Opinion

The Motor City’s much-needed tune-up

On his “Listening and Learning Tour” stop in Detroit last May, Education Secretary Arne Duncan called Detroit “New Orleans without Katrina.” The comparison makes sense; Motor City is plagued by many of the same afflictions of its pre-2005 Southern cousin: corruption, financial mismanagement, and a school system in ruins. The contrast falls short, however, in one important way: Starting over, especially in education.

Last year, Michigan Governor Jennifer Granholm appointed an emergency financial manager to take over Detroit Public Schools’ finances. Robert Bobb came into his appointment facing a $300 million debt, declining enrollments and profits, a graduation rate estimated by Education Week’s Research Center at under 30 percent, and a host of dilapidated and abandoned school buildings, left to rot as students moved out of the inner city.

Since he took office in March 2009, Bobb has made great strides in fixing the financial side of DPS. Some were straightforward, like making sure all the folks on DPS’ payroll actually worked for the district (they had to pick up their paychecks in person) or conducting an audit on the health care benefits for employees, through which he discovered that there were 3,492 more ineligible dependents, including some who were dead, on the rolls than originally estimated. Others have been more difficult, such as rooting out the corruption and theft that has run rampant in the district for many years. He created an Office of the Inspector General specifically for this purpose.

In July, Bobb announced that he was considering declaring DPS bankrupt under “Chapter 9,” the municipal version of Chapter 11. He would have been able to effectively shut down and restart the central office, renegotiate debt with district vendors, work out an unusual loan from the state, and make null and void all of the agreements held between district and its employees and contractors. The largest of those contracts, of course, is the one with the teachers’ union; Detroit union president Keith Johnson recognized the danger, commenting last summer that “In the worse case scenario it could completely void an existing collective bargaining agreement.”

In October, he was advocating for a special Chancellor’s district, similar to that of New York City’s, which would give him direct control over the lowest performing schools. He hoped to target seniority in these buildings in order to give principals more control over their staffs. Seniority, he told the Detroit Daily News, is the “Holy Grail for the union…. For us, it’s a monumental problem.”

And here’s where the New Orleans’ comparison again becomes relevant. Bobb had a historic opportunity to start DPS from scratch, legally at least. He would have been able to finally rid the district of the arcane practices, leftover bureaucracy, and corruption that had plagued it for decades. New Orleans had a similar opportunity, albeit not of its own choosing. Katrina was a terrible catastrophe for the city, but it did allow the school system, mired in corruption and ineptitude, to finally have the space to start again. And they did, with the creation of the state-run Recovery School District, which now operates along side the semi-obsolete Orleans Parish School Board and governs a majority of the students in NOLA schools.

This is not about state versus local control (a contentious issue in New Orleans today) or centralized district control over a school board model (RSD is the former, Orleans Parish the latter). Nor should we underestimate the difficulty and gravity of a school district declaring its insolvency. But some things are so far gone they cannot be fixed. And very few public bodies, school districts included, get the chance to start from scratch. In this case, this is a chance that should not have been missed.

Detroit parents, teachers, and community leaders were leery of bankruptcy. After all, only a handful of districts have ever declared Chapter 9 before. (Chicago Public Schools in 1979 and the district of San Jose, California in 1983 are the most known examples.) It remains largely unchartered territory. Then again, no district had every experienced the devastation of Katrina before either. But the state of education in New Orleans today is light years ahead of where it was before August 2005.

Instead of taking this opportunity, Bobb figured out another half-dozen ways to cover his deficit, including a deal struck with the Detroit teachers’ union in mid-December that will save the district $63 million over three years. The resulting collective bargaining agreement has been hailed by many, including the Wall Street Journal and American Federation of Teachers’ President Randi Weingarten, as a historic step forward for Detroit. In reality, it’s a perfect example of Bobb’s missed opportunity. (Johnson, again perceptive, told teachers that if they didn’t vote for the deal, they’d lose seniority, tenure, yearly increases, and other benefits.)

The crux of this “innovative” (says the Wall Street Journal) plan is that the union will defer automatic raises for teachers for the next two years, to the tune of $10K for each teacher. Teachers will have a few ways to recoup this deferred money “upon retirement,” meaning this is really just a no-interest loan from the union to the district. The savings are all short term; in the long term, DPS is still on the hook for the cash. To boot, even though Bobb was able to nix seniority in the lowest performing “priority” schools, meaning that teachers are removed for performance rather than tenure, they are not necessarily removed from the system all together. New York City has spent well over $100 million on these “at-large” teachers, the result of a similar compromise with its local union affiliate, and now are saddled with the subsequent and infamous “rubber rooms” where these unassigned teachers spend their days. No one would say the outcome has been pretty—or cheap.

Translation: It took the threat of bankruptcy—pink slips for everyone—for the unions to make …hardly any concessions at all. As Andy Rotherham, president and co-founder of Education Sector, wrote in his scathing take on the contract, “Sometimes…progress on an issue should not be judged in relative terms. School reform in Detroit is such an instance.”

At least, Bobb seems to realize that the contract is just a tiny baby step, if that. He told Detroit Daily News editorial writer Amber Arellano that “Anywhere else in the U.S., this (new) contract would be considered evolutionary. In Detroit, it’s revolutionary.” And in Bobb’s defense, when the threat of bankruptcy became real, his office was assailed with a lawsuit from the school board, claiming that he was overstepping his bounds as financial manager. Meanwhile, parents and community leaders told him he had a duty to prevent the district from financial ruin.

The truth is that the district had already reached that state of financial ruin, and Bobb, DPS, and Detroit’s students, would have been much better off had it admitted as much. Given these union compromises won’t save DPS much if any money, the district will likely be in the red again soon; let’s hope if Bobb has another opportunity to declare Chapter 9, he takes it. Otherwise, when the contract is next up for renewal in three years, Bobb can only hope for more of the same.

Stafford Palmieri is Associate Editor and Policy Analyst at the Thomas B. Fordham Institute, a Washington, D.C.-based education policy think tank dedicated to education policy reform.