Proposed budget, based on realistic assumptions, presents fresh start for children and families of Detroit
Transition Manager Judge Steven Rhodes today presented the citizens of Detroit with a proposed Fiscal Year 2017 budget for the new Detroit Public Schools Community District (DPSCD). It is a balanced budget based on realistic assumptions. Because all projected expenditures will be paid from expected revenues, the budget does not require any new debt.
“This honest budget will enable the new district to pay its hard-working staff and its vendors when our obligations to them are due, allowing us to regain the public’s trust and attract and retain the best people to work in our schools,” said Judge Rhodes. “While challenges remain, we are on a path to create a sustainable new school district that is poised for long-term success and ready to be governed by an elected school board.”
The proposed budget reflects five major priorities for the new district:
- Meeting all financial obligations;
- Balancing the budget in a realistic way;
- Supporting academic innovation;
- Improving student safety; and,
- Improving facilities.
“This budget does more than just meet our current and historical financial obligations,” stated Judge Rhodes. “It also focuses on directing resources toward instruction in our classrooms, because improving academic outcomes is critical to the success of the new district, and makes critical investments in improving the district’s financial accountability and transparency. Chief among these investments is the reinstatement of the Office of Inspector General to ensure that the fraudulent actions of a few individuals do not stain the reputation of the district and its dedicated and committed employees.”
DPSCD is projected to receive $671.6 million in FY17, which includes $25 million in State-provided transition funds as a result of the package of education reform bills that were recently signed by Governor Snyder.
Revenue assumptions guiding this number include an enrollment of 45,511. This is approximately 1.8% lower than the previous year’s enrollment (which declined by a similar number) and signals a continued enrollment stabilization. The revenue assumptions also include an increase of $118 in per-pupil funding from the State of Michigan, as well as a projected $6 million in asset sales.
DPSCD is budgeting to spend $654.3 million in FY17, including $7.7 million of the $25 million in State-provided transition funds. Approximately 75% of the budget is dedicated to instruction and student support. Additional expenditures provide for school operations and maintenance, transportation (including funding for additional bus passes for high school students living beyond 1.5 miles from their assigned school), and technology.
Expenditure assumptions also reflect savings realized through a right-sizing of the district’s Central Office that took effect in January 2016, and that for the third consecutive year there will be no school closures.
The $7.7 million in expenditures from the $25 million in State-provided transition funds will be used as follows: $1.9 million for academic programming enhancements/innovations, $5 million for facilities/maintenance, and $800,000 for improving school safety (including the return of some school-based security personnel).
The remaining $17.3 million of the transition funds will provide a minimum cash balance for FY17, and will also be retained for use in future years. Total investments in each category are projected at $8 million in academic initiatives, $10 million in facilities maintenance and $2 million for safety, and $5 million for minimum cash balance.
The remaining $125 million of the state-provided transition funds will stay with the old district to cover obligations such as vendor payments, and wages for teachers who spread their paycheck out over the entire calendar year, and to bridge the gap between when the District begin to incur expenses (July) and when it receives its first State Aid payment (October).