Education Funding

Detroit Schools May Go Broke, State Overseer Says

By The Associated Press — June 30, 2009 1 min read

The financial situation of the Detroit Public Schools is so bad the district may have to file for bankruptcy, a state-appointed overseer said Monday.

Robert Bobb said the district will enter the next school year with a deficit of about $259 million, down from the projected $430 million deficit.

He said he couldn’t make the needed cuts by the end of June.

“To solve the sins of the past ... the budget cuts would be too radical,” he said at a budget presentation.

The deficit will force an increase in the planned job cuts from 1,766 to 2,451, Bobb said.

A draft of the budget for the coming fiscal year calls on labor unions to accept larger high school class sizes and about $137 million in cost-saving measures. The measures could include unpaid furloughs and health benefits cuts.

Bobb already has said 29 schools will close permanently by the fall to cut costs.

To gain revenue, he said he will seek to sell more closed schools and rebid contracts, according to Detroit News.

He said he expects to adopt the deficit budget by Tuesday and that an amendment will be filed in August and as state budget projections change.

The district is planning a $500,000 student retention campaign to try to counter funding losses based on declining enrollment, expected to fall from about 94,054 to 83,777 students.

“We need revenues,” Bobb said.

Keith Johnson, president of the Detroit Federation of Teachers, declined immediate comment on the budget, telling the Detroit Free Press he was meeting with Bobb to go over it “line by line.”

Michigan’s largest public school district has overspent its budget for the past seven years.

Bobb was appointed in January by Gov. Jennifer Granholm.

Since March, Bobb has closed 29 schools, cut central office staff and dismissed 33 principals.

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Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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