School Choice & Charters

Muskegon Heights Charter District Still Plagued By Financial Struggles

By Katie Ash — April 22, 2014 1 min read
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The Muskegon Heights school district in western Michigan, which was taken over by an emergency manager in 2012 and turned into an all-charter school district after facing severe fiscal and academic challenges, is once again struggling to pay its teachers and get out of debt, reports Michigan Radio, a National Public Radio affiliate.

The school district owes the for-profit company managing its charter schools, Mosaica Education, $2 million, says Mosaica’s chief executive officer, according to the article. The district delayed payments to teachers on March 30 and April 15 before the state of Michigan stepped in to cover the district’s payroll.

The district has been plagued with chronic financial problems. It amassed a $16 million deficit before the state stepped in and replaced the district leadership with an emergency manager. The new manager then dissolved the original district, made up of four schools, and signed a contract with Mosaica Education to operate the school system as a financially sustainable charter district. (Read the background on this unique arrangement here.) However, it seems as though those fiscal challenges have continued despite the change in governance.

The problems started from the very beginning of the new regime, when Mosaica Education invested $700,000 into building repairs so the schools could open on time for the 2012-13 school year. The company had only budgeted $150,000 for repairs. The company was also surprised by the amount of special education services needed, which again exceeded its estimated budget.

Compounding those fiscal challenges was also the fact that far fewer students than anticipated actually chose to continue attending the charter district. Mosaica expected about 1,100 students to attend, but the schools’ actual enrollment has struggled to reach 900.

Despite the district’s financial woes, Mosaica recently released academic data from the district that shows improvements in the schools’ achievement on state tests.

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A version of this news article first appeared in the Charters & Choice blog.