Budget & Finance

Mich. District Hires Edison To Manage Its Schools

By Darcia Harris Bowman — February 23, 2000 2 min read
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Unable to stem a steady exodus of students from their classrooms, leaders of a small urban district in Michigan decided last week to hire Edison Schools Inc. to run all of their schools.

A five-year contract between the Inkster, Mich., school board and the for-profit school management company is expected to be made final next month. The arrangement, under which Edison will manage everything from the district’s finances and staffing to curriculum development and instruction, follows now-defunct systemwide arrangements in two other districts that involved for-profit companies.

“There was the unmistakable sense that history was being made,” said David Arsen, a professor of political economy at Michigan State University who researches school choice and witnessed the board’s 5-1 vote.

While a growing number of districts are hiring private companies like Edison to run individual schools, only two other than Inkster have turned to them for systemwide management. In both cases, the results were mixed.

Public Strategies Group Inc. served as the Minneapolis district’s superintendent from 1993 to 1997. Education Alternatives Inc., now called Tesseract Group Inc., controlled the Hartford, Conn., district’s budget from 1994 to 1996.

‘Ripple Effect’

Turning to a private company was not Inkster’s first choice. But fearing a state takeover, district leaders believed they had no other options.

Inkster lost 15 percent of its enrollment between fall 1998 and fall 1999, and fewer than 1,500 students remain. The district had a $1.9 million budget deficit going into this year, out of a total budget of $12.8 million, but the state refused to approve its plan to reduce its shortfall.

“With that loss of students over the last year and the decrease in revenue that went with it, everything we’d done to improve our financial situation was gone,” interim Superintendent Terry Ann Boguth said last week.

The decline of the district in a predominantly black suburb of Detroit is being blamed on a number of problems—dismal test scores and attendance rates, population decline, a stagnant real estate market, and changes in state law that prevent districts from increasing school taxes, to name a few. (“Facing an Uncertain Future Under Choice,” Sept. 29, 1999.)

But some observers point to school choice as the deciding factor. Inkster parents can move their children out of the district and into any one of eight nearby charter schools. Under state law, students can also transfer to traditional public schools in other districts with open enrollment.

“This is the ripple effect at its best,” said Jeanne Allen, the president of the Washington-based Center for Education Reform, which supports school choice. Inkster “had been losing students for years, but charter schools pushed them over the edge.”

Enter Edison Schools, a publicly held, New York City-based company. Edison operates 79 schools in 35 cities, but this will be its first try at managing an entire district.

The company has promised to wipe out the Inkster district’s debt and plow $4.5 million into start-up costs, such as new curriculum materials, computers, facility improvements, professional development for staff members, and employee-separation costs.

Deborah M. McGriff

“We have multiple goals,” said Deborah M. McGriff, an executive vice president of Edison. “We want to improve the academic performance of the students who are there.

We want to improve the fiscal stability of the district. And because they have lost so many children to other choices, we want to improve enrollment.”

A version of this article appeared in the February 23, 2000 edition of Education Week as Mich. District Hires Edison To Manage Its Schools


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