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Thu January 6, 2011
DPS chief: Long-term strategy could include GM-style restructuring
Detroit Public Schools officials are getting ready to submit their latest plan for shoveling the troubled district out from under a crippling deficit.
The plan could include a proposal to split the district in two. It’s an idea Michigan Radio first reported last April, and the concept is similar to the way General Motors restructured.
Emergency Financial Manager Robert Bobb says he’s reduced expenses by more than $500 million in the last several months, but there’s still a “legacy” deficit that tops $300 million:
"We’re whittling away at it, but we have to create a long-term plan so that we’re not in this situation 12 months from now or two years from now."
DPS officials say another option is a New Orleans-style overhaul that would convert many schools to charters. A third option is to use the state’s tobacco settlement money to erase the district’s debt, or the state could opt for some combination of all the above options. Lawmakers rejected a proposal last month to use the state's tobacco settlement to pay off the district's debt.
DPS is required to submit its latest deficit elimination plan January 10.