Michigan City Outsources All of Its Schools

Stephanie Banchero and Matthew Dolan, Wall Street Journal, August 2, 2012

The public school district in this hard-luck city has come up with a radical answer for its troubled education system: It is outsourcing all of it.

Highland Park School District, one of the state’s lowest-performing academically, says it will turn over its three schools and nearly 1,000 students to a private, for-profit charter school company—the second district in Michigan to take such a drastic step to avert financial collapse.

The abrupt news last week sparked concern—and in some cases, relief—from parents and other residents who packed a Wednesday night meeting in the faded industrial city, which is nearly surrounded by Detroit.

The parents came to hear from the charter company, Leona Group LLC, which promises to improve the learning environment and boost student performance in a district where only 22% of third graders passed state reading exams last school year and just 10% passed math. The results were even worse for high-schoolers: About 10% were proficient in reading, and none in math.

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Highland Park decided to privatize its schools after years of enrollment decline, poor fiscal stewardship and allegations that a board member stole more than $125,000 by submitting false invoices; the charges against the member are pending.

During the 2010-2011 school year, the district spent $16,508 per student. By comparison, Michigan districts on average spent $9,202 per pupil that year. In the process, Highland Park ran up an $11.3 million deficit over its $18.9 million school budget.

The district got itself into financial trouble, in part, because it didn’t cut staff as fast as its enrollment declined along with the city’s population, leaving it with higher per-pupil expenditures, said Joyce Parker, who, under a controversial state law, was appointed district emergency manager in May by Republican Gov. Rick Snyder.

“The financial problems were immense and we had to look at nontraditional ways to get the district back on track,” said Ms. Parker, who has full control of the district and made the decision to convert to a charter after ruling out a merger with a neighboring district.

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Unions have been sidelined after the district’s entire professional staff was laid off, as allowed by the state emergency law, but teachers can apply for jobs with Leona. Leona has budgeted about $36,000 a year for Highland Park teachers on average, the company said—compared with almost $65,000 a year the teachers received in the 2010-11 school year.

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Highland Park is where Henry Ford opened his first assembly line and Chrysler Corp. built its original headquarters. It has suffered the same ills as Detroit, its larger neighbor: an exodus of auto jobs, depressed housing stock and a surge in crime.

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[Editor’s Note: According to this website, the under-18 population of the Highland Park School District is at least 96 percent black.]

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