How Can Learning from the Past Enrich the Fiscal Future?

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eBlog, 1/11/17

Good Morning! In this a.m.’s eBlog, we consider the post-election, post-chapter 9 governing future for Stockton, before heading to the wintry streets of Detroit, where the transfer of authority and governance of the Detroit Public Schools from state back to local control in the wake of the system’s previous physical and fiscal insolvency will make for a steep learning curve—but where getting it right will be invaluable for Detroit to have a sustainable fiscal future.

A New Post-Bankruptcy Beginning. A ceremony in the heart of downtown Stockton this week marked the beginning of a new era in post-bankrupt Stockton’s municipal governance with the swearing-in of Mayor Michael Tubbs and City Council members Jesaos Andrade, Susan Lenz, and Dan Wright.  Mayor Tubbs had chosen his grandmother, Barbara Nicholson to ceremonially swear him in—after, five years ago, being sworn in by his mother in the wake if his first election to the city council in November 2012. The City’s spokeswoman, Connie Cochran, said the election of Mayor Tubbs, the youngest mayor ever in a large American city and Stockton’s first black mayor, continues to receive national media attention. Mayor Tubbs appointed City Councilman Elbert Holman as his Vice Mator, replacing the previous Vice Mayor, District 5 Councilwoman Christina Fugazi, stating: “[Ms.] Holman is an exemplar of a public servant, whose experience as a law enforcement professional and 8 years of service as a councilmember will serve the city well…” adding: “I look forward to the work we will do together. We have a unique opportunity to make a real difference in our All-America City.”

Detroit’s Future Academic Solvency. Michigan Senate Education Committee Chairman Phil Pavlov (R-St. Clair) yesterday called for the repeal of the state’s so-called “failing schools” law, with his call coming as Gov. Rick Snyder’s administration is completing plans to shut down some chronically underperforming schools. Chairman Pavlov said the “goal posts” for struggling schools have too often moved under existing state law, which was developed under what he called a “heavy-handed” federal education policy that has changed considerably in recent years. At the same time, Michigan has adopted a new standardized test for students. Thus, Chairman Pavlov said the School Reform Office has used multiple “accountability measurement systems” for schools that land on the lowest-performing list, noting: “These districts don’t know how the data is going to be used, and so it’s creating a lot of confusion.” Stating that academic failure “must not be tolerated,” the Chairman told his colleagues that the current process for addressing the system’s failures is “deeply flawed,” and warned it has caused “great anxiety” for education officials across the state—as he announced plans to introduce a repeal bill today when the session resumes with the first day of the new two-year session, so that he can help initiate a public conversation over a potential replacement law. Nevertheless, the Senator stopped short of recommending the Governor halt any planned school closures, adding he wants the Governor’s office to be a “partner” in developing a replacement—even as he warned the law has created “confusion among all the parties that are administering this, including the school districts…We heard an announcement last August that up to 100 schools could be closed…Well, what is the process and how do you get to that point? I’m not interested in protecting schools that can’t deliver, but we have to have something everybody understands, metrics people can work toward for achievement and not be subject to on-the-spot discretion.”

Under the state’s current law, Michigan created a process by which the state has authority to close schools which perform among the state’s bottom 5 percent—or the state can mandate another form of intervention, such as the appointment of a chief executive officer. Finally, of course, the Governor can invoke the state’s notorious Emergency Manager law to appoint, as Gov. Snyder has done for the Detroit Public Schools (DPS)—where, as we have reported—in the wake of such appointments, the last being the recently retired former U.S. Bankruptcy Judge Steven Rhodes—an appointment which the state followed with last year’s $617 million state bailout of DPS with new state law which mandates the Michigan School Reform Office to force closure of any city schools which make the list three years running unless it would “result in unreasonable hardship to the pupils.”

Demonstrating how challenged DPS is, of the 124 Michigan schools which fell in the bottom 5 percent for academic performance last year, 47, or more than one-third, were DPS schools. (The Michigan Department of Education will release a new top-to-bottom list of academic performance by the end of this month, after which Michigan School Reform Officer Natasha Baker will subsequently lead a review of the bottom 5 percent of schools.) Getting the schools up to snuff matters: The current median household income for Detroit is $53,628: real median household income peaked in 2005 at $61,638 and is now $8,010 (13.00%) lower; nevertheless, from a post peak low of $51,606 in 2011, real median household income for Detroit has now grown by $2,022 (3.92%). Thus, continued progress in school improvement is likely to be telling in terms of attracting families with kids from the city’s suburbs and creating a fiscal foundation for Detroit’s future. 

New Governance. The events in Lansing come even as school governance is set to revert from state to local control, with a big crowd anticipated—notwithstanding brutal winter weather—tonight to attend Detroit’s first fully empowered school board in seven years—where the new board will elect officers, set bylaws, and hear a presentation from the interim superintendent. , according to meeting agendas posted online. Thus, even as the new session of the Legislature is meeting, the new school board in Detroit will confront the challenge of trying to shore up—fiscally and educationally—a 45,000-student district which has been in fiscal, physical, and governing turmoil for years under state control. Now, in the wake of last June’s $617 million state bailout and financial restructuring of DPS, the stakes are high for the Detroit Public Schools Community District. Indeed, new DPS board member Deborah Hunter-Harvill likely hit the nail on the head when, last evening, she said: “I’ve been engaging in dialogue and activities with six very astute individuals that seem to care a whole, whole lot about children…I know that this could be the last chance we have to get it right. We will be focusing on that.”


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