Democracy Tree: Run ’em like a business… right into the ground

by Amy Kerr Hardin

As the crowds of dissent gather, it is increasingly obvious what an utter fallacy it is that the elected leaders of Detroit Public Schools and the City of Flint somehow created the conditions under which they found themselves in a rolling state of financial disaster.

It is equally disingenuous to assert that, through the magic of cut-back management, they could possibly machete their way out of the woods. Herein lies the folly of Gov. Snyder’s enhanced emergency manager plan — the law’s simplistic Econ-101 mechanics simply ignore the real world of actual economic forces as they collide with the complexity found in the realm of public policy.

The “new and improved” emergency manager legislation, which supplanted Gov. Blanchard’s 1990’s circumspect version, surfaced within days of Snyder assuming office. It was the love child of two presumably well-educated officials. Snyder’s newly appointed State Treasurer Andy Dillon, a Democrat of sorts, boasted degrees in both accounting and law from Notre Dame, and his enabler-in-chief, the governor, studied economics at the University of Michigan. Yet, the two vaunted academic luminaries produced a sophomoric boondoggle of an offspring — for which Michigan citizens will pay in both their personal health and their dwindling tax dollars for decades to come. That, in a nutshell, is the Snyder legacy.

In a rare event these days, Michigan learned some good news last week — the dire straits of Detroit Public Schools will be evaluated by an individual of superior intelligence and compassion — the recently retired Judge Stephen Rhodes, who so skillfully guided the bankruptcy in Detroit to a conclusion which no emergency manager could have brokered. Rhodes, who will not be an emergency manager, will act in a strictly advisory capacity. He has his work cut out for him once again.

Here’s a shortlist of the most salient factors contributing to the DPS quagmire that Rhodes will be reviewing.

After Snyder’s parade of state-appointed emergency managers since the onset of his new law, the school district’s deficit has ballooned from $83 million to a whopping $335 million this year. Legacy cost debts currently clock in at $440 million. All this, while DPS continues to hemorrhage students, and the revenues they bring with them. Factor in the district’s rock-bottom academic performance, and the nightmarish conditions found in many of the schools — and it’s no wonder families are fleeing the district in record numbers.

Enrollment Decline — By an Order of Magnitude

The Citizens Research Council of Michigan has compiled some of the more damning facts and figures illustrating the devastation wrought through Lansing’s bad public policy decisions and cruel revenue withholding practices.

While the overall student population across the state decreased by about 11 percent from 2003 to 2014, DPS enrollment was in free fall — losing 70 percent of their students during that same time.

Much of the enrollment loss is attributed to the ascendance of school choice options. Some students enrolled in neighboring districts, but the vast majority were lured by the false gods of the charter school movement — with the help of the Michigan legislature, who vastly expanded the ability of profit-driven charters to cash-in on the emergency manager’s fire sale of DPS students and assets.

The rationale behind the expansion of charters in the Detroit area is the faulty notion that competition in the public sector is a good thing — a familiar GOP theme under their agenda to run schools and cities like businesses. Well, the hand of the market has spoken, and it wasn’t the invisible kind — Moody’s downgraded the DPS credit rating in large part due to its declining enrollment with no mechanism in place to reverse the trend. From their 2015 report, they cite the following reasons for their decision:

…ongoing declines in enrollment that pressure operating revenue and the district’s capacity to reverse the negative operating trend… Absent enrollment and revenue growth, fixed costs will comprise a growing share of the district’s annual financial resources and potentially stress the sufficiency of year-round cash flow.

To offset the exodus, the brigade of emergency managers has been parting-out the district’s assets like an old Buick. DPS has been in the commercial real estate business for years now. The district actually has a staffed real estate division currently offering more than 100 properties, along with webinars for developers — the current “curriculum” includes short primers on how to acquire properties, become a developer, and negotiate a land contract on a DPS school. Their web page boasts they have generated over $12 million in sales and leases since 2009.

Just as with revenue sharing inadequacies across Michigan, lawmakers have not taken the necessary steps to keep in check the growth of, and evaluate the performance of its charters. DPS has become a feeding frenzy of unscrupulous charter operators. Donald Cohen of In the Public Interest, recently characterized the predatory tactics of Detroit charters as “rife with wasteful spending, double dipping, and insider dealing, and many have been allowed to operate for years despite terrible academic records.”

Corruption Thrives Under Emergency Management

Yet, it’s not just the charter menace bringing corruption and lack of oversight to the troubled school district, the emergency managers themselves, while charged with the task of fiscal oversight, have been similarly wasteful.

Since the inception of Snyder’s enhanced law five years ago, DPS teachers have undergone a 10 percent pay cut per year. News reports a few weeks ago from ABC/WXYZ in Detroit revealed that top executives in DPS, with emergency manager approval, were being awarded huge salaries — among the highest in the nation. The district’s current manager, Darnell Earley, who only has two weeks remaining at his post, explained to reporters that “I can’t speak as to why things are as I found them.” But the high-flying executive contracts bore his signature. And it wasn’t just the salaries that raised eyebrows — these same executives enjoy handsome benefit packages, with generous paid time off provisions.

Outrage. That’s the only word to describe the response of former DPS teacher, and current House Rep. Sherry Gay-Dagnogo’s (D-8) reaction to these revelations.

“Those people who are receiving those six-figure salaries, and above, need to really take into consideration what teachers are experiencing, what students are experiencing, every day in the classroom.

What are they doing to get salaries in excess of New York, Chicago, L.A. — these are districts that are thriving  with over 200,000 students. We have 47,000 students. What could they possibly be doing to earn that type of figure?

That’s wrong. That’s why we need checks and balances in place. That’s why we need a return to democracy.”

Rats, Mold, and the Decay of Legislative Incompetence

Will Dagnogo’s colleagues across the aisle take action for DPS then?

In short, no. Republican lawmakers have just the opposite in mind when it comes to public schools in the Motor City.

Frustrated with the state’s inaction over the deplorable conditions found in DPS buildings, teachers staged sickout protests and launched a social media campaign, posting hundreds of photos documenting what they’ve encountered everyday under state control.

The GOP response was nothing short of staggering in its level of immaturity. Instead of addressing the health crisis in Detroit’s schools, lawmakers retaliated with punitive legislation designed to prevent frustrated DPS employees from staging sickouts — the only tactic that seemed to be gaining any attention from Lansing after years of neglect. Senate bills 713, 714, and 715 would levy a $5,000 per day fine against union leaders, dock teacher pay, suspend their teaching licenses, and withhold school funding from districts that refuse to punish teachers.

This neglectful behavior is consistent with the findings of a 2016 report card on how states’ support their public schools issued by the Network for Public Education, a nonprofit founded by former U.S. Assistant Secretary of Education, turned activist, Diane Ravitch.

Lansing earned a “D” on education policy and funding. That’s an overall state grade, had NPE examined DPS in particular, we can be sure the grade would have been an “F.”

GOP lawmakers need to spend some time out in the hall thinking about what they’ve done.