After 10 Years of Deficits, How One District Escaped Being Dissolved

For years, Ecorse Public Schools was a poster child for claims of ineffective oversight of school finances by the Michigan Department of Education.

Despite laws that require school districts to balance their annual budget, and rules that require offenders to eliminate deficits within two years, Ecorse spent more on operations than it collected in revenue for 10 consecutive years. Only one other school district has managed to stay out of balance for as long (New Haven Community Schools in Macomb County).

But by June 2015, the district had eliminated its $661,000 deficit and projected a positive balance — $343,000 — for the first time in a decade.

What happened?

Ecorse Public Schools Superintendent Thomas Parker said the district’s employees regarded it a wake-up call when in 2013 two fiscally failed school districts were dissolved by the state. The Inkster and Buena Vista school districts ceased to exist, with their students and property assigned to adjacent districts.

Parker said Inkster's plight hit home the hardest because it was just 12 miles away. Inkster was dissolved after years of spending more than it took in had generated a debt of $12.8 million debt 2011-12.

“They are a neighbor,” Parker said about Inkster. “The things that happened in Inkster raised the sense of urgency.”

Parker took over as superintendent in June 2013. He said the district’s previous two deficit-elimination plans (submitted before he arrived) were rejected by the Michigan Department of Education because they didn’t do enough to bring spending in line with revenues.

Parker said fears of an Inkster-like dissolution spurred employees to grant the concessions necessary to get the district back in the black.

“The level of commitment from our collective bargaining units in the district was wonderful,” Parker said. “Everyone understood the sense of urgency and everyone came to the table to make the necessary sacrifices. If nothing else, that is our story. The sharing of sacrifice on behalf of the adults to move the needle for kids.”

State data on school salaries shows that some Ecorse employees took pay cuts as steep as 4 percent while others received increases of 1 percent or less in 2014-15.

Ecorse also benefited from an influx of students, which under Michigan’s school finance system also meant a big revenue increase. When Parker arrived in 2013, enrollment had fallen from 1,042 in the 2012-13 school year to 899 in 2013-14. But in the 2014-15 school year, enrollment has increased to 1,037. This year, it is 1,092.

At the same time, the district saw operational revenues go from $9.7 million in 2014 to $14.1 million in 2015, a 45 percent increase. From 2014 to 2015, state aid increased by $1.1 million and the district also got an additional $3.3 million in federal money.

Parker said the district is now more responsive to parents, which is also helping enrollment.

For example, the district only offered eighth-grade classes at the high school. Parker said he noticed a drop in enrollment after seventh grade. Parents didn’t want their eighth-graders going to the high school. So now the district offers eighth grade at the middle school, which has resulted in almost tripling the number of eighth-graders enrolled in the district, from 30 in 2013-14 to 80 in 2015-16.

“We offered options to parents so we can better serve the needs,” Parker said.