DETROIT (AP) — Michigan lawmakers trying to glue together a plan to fix Detroit Public Schools using taxpayer money are staring down more than a decade of failure with what was once among the largest public education systems in the nation.
It's a story that stretches back to the 1990s, when poor academics, abhorrent graduation rates and low test scores opened the door for the state to wrest control from an elected school board. The district was set free in 2005, but budget missteps, corruption, financial mismanagement and enrollment losses ushered in the current state oversight — yet debt and deficits continue to rise.
"It hasn't worked. It clearly hasn't worked," Juan Jose Martinez, a Detroit school board member in the late 1990s, said of state oversight. "It's a shame things are in the condition they are in. ... I'm a man of faith and I have to keep praying that it's going to get back on solid footing."
The latest of five state-appointed financial managers has said the district can't continue unless legislators pitch in to pay off the debt and include funding to allow resources to be directed back to classrooms.
With encouragement from Republican Gov. Rick Snyder, the state Senate has approved a plan to pay off the district's estimated $467 million debt and provide $200 million in transition funds for a new, separate district that would educate students and have its finances overseen by a commission of state appointees. The plan effectively commits Michigan to a decade of new spending until the old DPS debt is retired. The House version would pay off the debt and provide $33 million for transition costs.
"We recognize that the future of Detroit's schoolchildren is on the line," said Republican Rep. Al Pscholka, House budget committee chairman. "There's never been an indication ... that we would not help the children of Detroit. It doesn't matter to me today who's to blame. Assigning blame doesn't solve it."
In the late 1990s, then-Gov. John Engler, a Republican, wanted to intervene in districts where more than 80 percent of students failed the state proficiency test or the dropout rate was higher than 25 percent. The state said the graduation rate of the 180,000-student Detroit district was about 30 percent; district officials said it was closer to 52 percent. Its school board eventually was replaced by a reform board.
Detroit was "not performing to levels they needed to do justice to kids in those schools ... parents felt completely abandoned by the system," said Republican U.S. Rep. Mike Bishop, who was then a state senator. "It was an absurd outcome that no elected member of government who represents human beings would ever ignore."
But parents began sending their children to public charter schools or suburban schools — something that contributed to current financial problems.
"We lost 11,000 students almost immediately as a direct result of the takeover," said LaMar Lemmons, a current school board member and Democratic state representative in 1999 who opposed state control. "Many middle-class parents weren't going to be in a district that was so bad that the state had to come in."
By 2003, enrollment was down to 150,000 students. Five years later, it dipped to 91,000. There are now 46,000 students, and millions of dollars in state per-pupil funding has been lost.
The state returned control to an elected board in 2005, even though Detroit students still ranked among Michigan's worst on standardized tests, the district was $48 million in debt and had a $150 million budget shortfall.
"There was never anything pointing to this financial crisis" before the takeover, said Martinez, who with other school board members were forced from office in 1999. "When we left office, I remember them saying we had a $90 million surplus."
By 2007, the FBI had opened a corruption probe. Later, it came to light that some vendors billed the district for unperformed work and services. One long-time vendor, Norman Shy, pleaded guilty Wednesday in federal court to receiving $2.7 million as part of a kickback scheme in which some principals and an administrator issued bogus orders for supplies.
District officials, including the school board, also had problems keeping track of how much money was coming in and what was owed. The state determined in 2009 that finances were so poor that a state-appointed emergency manager was needed to bring things in line.
Academics are improving as some test scores have inched up and 4-year graduation rates moved over the past decade from 58 percent to 77 percent. Fiscally, things couldn't be worse: The state hired retired bankruptcy Judge Steven Rhodes in February to complete the job that four other emergency managers couldn't. If the Legislature's plan is approved, a locally elected board could regain control by next year, though a financial review commission still would oversee finances.
But state control over Detroit's schools has failed, said Craig Thiel, of the Citizens Research Council of Michigan, a nonprofit policy research group.
"The model is focused almost exclusively on the finances and has very little to do with the academics," he said. "If you don't give time for academic reforms to work, the revenue comes down too quickly."
Associated Press writer David Eggert in Lansing contributed to this story.