Detroit May Close Half of Its Schools to Pay for Union Benefits

A report from the Detroit News Monday suggested that without government aid, the city of Detroit will be forced to close down nearly half of the city’s public schools in the next two years. Additionally, the paper warns that average high school class sizes will swell to 62 students by the following year.

These startling statistics were laid out in a deficit-reduction plan filed with the state of Michigan by the city’s Emergency Financial Manager Robert Bobb. Bobb’s role is working to slash the $327 million deficit the Detroit school district has accrued over the years.

According to the Detroit News, Detroit Public Schools considered filing for bankruptcy in 2009 but declined. In the past year alone, debt in the district has increased by more than $100 million, brought on by a “mix of revenue declines in property taxes, reduced state aid, declining enrollment and an unplanned staffing surge this past fall.”

While Bobb and DPS administrators have a lot to account for, noticeably absent from the discussion is the role of the teachers unions.

As students suffer amidst increasing classroom sizes and declining school choices, the district’s teachers stand to earn higher salaries. The city’s contract with the Detroit Federation of Teachers requires payments for teachers whose class sizes exceed specified maximums. So while Bobb demands increased class sizes to save the district money, the district is simultaneously estimating the move will create $10 million in additional costs to pay teachers’ oversize class pay over the next four years alone.

A recent op-ed in the Wall Street Journal also notes the city’s decaying public school system:

“Additional savings of approximately $12.4 million can be achieved from school closures if the District simply abandons the closed buildings,” the proposal explains, purging costs like boarding up buildings, storage and security patrols.

Steven Wasko, a spokesman for Mr. Bobb, said that urban property sales have been difficult, in part because until recently the state board of education banned transactions with “competing educational institutions” like charter schools. Once buildings are deserted, even if the doors and windows are welded shut with protective metal covers, scavengers break in and dismantle them for copper wire, pipes and so on.

Under the emergency plan, consolidated high-school class sizes would increase to 62 by 2014, “consistent with what students would expect in large university settings.” Yet under the terms of the Detroit Federation of Teachers contract, the district must pay bonuses for class enrollment over 35, thus imposing some $11.1 million in new costs through 2014.

Note that this dispensation carries about the same price tag as the school abandonment windfall: In other words, Detroit may end up destroying serviceable capital assets so it can pay its public workers more over the short term.

Mr. Wasko cautions that the school closure plan is a last resort, and Mr. Bobb has floated other ideas, including a financial restructuring similar to the GM bailout/bankruptcy. Detroit Federation of Teachers president Keith Johnson rejected even that because “The children of Detroit are not consumed products of a profit-driven corporation like a car,” as he wrote in an op-ed this week. Maybe his real objection is that the GM model might allow the district to rationalize its labor liabilities.

The budget gap is party due to the property tax revenue collapse as the Motor City crumbles, as well as financial mismanagement and a surge in pay and benefits for public employees. The Mackinac Center, a state think tank, reports that average Michigan teacher salaries outpaced those of all other states from 2003 to 2009, when adjusted for state per capita income as a proxy for the local ability to pay.

It’s hard to think of a sadder commentary on a government so fiscally desperate and so captured by its workers that it may be forced to abandon property to thieves. But are they the scavengers or the union?

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