Detroit Public Schools EM shifts funds

Starving our schools

Jul 15, 2014 at 4:58 pm

Many of us are shocked to learn that DPS plans to cut costs in the coming year by further increasing class sizes. Already at an unmanageable target of 38 per classroom in grades 6 through 12, Emergency Manager Jack Martin’s fiscal year 2015 budget allows class sizes in those grades to expand to 43. 

I know firsthand the ways overcrowded classes affect individual learning and a teacher’s ability to build meaningful relationships with students. As a ninth grade urban public high school social studies teacher in New Orleans, I witnessed how the fundamental contour and feel of the class shifted when second period’s 22 students were replaced by third period’s 37 14-year old bodies. The intimacy and interactivity of four to five students clustered at a table changed to a reorganization of the desks so that all those bodies could fit — with all chairs lined up facing the front. 

In this changed environment, valuable interactions among small groups of students became impossible, and the style of classroom pedagogy shifted from engaged, hands-on learning to passive absorption (or active resistance to) teacher-centered lecture.

And that was “only” 37. It’s hard to even imagine what 43 must feel like. As class size increases, I came to realize, even the best teacher drifts from a focus on creating high quality learning experiences to the immediate imperative of crowd control.

Today, as an educational researcher and teacher educator, I am aware that what I knew firsthand as a teacher is borne out in research — that one of the two school-based factors that most reliably contributes to teacher and student success or failure is class size. The other is the experience of the teacher.

Of course, some will say that the DPS EM, in raising most class sizes to 43, is only making the painful but necessary sacrifices to finally bring the district’s finances into line — a goal that was, after all, the primary rationale for putting an EM in control.

But an exhaustive analysis I conducted of DPS spending since 2008 — the year before the state imposed its first emergency schools manager — opens new questions about the priorities and efficacy of emergency management. DPS budget and year-end financial statements, along with MEAP data from the Michigan Department of Education, show that neither finances nor academics have received the capable attention that the current moment necessitates.

One of the first things that I noticed in looking over eight years of district spending was that the proportion of general fund dollars reaching the classroom has declined under emergency management — and not just by a little bit! Spending on classroom instruction constituted 55 percent and 58 percent, respectively, of all general fund expenditures in 2008 and 2009 — the last two years that the elected board set spending targets. Since then, spending on instruction has trended downward, reaching a historic low with Jack Martin’s 2015 budget at a level of just 46.8 percent.

And while emergency management was to bring “business world efficiency” to the public sector, spending on central administration has actually received a growing slice of the pie. In all, the proportion of general fund spending earmarked for general administration (which includes only central administrative costs, and not business office and school-level administrative costs) is now 64 percent above the proportion allocated in fiscal year 2008, the last year DPS administration did not support an EM’s management team. 

Though the public was promised that emergency managers would drive more resources to the classroom, instead general (central) administrative cost per pupil has increased from just $75 per pupil in 2008 to $143 today.

But the dramatic decline in funds for the classroom has not just come from upwardly creeping administrative costs. Classroom money has also been diverted to debt service. Whereas the elected board only needed to allocate 1.7 percent to meet its debt obligations, the fiscal 2015 budget raises spending on debt service to a new height of 7.8 percent. 

This means that debt service payments have gone from costing just $212 per pupil in 2008 to $1,109 today.

Why was this five-fold increase in debt service necessary? There is a direct relationship between the legacy deficit the district carries and its annual debt service obligations. EM Robert Bobb, imposed by the state to address the district’s financial emergency, actually presided over the ballooning of the legacy deficit to a record $327 million.

Faced with the task of managing this legacy deficit, Gov. Snyder’s newly appointed EM in 2011, Roy Roberts, undertook measures that quickly lowered the legacy deficit — but mostly through acquiring new long-term debt, rather than through cost savings or increased enrollment. 

This and other new borrowing, overlooked by most press accounts, coupled with enrollment decline, have directly contributed to the increased loss of classroom dollars to debt service. And new deficit spending since then — which has raised the legacy deficit back to $125 million — has only compounded the financial misery.

As Robert Bobb argued correctly throughout his tenure, finances and academics are intimately related. If the district continued to bleed students because of poor academics, he argued, the financial picture would continue to grow bleaker. The enactment of a new EM law in the closing days of his administration gave him and subsequent emergency managers the control they demanded over both finances and academics.

Has authority over academics, in order to slow or reverse enrollment declines, worked? Actually, as my analysis reveals quite clearly, it has not. Under emergency management, the proficiency gap between Detroit students and their Michigan peers on the MEAP, as demonstrated in Chart D above, has widened considerably.

The impact on enrollment has, in turn, been predictable. (Robert Bobb was right about this relationship!) The closing of more than 100 schools under emergency management, coupled with worsening academic performance and the surrender of 11,000 students and 15 schools to the EAA, has furthered the cataclysmic decline in enrollment, at a rate of over 11 percent per year ever year since 2008. Fewer students, of course, means decreasing revenues for the district, while debt obligations remain constant. In essence, the debt is “parked” on fewer and fewer students every year, meaning that a larger portion of dollars intended for students in the classroom goes to debt instead.

Martin has, of course, claimed victory in stemming the tide of families leaving DPS by losing only 1,000 students this past school year. However, an analysis of enrollment trends proves this victory is illusory. When one takes the average decline of 11 percent per year experienced between 2008 and 2012 and extends that rate of decline through today, it shows that annualized enrollment loss has actually increased in recent years, with the district now having lost more than 4,000 students beyond an 11 percent decline curve.

This accelerated decline has been obfuscated by the creation of the EAA, which eliminated 11,000 students. At least 5,000 of those handed to the EAA are no longer with that failing district, as enrollment in the 12 schools directly run by the EAA has plunged to around 6,000. Many of those leaving the EAA have come back to DPS. In short, DPS did not decline as sharply this past year in large part because it gained back a large number of students it had just sent away. The slower rate of decline this year is directly related to the much faster rate of decline the previous year, with the net effect that the district is bleeding students, and the general fund dollars that each student represents, at an even greater rate than before.

With declining academics, enrollment, and finances, did Jack Martin do the right thing by increasing class size to 43 in most grades? According to his CFO, William Aldridge, the potential savings from increased class sizes is $6,708,000. That number brings to mind the $4,000,000 the district lost by not meeting the deadline for Head Start funding this year. 

But we should also consider the decrease in the proportion of funds going to classrooms in the new budget. The savings from increased class sizes represents 0.98 percent of the total 2015 budget. If the EM had simply not steered even more funds away from the historically low proportion for classroom instruction last year … if he had merely kept that piece of the pie constant, rather than bumping up other costs, the need to increase class size would have been almost totally eliminated.

In fact, last year’s DPS budget had been built by Martin’s predecessor around the assumption that the district would succeed in raising student enrollment by 5,000. At this time last year, many of us asked how the budget hole would be filled in the event that the enrollment increase the EM’s budget depended on did not materialize.

When the district celebrated only losing 1,000 students this past fall, it actually meant that the district now had a budget that depended on the per pupil funding of 6,000 more students than had actually enrolled. To fill that unsurprising budget hole, an obvious solution would have been to make commensurate cuts in all budget categories — from administration, to instructional support, to the classroom. 

However, the amended budgets from last year show that this is not what happened. Instead, Martin addressed the budget hole by taking a double share from classroom spending, while actually increasing the proportion that went to administrative costs.

So was the increase this year in class size financially inevitable? No. 

And what is the predictable effect of increasing class size to 43? Academic performance will continue to suffer, and even more parents will pull their children from the district. The financial situation will be exacerbated.

Perhaps it’s time to ask — has emergency management improved or worsened the condition of DPS? The evidence suggests that the district operated more efficiently, with greater academic results, under the elected board. Perhaps it’s time to reassess — maybe democratic control was not the main obstacle to improvement in Detroit Public Schools. In a city increasingly wracked by economic and social decline, perhaps democratic governance of schools, despite its hiccups and warts, was not the culprit.

Should this surprise anyone? For many of us, the belief in democracy and citizen participation in governance is foundational, in part because we believe that the people who are most affected by the outcomes of a governing body’s decisions should be able to elect those who serve on that body. 

Electing educational representatives, as much as electing political representatives, is a way to protect the community self-interest from predatory interests. Democracy is not perfect, but it does contain mechanisms to help promote accountability. A board that is not responsive to a community can be petitioned. And without adequate redress, the electorate can “fire” board members in the next election cycle. 

Where is the accountability for the performance of emergency schools managers? They are only accountable to the governor, who ultimately holds responsibility for the results produced by his emergency managers. And how can he be made accountable? 

Dr. Thomas C. Pedroni is associate professor of curriculum studies at Wayne State University and director of the Detroit Data and Democracy Project.