sent by the legislature to Gov. Chris Christie remains uncertain, with the Senate President noting: “Something dramatic needs to be done there…At this point, we have to figure out what this is going to be…you are asking the state to do an enormous amount to come through for the city.” Sen. Sweeney added, however, that Atlantic City “has to start some of the help themselves, too. Atlantic City has to get serious about the decisions there.” With the deadline for state action down to the wire, Sen. Sweeney also circulated a bill that he said would “clean up” a measure aiming to stabilize Atlantic City’s revenues—a bill which he said is currently awaiting Gov. Christie’s signature.

But the 11th hour actions affecting Atlantic City’s future left fellow state Sen. Jeff Whelan (D-Atlantic), himself a former Atlantic City mayor, “very upset” by the State Senate President’s, at the abrupt, last minute proposals, which could have such a major impact on the city—especially since, as Sen. Sweeney conceded, Atlantic City Mayor Don Guardian had not been involved with the negotiations concerning a takeover, stating: “Atlantic City has to make decisions as to whether they’re going to be part of the solution or are they just going to stand in the way…There’s no way that just wishing the problem away is going to happen.”

Sen. Sweeney’s draft bill, “Municipal Stabilization and Recovery Act,” would empower the New Jersey Department of Community Affairs’ Local Finance Board or a body it designates to take over the “functions, powers, privileges, immunities, and duties” of the parts of the local government that deal with finances or fiscal recovery in cities that are in dire need of help, with the statutory language defining “financial distress” to be determined by their “tax rate, cash deficit, insufficient percentage of tax collections.” That is, the bill, yet to be officially introduced, does not specifically cite Atlantic City, albeit it does reference the city’s problems. Thus, it would need to be passed by both the Senate and the Assembly and signed into law by the governor to take effect—all this as New Jersey’s two-year legislative session is slated to kick off today at noon.

Rolling the Dice. The 11th hour introduction of bills that could be a prelude to a state takeover of major responsibilities of the city government for as much as 15 years, moreover, are mired in other proposed gaming legislation which could increase the odds against Atlantic City’s future—even as Moody’s reported that while the pending bills could help Atlantic City, they will not stabilize its finances. Moreover, even as Sen. President Sweeney was working on proposals to help Atlantic City, he had reached agreement on a proposal to put before New Jersey voters with regard to whether to expand casino gambling to north New Jersey—as part of an effort to keep the state competitive in the Northeast regional gaming market—but a proposed expansion which south Jersey legislators fear would severely damage Atlantic City’s economy. In response, Sen. Sweeney countered that the proposal would benefit the state as a whole and that any final package would include stipulations to help revitalize Atlantic City, including sending tax revenue back to the resort and making sure current casino owners their own at least part of both new north Jersey gambling halls.

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