Highland Park Schools Face Emergency Manager Takeover

Gov. Rick Snyder declared a state of financial emergency for the Highland Park school district Thursday. The announcement follows a negative assessment from the governor's appointed financial review board, which recommended an emergency manager for the district.

An emergency manager would have almost complete decision-making authority and control over the school district's finances.

Now that Snyder has signalled his intentions, the next step is to appoint a manager. The governor justified his decision based on the following factors in the review board's report:

• The HPS cumulative deficit increased by 51 percent over the past fiscal year, from June 30, 2010, to June 30, 2011, growing from $6.6 million to $11.3 million, according to the district's fiscal year 2011 financial audit.
• The district has incurred an operating deficit in five of the last six fiscal years. These operating deficits have ranged from $597,733 during the 2007 fiscal year to more than $3.5 million during the 2010 fiscal year. The district's average operating deficit in recent years has been $2.3 million.
• As of Nov. 15, 2011, HPS owed more than $1.7 million in accounts payable, which range from 30 days to 6 months old.
• The district's pupil enrollment has decreased by 58 percent since 2006, dropping from 3,179 pupils to 1,331 for FY 2011. Current estimates show a pupil count of 969.

The board also indicated frustration with the district, which it said had provided members with inaccurate and conflicting information and had failed to meet requested deadlines.

State Treasurer Andy Dillon remarked last week that Highland Park Schools should prepare for a lengthy state takeover, due to the severe nature of the district's financial problems.

By law, the district may request a hearing to challenge the decision, and the Highland Park Board of Education issued a resolution indicating that it intends to do so. That hearing is scheduled for Jan. 17 and will take place before the Superintendent of Public Instruction, Mike Flanagan, in Lansing.

Michigan's Public Act 4 grants the governor the power to appoint emergency managers for financially struggling school districts and municipalities. Four Michigan cities are currently under the authority of an emergency manager, and the city of Detroit is also currently undergoing a financial review that could lead to a takeover.

Detroit Public Schools is currently the only school district run by an appointed emergency manager. In December, Muskegon Heights' school board asked the governor to appoint one to manage the district's $10 million deficit.

Highland Park School Board member Robert Davis is currently suing for the removal of Detroit Public Schools Emergency Manager Roy Roberts. Davis alleges Roberts failed to take an oath of office.

UPDATE: 4:00 PM -- State Treasurer Andy Dillon and State Superintendent of Public Instruction Mike Flanagan announced the state would front the money to ensure the Highland Park School district would not run out of cash and be forced to close schools.

The state officials announced an advance on the district's state aid payment in the amount of $188,000 to help cover payroll costs.

"Children who attend Highland Park Schools deserve the best education possible," Flanagan said. "We cannot and will not let this financial emergency impact these young people and their hopes for the future.”

Highland Park Schools Superintendent Edith Hightower had originally requested $251,000 to keep the schools running through February.

Comments

[Freemind42]

10:07 AM on 01/19/2012

once you get a taste of unbridled executive power, it's hard to stop. Snyder is unilaterally taking over the local governments in this state. Ironic, for a party that preaches about local authority.

[bubwalt]

05:48 PM on 01/16/2012

It seems the only fix in Highland Park is to absorb the students into the Detroit Public Schools. If enrollment is going down anyway, why keep something broken open and call it a fix!

[thegreenhornet]

07:39 AM on 01/14/2012

Another predominantly black community stripped of their rights by a white governor whose claim to fame is he sent jobs overseas. Shame.

[corwin]

10:20 PM on 01/14/2012

I agree with you! I think predominantly black communities should be given state money with no restrictions.

[edsimon77]

06:50 PM on 01/15/2012

Another predominantly black community that can't successfully govern itself.

[TheRevV]

11:59 AM on 01/13/2012

March on Snyder's house on Jan 16. in Ann Arbor Snyder, WE KNOW WHERE YOU LIVE. In the tradition of Dr. King, we are going to stand in solidarity and fight for the promise of our democratic freedom. In this spirit, we urge you to join us on Monday, January 16, 2012. For those interested in attending the march there are buses leaving from several locations around the state and returning to those locations. Please pick a location convenient to you and call that site contact listed below. In response to Michigan leaders passing the Emergency Manager law that allows the state to appoint CEOs with absolute control and continuing to deny democracy to the 160,000 plus voters that have signed the petition to repeal Public Act 4 by the Michigan Senate passing S865 we are sending out a call to action for all Americans to invade Superior Twp for Democracy. This will be a peaceful non violent assembly. The rally will include citizens, labor, clergy, and elected officials from around the state of Michigan. Our drop point is WASHTENAW COMMUNITY COLLEGE. Upon meeting there we will march to the gates or Governor Snyder's neighborhood. The map is posted at http://maps.google.com/maps/ms?authuser=0&ie=UTF8&hl=en&oe=UTF8&msa=0&msid=213002376963383457639.0004b51658da69d95f38c http://www.facebook.com/events/246033665464039/

[bubwalt]

11:45 PM on 01/18/2012

How about marching on Sharpton's house for not bringing in any bailout money!!!!

[happyblackman]

11:45 AM on 01/13/2012

He has overreached greatly. I can drive through some Northern Michigan towns in worse situations, but they have not brought up the recievership issue with them, and nor should they. The democratic process is what needs to be followed. We hold elections to give people a voice, and to trust that they know their region/town/city better than someone at the state level.

[phoenixbc]

09:37 PM on 01/12/2012

What a great idea. Nine years of state-run receivership did wonders for the the City of Highland Park.

In 2000, Gov. Engler decided that Highland Park, ravaged by sweetheart tax deals for Ford Motor Company and Chrysler, could be fixed by an emergency financial manager. In 2009, the still-broken city was turned back to elected officials to run. No money, no tax base, and no jobs, thanks to decades of Supply-Side legislative policies.

Now, Snyder and his pals in the Legislature have used their new police power (courtesy of laws they just enacted) to "fix" the Highland Park schools. What's the hook? The one source of money on which every Michigan municipality can rely is the student allotment. Highland Park Schools get money, no matter how badly the rest of the city finances. So Snyder's private industry buddies will milk the one remaining source of funds.

Engler did the same with Detroit public schools, which had millions in reserve. By the time he was done, the millions were gone, and the problems of the Detroit schools were worse. So much for private expertise.

What else do Engler and Snyder have in common? Both Supply-Side Republicans.

[bubwalt]

11:29 PM on 01/18/2012

It was Granholm who used the EFM first. DPS with millions in reserves?LOL They were falling apart in the late 70's. The DPS school board members were attending meetings with rented limos at tax payer dollars. Maybe Highland Park should go bankrupt and be absorb into Detroit. Face it, Highland Park died decades ago with no future there.

Detroit can be saved. They have a EFM at the DPS. A black guy who seems to be doing a good job at reducing debt this last year. From $327 million defecits to an $83 million deficit by reducing wasteful spending.

What does forty years of liberal tax & spend policy show for Detroit? Nothing, if you do not have a tax base to pacify spending habits!

[sneb6365]

02:19 AM on 01/25/2012

ENGLER AND SNYDER ARE BUUDIES. ENGLER WAS ON THE BRD FOR GATEWAY. ENGLER HATED PUBLIC SCHOOLS--BIRDS OF A FEATHER.... HOWEVER BAD IT SOUNDS SOMETIMES YOU HAVE TO DO RADICAL SURGERY TO CURE THE CANCER, SOMETIMES.

[heartlandmamma]

07:37 PM on 01/12/2012

Another predominantly African-american community put under receivership. You don't see him doing this to poor white communities here either. He's become a regular dictator in MI. Everything he does from here on out in this city, voter rights nullified by fiat, city council dismantled, school board let go, taxation without representation, and the city clerk's office under political control, are all going to effect services throughout the city, with citizen's rights denied.

When will the country at large consider this a national story worthy of reporting, as a effort at dismantling democracy? Its just not right.

[corwin]

10:23 PM on 01/14/2012

HM,Diffidently, I must ask you to name some poor white communities that are bankrupt

[edsimon77]

06:51 PM on 01/15/2012

She can't. It doesn't fit into her silly victimization diatribe.

[bubwalt]

11:38 PM on 01/18/2012

Most white communities have/had difficult financial times for as long as I can re member. However, in black communities they vote only for liberal tax and spend democrats. Most white communities tend to vote a mix of liberal tax and spend with fiscal conservative republican.
We tend to be more diverse with our voting habits. If you do not have the taxes, do not spend the money. If Detroiter's would learn this, your fiscal policy would be more stable.

[KarenT]

05:21 PM on 01/12/2012

A pure dictatorship.

[A Dub]

04:59 PM on 01/12/2012

Snyder sends another comrade to another city. The city government has no rights anymore. Fascism at it's best.

[Robin Rae Overholt]

08:41 AM on 01/13/2012

Yes I live in MI, Snyder is going to be recalled or fired!

[Christine Gallo]

03:34 PM on 01/12/2012

I am really curious to hear how a school district that has lost 60% of its' students can continure to run up increasingly higher and higher deficits? Although I loathe the idea of the state taking over running any local area, I do believe that the families in Highland Park have been mis-served. They are essentially down to what should be 3 buildings, and less than 100 teacher/administrators. What do they actually have?

I would really enjoy reading these auditing books!

[TheSocialCapitalist]

07:54 PM on 01/12/2012

Massive, massive funding cuts. It's horrible in Michigan.

[zSpin2001]

08:05 PM on 01/12/2012

It's called the WPU, weighted pupil unit. The money the district gets from the state for the number of students attending. When enrollment drops, debt goes up because they can no longer cover their debt.

[Christine Gallo]

09:36 PM on 01/12/2012

But the money coming from the state doesn't cover the total cost of any district...so? Is Highland Park either particularly low income, or high Income?

[kemcha]

03:16 PM on 01/12/2012

Governor Rick Snyder is on a campaign to take over every city, township and school district all under the guise of the EFM law. To make matters worse, he's not using an independent financial advisor to examine these cities but attempting to overthrow the legally elected Democrats running Michigan cities and school districts.

Before the end of the year, I suspect that a majority of Michigan cities and schools will be directly under Snyder's EFM control.

Isn't this how Hitler and Napolean got their starts?

[zSpin2001]

08:06 PM on 01/12/2012

I wouldn't go that far, but there will be a backlash.

[LisaViger]

08:34 PM on 01/12/2012

Yes, it's exactly how they got their starts.