Education, Pontiac — May 10, 2013 at 3:56 pm

Another Michigan school district is ready to lock its doors due to lack of money


I’m sure another corporate tax cut is all that is needed

[CC image credit: ~kawaii-bubble-wrap | deviantART]

I mentioned this briefly in my post this morning about Buena Vista schools being closed for the fourth consecutive day but now the Detroit News is reporting it as a near-certainty: the Pontiac School District is out of money and will not meet their next payroll. They also have no money to pay vendors that provide custodial, transporation, and other services.

The results of a preliminary review of the Pontiac School District’s finances reveal it has not made sufficient progress on eliminating its $37.7 million deficit, Flanagan said in his May 8 report to district officials.

Pontiac Schools had been using cash advances from Oakland Intermediate Schools to meet its May 3 payroll, Flanagan says, adding, “There are no further funds that can be advanced by Oakland Schools that would be sufficient to meet the May 17, 2013, payroll obligation” of $875,000.

The district also is unable to meet other vendor obligations including transportation, utilities and custodial services as well as a $1.5 million in technology bills owed to Oakland Schools, according to the state report.

According to the Department of Education, the district’s deficit has been steadily increasing since 2009, when it reported it was $8.5 million in the red.

The shortfall grew to $12.2 million in 2010, $24.5 million in 2011 and $37.7 million in 2012, in spite of proposals to reduce expenses, cut wages, trim staffing and sell buildings. The funding gap is expected to continue to grow through 2014, according to the Department of Education report. {…}

The school system has been under FBI investigation since late 2011, submitted late audit reports and has failed to get state approval for its most recent Deficit Elimination Plan.

As a result, the state Department of Education has withheld the district’s state school aid payments for March and April.

The district superintendent, Brian Dougherty, resigned last week, effective May 17th.

Pontiac has been hard hit by recession and offshoring of the vehicle manufacturing that once made it a boom town. Its demise and the economic crisis in its schools are likely to be blamed entirely on unions or inept/corrupt leaders but the fact is that Pontiac is in serious trouble on a broad scale. It’s not simply a matter of “balancing the books” by an Emergency Manager or weeding out corrupt school and governement officials. We need a rescue plan for our failing urban centers and we need one quickly. The Snyder administration’s band-aid approach of sending in accountants to slash union wages and benefits, privatize city and school services, and turn the school systems over to for-profit charter schools will NOT solve these problems.

The sooner we all recognize this fact, the sooner we’ll figure out what needs to be done to address it.