Detroit Public Schools on Wednesday submitted its revised Deficit Elimination Plan (DEP) to the Michigan Department of Education, reflecting both continued enrollment progress and, importantly, salary increases for all employees beginning in 2015-16. The revised DEP also outlines continued challenges the district will face on the route to eliminating its $169.5 million fund deficit over the coming nine-year period.
Recently announced enrollment stabilization resulting from continued academic progress and improvements are reflected in the revised DEP, including Fall 2014’s preliminary FTE (full-time equivalent) student count of 47,451, which is 262 pupils above budget and means an additional $1.9 million in state aid.
This approximately 2% annual reduction in students, which has remained consistent for the last two years, compares to annual losses averaging 10.4% for the prior six years and continued losses spanning nearly two decades before that. The recent enrollment stabilization results from continued academic and program enhancements, despite increasing competition from charter and other schools. As a result, the revised DEP outlines a continued stabilization of enrollment and an overall leveling of students as soon as 2018-19.
Chief Financial and Administrative Officer William Aldridge stated that the district’s plans are consistent with comments from City leaders that Detroit’s overall population and property taxes will become more constant beginning in 2017.
“This will create a much more stable environment in which Detroit Public Schools and others can operate,” Aldridge said.
The revised DEP includes across-the-board salary increases of 1% in 2016-17, 2% in 2017-18 through 2019-20 and 3% in 2020-21. In total, those increases recoup the current 10% salary concession affecting all employees. Aldridge noted, however, that the district will continue to face increasing pressures to attract and retain the highest quality instructional staff and school leaders unless it addresses the comparative disparities in compensation with suburban and other local schools.
The district is realizing $13 million in savings in the current fiscal year due to restructured healthcare benefits, and $34.5 million through 2021 due to zero-based budgeting and extensive reorganization of all executive and administrative functions.
Annual inflationary increases of 1.66% in purchased services, materials and utilities and rising health-medical increases are reflected in the district’s expenditures over the course of the DEP.
The Deficit Elimination Plan includes a positive fund balance by 2022-23. Aldridge says the 2014 fiscal year’s increase in the deficit reflects the harsh reality of the need to provide robust academic programs, enrichment and safety for students while facing overall declines in revenue of $61.4 million, or 8.74% from FY 2013 to FY 2014.
Aldridge stated that efforts by state and local policymakers to redefine educational offerings in Detroit must include a focus on this present and ongoing need to remove the deficit which erodes limited resources for students’ classrooms.