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Michigan orders DPS to make huge cuts
Bobb told to consolidate services, close half of schools to end deficit
Swift and severe changes are coming to Detroit Public Schools.
State education officials have ordered Robert Bobb to immediately implement a financial restructuring plan that balances the district's books by closing half of its schools, swelling high school class sizes to 60 students and consolidating operations.
...The district needs $219 million by March, and its bond insurer, Assured Guaranty Municipal Corp., wants the state to guarantee DPS won't file for bankruptcy. Bobb told lawmakers the district has no such intentions.
Bobb has said school closures, bigger classes and other measures would be needed if he cannot get help from lawmakers to restructure finances in the state's largest school district. DPS considered but declined to file for bankruptcy in 2009 Experts say DPS has an uphill battle for financial stability.
Revenue is down dramatically, enrollment losses average 8,000 students a year and pension and health care costs weigh on the district.
And the bad news continues. Among DPS' fiscal challenges: An expected loss of $273.87 in its per-pupil foundation grant of $7,660. The loss is the result of a projected 83 percent property tax collection rate in Detroit for fiscal 2011. Last week, Gov. Rick Snyder proposed a $470 per-pupil cut for all Michigan districts.
A general fund budget strapped with annual fixed costs such as $52.6 million in pension costs, $44.6 million for health care, $26.8 million in utilities, $6.6 million in public safety and $3.5 million in unemployment. Continuing enrollment declines. DPS has lost 83,336 students in the last decade, leading to a loss in state aid of more than $573 million.
The district's deficit grew by $100 million in the last year — to $327 million — forcing it to deepen its reliance on short- and long-term borrowing, which costs DPS $55 million a year in principal and interest payments.
Originally posted by Sphota
The most disturbing news: SIXTY students to a classroom. What a joke. Good luck graduating anyone with a quality education under those circumstances.