The Hard Challengeof Governing for Tomorrow

January 15, 2016. Share on Twitter

What About the Future? Today’s children, are tomorrow’s future leaders; so the complex roles of states and local government leaders in providing for their education are vital. CNN, late yesterday, ran a headline: “Budgets leave children by wayside in 2 Michigan cities,” underlining both the state and municipal role in Flint and Detroit of a foundering system critical to the future of both cities and to the complex interrelationships in state and local school finance. Ingrid Jacques, of the Detroit News, late last night wrote: “The emergency manager of [the] Detroit Public Schools (DPS) is now irrevocably tainted by his time in that same role for the city of Flint. Whether he deserves blame is still in question, but [Darnell] Earley was the state-appointed manager who oversaw Flint’s transition from the Detroit water system to Flint River water. The switch in the spring of 2014 has led to disastrous consequences, including children now suffering from lead poisoning from the drinking water. Gov. Rick Snyder’s reputation has suffered for not acting quickly enough to ameliorate the situation in Flint and to demand accountability after. The Governor has a major perception problem having Earley at the helm of the financially failing DPS. And reports this week of school buildings that are unsafe and unclean for children only make it more obvious that this emergency manager is no longer a good fit. You can’t have the same man associated with the poisoning of Flint’s children now responsible for the safety of nearly 50,000 Detroit kids.”

After the wrenching struggle to emerge from the largest municipal bankruptcy in U.S. history, the fate of Detroit’s future is, once again, very much at stake—and it’s one that involves the complex interrelationship of governance of schools between the state, city, and school board. What is clear is that it is currently dysfunctional, risking broadcasting a message to families with children that Detroit is not a city in which to raise a family—a message which no city interested in its long-term fiscal sustainability wishes to broadcast.
While the number of school closings in Detroit appears to be ebbing, teacher “sickouts” yesterday continued to force school closings. Teachers in the fiscally challenged Detroit Public Schools (DPS)—under a state-imposed emergency manager—are upset about large class sizes, pay, and benefit concessions; they are also opposed to a state plan to create a new, debt-free Detroit school district; they are upset about the deplorable conditions in DPS school buildings: “As frustrations by educators, parents and the community continue to mount over deep concerns about Detroit Public Schools’ deplorable health, safety and learning conditions, we need real answers from Emergency Manager Darnell Earley and Gov. Rick Snyder…The community is crying out for help over what is clearly a crisis in our schools. The DFT has called for public hearings to fully reveal all of the problems in every school and for (Mr.) Earley to announce how he intends to mitigate the issues. Our students and their families deserve real answers.”

The statement came on the same day Mayor Mike Duggan—on a tour of a number of Detroit Public schools with city officials looking for health and safety violations witnessed a mouse—one apparently not enrolled. Mayor Duggan also witnessed school children wearing their coats in a chilly classroom—afterwards describing his visit as “deeply disturbing.” The school system, which has been subject to state control via a series of state-appointed emergency managers since March 2009, has accumulated $515 million in past debts and unpaid vendor and pension bills. There is no A for math, nor for state oversight. Gov. Rick Snyder yesterday noted: “What I would say is it’s really unfortunate, because it’s coming at the expense of the kids. There are other venues and ways — if people have issues or things that they’d like to present — to do that. They shouldn’t be doing it at the expense of not having kids in class, and that is something that we’re carefully monitoring,” adding that: “If it continues, I’m sure you’ll see action at some point. But the goal is, hopefully, they’ll stop that, and they’ll find other mechanisms and ways to communicate what issues they may have — and not do it at the expense of children.” But when reporters asked whether the solution might come from state enactment of legislation that better clarifies what constitutes “strike conditions,” the Governor said that could be something the Legislature eventually picks up. The city late Wednesday announced it has launched a citywide inspection of all Detroit Public School buildings in response to complaints by teachers about health and safety problems.

The inspections, which began Tuesday at Spain Elementary Middle School, will be completed by the end of this month in the 20 DPS school buildings believed to be most problematic, and all 97 of the district’s school buildings by the end of April. Charter schools will be inspected as well, according to Mayor Mike Duggan’s office. The call for inspections came a day after Mayor Duggan toured several DPS schools with city officials in the wake of sickouts by teachers who have complained about building conditions, among other issues. Mayor Duggan has vowed to seek immediate solutions to the “deeply disturbing” problems he observed in some of the schools, including a dead mouse on the floor of a classroom and students wearing coats in class to ward off 50-degree chill. “This effort isn’t about blaming anybody,” Mayor Duggan said in a statement released Wednesday: “It’s about making sure that every child and every teacher in Detroit goes to school in a safe and healthy environment.” The Mayor on Tuesday engaged the heads of the Building, Safety, Engineering and Environmental Department and Detroit Health Department to begin immediate inspections. If code violations are found, the building department will “take appropriate action to make sure that the violations are understood, along with the required repairs and the timeline for completing them,” according to the city.

The mayor has said that quick action is needed to fix up the district’s schools and revamp Detroit’s education system, which includes DPS, the state-run Education Achievement Authority and charter schools. Gov. Snyder has proposed a $715 million plan that would create a new, debt-free Detroit school district and a commission to oversee the opening and closing of the city’s schools. Indeed, legislation to restructure DPS is expected to be introduced straightaway—creating its own governance issues and challenges—a potential tug of war between the state, city, and DPS school board.

Ms. Jacques wrote: “Snyder hates politics. And he doesn’t like to stray from his relentlessly positive mantra. The governor is also fiercely loyal to those who work with him, and avoids doling out blame. But if the governor continues to stand by Earley, he can kiss goodbye his chances of getting restructuring legislation for Detroit schools passed. Snyder’s legislative proposal is a high priority for him. And DPS desperately needs the financial aid that would accompany the plans. Snyder has already admitted the emergency manager framework hasn’t worked for Detroit schools.”

Mr. Earley is the fourth appointee in a string of state-appointed emergency managers who have failed to solve the fiscal and academic shortfalls in the district, starting with the appointment of Robert Bobb by former Gov. Jennifer Granholm in 2009. The bills Gov. Snyder is supporting would end emergency management and would place control of schools in the hands of an appointed board that would transition to an elected board. Part of the legislation was introduced yesterday by Sen. Geoff Hansen (R-Hart). Sen. Hansen, vice-chair of the Senate Government Operations Committee and chair of the appropriations subcommittee on K-12 funding, has worked with the Governor for months getting the legislation ready—legislation in which Gov. Snyder envisions splitting DPS into two entities to separate more than $500 million in debt from a new district that could direct its funds to educating students rather than covering past borrowing. The governor’s office is hoping that legislation would take effect by the end of June — the same time Mr. Earley’s appointment is up.

Ms. Jacques, however, notes: “But Earley’s departure needs to happen now, even though Snyder thinks he did a good job getting Flint out of debt and that he’s tried to do his best for Detroit schools. Earley has also defended his record in Flint. In a guest column for this paper in October, he wrote: ‘Contrary to reports in the media and rhetoric being espoused by individuals, the decision was made at the local level, by local civic leaders.’ Mr. Earley says the decision to move to Flint River water was approved by the mayor and City Council months before he was appointed emergency manager in the fall of 2013. That may be accurate. But Mr. Earley was in charge when the actual implementation took place. And the buck stops with him and Snyder. What’s happened in Flint is tragic, and the outrage around the state and country is still building. That makes Earley toxic. Snyder may not like it, but he has to get tough and do the politically expedient thing. If he wants his plans for Detroit Public Schools to come to fruition, Earley needs to step aside.”

Meanwhile, in the Capitol, long-awaited legislation overhauling Detroit Public Schools was introduced yesterday which would, if enacted, put an elected school board back in power next year, but abandon an effort to subject charter schools to the same governance as the city school district. A two-bill package introduced in the Senate would provide for a $250 million transfer from the state’s general fund to start a new debt-free school district in Detroit. The package, however, does not address DPS’s $515 million operating debt. Under the proposed legislation, Detroit voters would elect a new city school board next November following the appointment of an interim board charged with starting a debt-free school district. The new Detroit Community School District’s board would be composed of seven members elected by City Council districts and two at-large members. Gov. Rick Snyder and Detroit Mayor Mike Duggan would get to jointly appoint the nine-member interim school board with five and four appointees, respectively.

The legislation does not include Gov. Snyder’s earlier proposal to create a Detroit Education Commission with power to open and close any public school operated by DPS or independent charter schools. Republican lawmakers supportive of charter schools and the charter school lobby have been opposed to placing charters under the authority of a new commission. Mayor Duggan, who not only holds sway with city legislators, but also still wants a citywide commission that could “establish a single standard of performance for all public schools in Detroit — district and charter,” said: “We will keep working on this issue until we have a framework for an educational system in Detroit that consistently provides our children with the quality education they deserve.”

The initial bills introduced yesterday, however, do not address how to relieve the DPS operating debt that has piled up since 2009 under the watch of state-appointed emergency managers. Unsurprisingly, there is little enthusiasm in Lansing to ask state taxpayers to bail out DPS at the expense of Michigan’s other 1.5 million schoolchildren. So while Gov. Snyder has asked legislators for $515 million to pay off DPS operating debts, unpaid pension obligation debts, and overdue vendors’ bills, he has also requested another $200 million for transition costs associated with creation of the proposed new school district.

The politics, however, are difficult—especially as weary lawmakers are apprehensive not just about syphoning more taxpayers’ funds to Detroit, but also the wave of mass teacher sickouts in the city which have caused schools to close over the past two weeks: Sen. Phil Pavlov (R-St. Clair Township), who chairs the Senate Education Committee Wednesday said he is drafting legislation that would treat mass sickouts as a form of illegal strike and levy sanctions against teachers, including a possible suspension of their state teaching certification. Even one of Detroit’s own delegation, State Rep. Harvey Santana (D-Detroit) said he would not vote for bailing out DPS until philanthropic foundations pushing for the overhaul commit more money to tackling the underlying poverty that affects Detroit schoolchildren: “I cannot put up a vote for $715 million to send all this taxpayer money to Detroit to deal with this issue, unless I see that there’s going to be a larger, comprehensive plan to deal with the issues that are walking into these schools with these kids…The system will all fall apart. I don’t care how you restructure, reorganize it or who you put in charge…“It’s all going to fall apart, because the deeper issues are just festering.”

Unpower Ball. The New Jersey Division of Gaming Enforcement Wednesday reported that Atlantic City’s casino operators lost 6.5% in revenue last year compared to 2014. The depressing numbers came out as the state is contemplating the opening of new casinos in other parts of the state—casinos which many fear would accelerate the adverse revenue impact on Atlantic City, where four of its 2 casinos were closed in 2014: the Atlantic Club, Showboat, Revel, and Trump Plaza; the remaining eight casinos took in $2.56 billion in 2016 compared to $2.74 billion the previous year—with Trump Taj Mahal experiencing the biggest decline last year, falling 16.5% to $180.2 million. Moody’s on Wednesday reported that revenue at Trump Taj Mahal, Bally’s Park Place, and Caesars and has cumulatively declined 9% the last two years—adding that the state’s proposed casino expansion into the northern part of the state is a potential credit negative for Atlantic City.

Gov. and GOP Presidential candidate Chris Christie, along with state legislative leaders on Monday announced plans to introduce a bill that would allow voters to decide whether to amend New Jersey’s constitution to permit two new casinos outside Atlantic City: The proposed legislation, which must be approved by three-fifths of each house of the Legislature in order to be on the Nov. 8th ballot, would allow two casinos that would have to be located at least 72 miles from Atlantic City—a legislative initiative which Moody’s characterized as “particularly bad news for the already struggling Atlantic City gaming market, which has seen gaming revenue decline about 7% for the year through [November 30, 2015] over the same year-ago period…In our view, the additional competition will likely cause more casinos to close, which would be credit negative for Atlantic City,” adding that revenue in three Atlantic City casinos—Bally’s Park Place, Caesars, and Trump Taj Mahal—has cumulatively declined 9% over the last two years, whilst four of Atlantic City’s 12 casinos were closed in 2014. Should such a constitutional ballot be approved this November, Moody’s expects a new casino in northern New Jersey could be up and running by the end of 2019. Details such as tax rates for the new casinos and revenue sharing agreements for Atlantic City remain to be determined.


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