General Motors is alive, and two low-income school districts in Michigan are nearly dead. For them, there is no bailout.
As the city of Detroit made national headlines this month for seeking a bankruptcy filing, two mostly-black school districts in Michigan state failed to make a critical deadline. As a result, they'll likely be shut down.
The districts, Inkster and Buena Vista, are located in southern and central Michigan. Under a new law signed by Gov. Rick Snyder (R), they had to prove they were financially solvent and secure a private loan -- or be closed.
By 5:00 p.m. Monday, the struggling schools had failed to meet an extended deadline to prove they had enough money to stay open, and they were looking for other options -- including banks to lend them funds to continue operating and pay staff members or a charter school management organization that could step in to help.
But small school districts aren’t like big car companies, and as of Tuesday it was looking more likely that the districts will indeed shut down, forcing parents to send their children to different schools in other neighborhoods or to charter schools this fall. Because the schools haven’t secured funding, “intermediate school districts,” government bodies that oversee clusters of school districts, will vote on their future. In Buena Vista’s case, State Superintendent Mike Flanagan has said that the state will dissolve Buena Vista if the intermediate school district doesn’t act.
U.S. Rep. Dan Kildee (D), who represents the area that includes Buena Vista, told The Huffington Post in a statement that the district’s students have been “the ultimate and unfortunate victims of a broken school system.”
According to a memo sent from Michigan’s Treasury Department, Buena Vista and Inkster have been found to be “unable to educate students” due to their financial problems. For Inkster, the problems mirror some of Detroit’s -- the small city in which it's located has suffered from persistent financial deficits, and is now under state control after losing 5,000 residents in the last 10 years. Inkster blames its financial woes on a previous emergency manager and a union dispute. Police have investigated Inkster for misspending, and the district laid off every teacher in May to get back on track financially.
Despite its various issues, it seemed like Inkster was closer than Buena Vista to securing a loan by the Monday deadline -- but officials still had no documentation of a deal by Monday night.
As for Buena Vista, the closure would be the end of a long fight to keep the district open. The tiny school district in Saginaw County shut down its schools in May for more than a week because it had run out of money. By most financial and academic measures, the district was indeed failing: None of its students were deemed proficient on eight of the last standardized test administrations, and the district had fallen into debt. Enrollment had fallen from 4,000 to about 400.
Then in May, the state accused the district of fraudulently accepting state funds to run a non-existent facility. It froze Buena Vista’s funding.
The saga spilled into national news. While the 28 Buena Vista teachers volunteered to work for free, the district still shut down in May -- though the school year wasn’t meant to end until June. Parents began pulling their students from the district. Cassandra Frazier, a proud Buena Vista graduate, sent her daughter to a charter school. "I just don't have time for public schools anymore," she said. "They just have too much money problems. I wanted one of my children to go to my high school, but I don't think it will exist next year."
After an attempt to offer a no-credit “skills camp” to allow students to finish out the year prompted outrage, the state approved a deficit reduction plan for the district and released some aid, allowing Buena Vista to reopen. But not for long.
It now looks like the battle is over, and the district will close. Buena Vista would need about $300,000 to pay off the 2012-2013 salaries of its staff. Teachers' last paycheck only covered their employment through June 26. The district would need another $300,000 to open its doors in September.
At least 20 teachers would be jobless if the district officially closes. Even if they do find new jobs, they’ll take a pay cut, as starting in a different district will mean they’re back at the beginning of the seniority-based payscale. Randy Jackson, the Buena Vista school board president, did not return requests for comment.
Susan Rutherford, a Michigan Education Association director who works with Buena Vista, said she has mixed feelings. "On the one hand, it's a travesty to have a community that doesn't have a school district. It'll take a community that's already struggling and make it even more difficult to be successful," she said. "On the other hand, I'm not sure that Buena Vista has shown they know how to run a school district and should be allowed to continue doing that."
Kildee focused back on the fact that it's the students who are losing out in this case. "While the financial woes are clearly documented in the case of Buena Vista Schools, no child should suffer or have their education denied because of the actions of adults,” he said.