Following the money in the Detroit Public Schools mess

DETROIT – Each Detroit student has about $14,000 in funding. 

Half of that is from the sate. Nearly 70 percent of it goes to the teachers and administration. Ten percent goes to paying off debt. The rest of the money is for books and buildings -- and there is not a whole lot left to do such.

When Detroit Public Schools (DPS) Emergency Manager Darnell Earley says, "We run out of cash in April," teachers like Erica Jones, of Cass Technical High School, ask:

"We want him to tell us where the money is that the district has obviously siphoned out. You split it up amongst charter schools."

The DPS report titled "Shaping the Future" (view below) says DPS was relatively massive in 2005. It had 141,000 students, 255 schools and nearly 16,000 teachers.

Today,  the district has 46,000 students, 96 schools and 6,000 teachers. It's roughly 65 percent smaller than it was in 2005. Take 95,000 students lost and multiply it by the average state per-pupil spending in Detroit over the past 12 years and you'll get a staggering loss of nearly 3/4 of a billion dollars in revenue.

To Jones' point, roughly half of that money ended up in Detroit charter schools as nearly 50,000 students went there instead. The district is reporting a 1/2 billion dollars worth of debt, which is due mostly to borrowing done since 2011, paying for pensions and other debt.

The report shows DPS is running out of cash in April. Should the legislature do nothing with the governor's old/new district funding plan, the school year will end with another deficit of $45 million. Should the foot-dragging extend into the next school year, the shortfall plumps to $126 million.

In the end, Detroiters voted with their feet and took school funding with them when they decided to send students to charter schools. Of course, teachers are suspicious that the money ended up in consultants' pockets and other places.

Earley said it's up to the legislature to pull the trigger on the governor's plan, which would push the reset button, take away the debt and allow DPS to start paying teachers more and repair its buildings.

DPS - Shaping the Future

About the Author:

Rod Meloni is an Emmy Award-winning Business Editor on Local 4 News and a Certified Financial Planner™ Professional.