December 07, 2004
December 7, 2004
Restructuring Option Protects Students by Minimizing Mid-Year Disruption
LANSING – Governor Jennifer M. Granholm today announced that her Administration has identified a way for Detroit Public Schools (DPS) to begin resolving its fiscal crisis without disrupting the education of Detroit’s school children this year.
Granholm’s leadership on this issue is focused on restoring fiscal integrity to DPS without sacrificing the education of Detroit children.
"We are moving forward to minimize the impact on Detroit’s children, so they will not experience disruptions in their current school year," Granholm said today. "Further, we are giving the Detroit community – not the Legislature or other outside groups – an opportunity to develop solutions to the district’s financial problems."
Granholm has identified tools to allow DPS to restructure a portion of its debt. This restructuring will ensure that students will not be harmed this school year. The district’s ability to use these tools is contingent on three key items.
First, DPS must present – and take immediate action on – a plan to ensure long-term financial stability and solvency for the district.
Second, that plan for long-term financial stability must include input from the community team now forming in Detroit.
Third, and finally, those plans must put the needs of children first.
At the request of Detroit community leaders, Granholm will appoint a transition team that will immediately go to work with DPS CEO Dr. Ken Burnley to ensure that the community’s voice is heard as the district resolves its budget crisis. The transition team, which will be named within two weeks, will include educators, faith-based leaders, representatives of the Mayor’s office, the Detroit legislative delegation, and the grassroots community as well.
Granholm was joined for her announcement by Lt. Governor John D. Cherry, Jr., Superintendent for Public Instruction Tom Watkins, and Treasurer Jay Rising.
The Governor noted that while the Administration identified these tools, it is up to the district and community to take the lead in crafting a solution that ensures the stability of the school system and the strength of education for children.
"While we are providing DPS with an option to protect the public education of 140,000 Detroit children, only genuine fiscal discipline and significant cost reductions on the part of the school district can reduce the district’s debt and ensure its long term stability," Granholm said.
Since learning of the fiscal crisis facing the Detroit Public Schools, the Granholm Administration has been working with school leaders and the community on a resolution of the issue. Financial experts from the Department of Treasury, the Department of Management and Budget, and the Department of Education are in the midst of a review of the district’s finances and verification of information provided by DPS to asses the magnitude of the structural financial problems the district faces.
Last week, utilizing his authority under the State School Aid Act, State Superintendent Tom Watkins notified Dr. Burnley that the district has until December 31, 2004, to submit both a two-year and a five-year plan for eliminating the district’s existing $48 million deficit, and avoiding any future long-term budget shortfalls.
