48 school districts end the year with a budget deficit

The Michigan Department of Education (MDE) identified 48 Michigan school districts and charters operating with a budget deficit. State Superintendent Mike Flanagan released the names of those districts in his quarterly report to the Legislature on the financial health of the state’s public schools.

Out of those 48 districts and charter schools, 10 are ending the year out of deficit; nine districts are expected to see their deficit grow; and seven districts that started without a deficit are now in the red.

Last year, 55 school districts ended the year with a deficit. While the number is decreasing, the news is not all rosy. Flanagan warned that Benton Harbor schools might be the first Michigan school district to declare bankruptcy. 

Flanagan also reported on Muskegon Heights that continues to have money issues even though it was the first district to be taken over by Mosaica—a for-profit charter company—in 2012. The company has since pulled out of the Heights and claims the district owes it more than $2 million. 

The situation there puts the focus on failed education policies that from the beginning haven’t been working. Cutting more than $1 billion from education to provide a tax break for corporations helped create this list of deficit schools. And certainly the push for charter schools as a way of “saving” schools in deficit—both financially and academically—didn’t help Muskegon Heights.

A decrease in the number of deficit school districts could be called encouraging, but it begs the question—How did those districts get out of debt? If that move meant employees took wage cuts, or were forced to pay more for less benefits, or support staff was privatized, or programs were cut, or class sizes increased, or school districts like Buena Vista and Inkster were shut down—there really isn’t a silver lining in the latest report.