News Story

Dissolved School District Repeatedly Overspent Despite Deficits

Dems blame Gov. Snyder, but Inkster approved 14 percent raises and paid 100 percent of health insurance

When it comes to why Inkster Public Schools was dissolved, there has been plenty of finger pointing among politicians and school administrators.

In a 2012 deficit elimination plan it submitted to the state, Inkster school officials blamed part of the fiscal debt on a previous emergency financial manager who had been gone for seven years and had left the district debt-free.

Recently, some Democratic lawmakers have blamed Gov. Rick Snyder for Inkster's woes with one state representative saying the school board had to clean up "the mess he (Gov. Snyder) made," and another saying Inkster was part of a larger "epidemic" public schools were facing.

But the most recent teacher's contract sheds some light on the problems the district had handling its own costs.

In August 2009, Inkster was in its third consecutive year of a growing budget deficit that had escalated from $1.9 million two years previous to $10 million at the end of the 2008-09 fiscal year. Still, the school board approved a three-year deal with teachers that included some raises as high as 14.2 percent as well as the district paying 100 percent of the health care premiums for teachers and 100 percent of the deductible.

The contract also paid teachers $2,600 if they waived their health insurance coverage for a year. And if that employee were to re-enroll for the district's health insurance "due to a substantial life event" they didn’t have to return the $2,600.

Meanwhile, Inkster's per-pupil, general fund revenues (including local, state and federal dollars) had increased 9 percent from $9,177 in 2008-09 when the previous contract had expired to $10,004 when the new three-year deal expired in 2011-12. Enrollment dropped from 3,246 when the contract was signed to 2,660 when it expired. Inkster’s deficit increased to $12.7 million in 2012.

"This is just another example of school boards putting the adults ahead of the kids," said Rep. Pete Lund, R-Shelby Township, in an email. "When people are looking for who to blame for the Inkster schools, I hope they closely look at these contracts and the roles they played in the financial downfall of this district."

Rep. David Knezek, D-Dearborn Heights, called Inkster's problems part of an "epidemic" in Michigan schools, according to an article on MLive. 

"According to the Michigan Department of Education, there are currently 163 school districts in Michigan that fall within three different scenarios: they ended the year with a greater deficit than when they began; they ended the year with a deficit after beginning with a balanced or surplus budget; or they have less than a 5 percent operating fund balance," Rep. Knezek said in an email. "When almost 30 percent of the school districts in Michigan are near or within a situation of financial insolvency, it's more than just an issue of  'mismanagement.' Decreased enrollment due to the proliferation of online and charter schools, coupled with a $2 billion cut to public education in the last two years has done little to help our public schools make ends meet."

The School Aid budget was not cut $2 billion over the past two years. It decreased from $12.98 billion in 2010-11 to $12.75 billion in 2011-12, a reduction of about $235 million. In 2013-14, the state is expected to spend $13.37 billion on the School Aid budget. At the same time, Michigan public schools are serving fewer students, down 2.5 percent since 2011. 

Sen. Hoon-Yung Hopgood, D-Taylor, criticized Gov. Snyder for not attending a meeting regarding the dissolution of the district and said in a press release: "Instead of attending the meeting, as he was invited to do, the governor is nowhere in sight as he leaves the school board to clean up the mess he made, and answer to the parents and community who are understandably upset about this dissolution."

Sen. Hopgood didn't respond to a request for comment.

School district mismanagement should not be used as an excuse for more funding, said Audrey Spalding, director of education policy at the Mackinac Center for Public Policy.

"Several Michigan school boards are making the ill-advised decision to spend down their operating fund balances instead of making tough choices that are in the students' best interest," Spalding said. "Inkster's contract is an example of the financial danger a school district can put itself in."

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

News Story

School District Settles Lawsuit Over School Supplies Fees

Birmingham Public Schools has agreed to settle a class action lawsuit filed on behalf of parents who paid fees for registration, locks and school supplies. 

Parents who paid fees for the 2010-11, 2011-12 and 2012-13 school year must complete a form and submit it to the school district within 90 days of July 3.

Michigan law says that school districts are responsible for supplying students with necessary supplies.

Mark Wasvary, the attorney who represented the parents in the lawsuit against the school district, declined to comment.

The settlement notice states that the parents in the lawsuit received no compensation other than the school district paying $10,000 for their costs and attorney fees. The district contends it did nothing wrong. Birmingham Public Schools Spokeswoman Marcia Wilkinson said in an email the district no longer charges for any of the things listed in the lawsuit.

The district agreed to abide by the Michigan Department of Education guidelines regarding student fees.

The MDE states that schools may not charge for towels, locks and lockers and must provide pencils, textbooks and periodicals if required for classroom use.

Other districts have also attempted to get parents to pay for some school supplies. 

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See also:

School Districts Cannot Require Parents To Buy School Supplies

Can School Districts Require Parents To Buy Necessary School Supplies?

Back-to-School Shopping

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.