Vicious vigorish

Lansing’s red tape is stifling Detroit’s ability to service tens of thousands of low-income children — and state Rep. Hansen Clarke, D-Detroit, is trying to do something about it. Currently, Michigan takes 40 cents of every Medicaid dollar slated for the state’s schools. The money is taken for “administrative” needs and goes straight into the state’s general fund, Clarke says. The Medicaid dollars — about $100 million a year — are intended to reimburse schools for federally mandated programs such as counseling, social work, and speech and physical therapy. Nationwide, states take an average of 10 percent of school Medicaid dollars for administrative costs, says Clarke, who’s seeking a state Senate seat. Last week, Clarke proposed amending the state budget to reduce Lansing’s take to 20 percent. Detroit especially is crossing its collective fingers in hope the measure passes. “It’s desperately needed,” says Bruce Elkins, Medicaid coordinator for Detroit Public Schools. “We have all these mandated services going back to the 1970s, without adequate resources to hire people and implement those services.” Elkins estimates that the district spends about $100 million a year to service 86,000 Medicaid-eligible special-education children. The city will get $10 million from Medicaid in the 2002-2003 school year for such services, Elkins says.

More than 50 percent of that cost is paid by Detroit taxpayers, he adds. “Quite honestly, it’s a very unfortunate situation. The state is denying the schools money that was intended for the schools.” Clarke learned of the situation after Detroit Public Schools announced layoffs earlier this year. He began digging around to find ways to generate more money for the district so employees could keep their jobs and improvements could occur. At minimum, the reduction for administrative costs must be made, he says. “The state is actually undermining the schools’ efforts in places like Detroit to improve services for kids,” says Clarke. “And I don’t think anyone can justify a 40 percent administrative fee.”

Lisa M. Collins is a Metro Times staff writer. E-mail [email protected]
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