Financial Crisis
5:05 pm
Thu January 12, 2012

Snyder: Financial crisis exists in Highland Park School District

Update 4:58 pm:

State Treasurer Andy Dillon says the district’s money problems are deep and troubling. He says the state will advance the school district $188,000 so it can meet payroll tomorrow. 

"I have no comfort that the district has a handle on their finances," said Dillon. "The numbers move hourly. We have three people down there today trying to get a handle on how much they actually need for payroll. And I’m very uneasy about it, because I can’t tell you in the middle of February that they’re going to make payroll."

But school board member Robert Davis says the state has contributed to the district’s financial woes by requiring that it close a career academy that enrolled 1,500 students.

"Their plan and intent is to fold the Highland park School system into the Detroit Public School system," Davis said. "That’s what this is all about."

Highland Park Schools' student population has declined 58% percent since 2006. 

State officials say their objective is to keep the district’s doors open through the end of the year. But they say that will be difficult. The district needs a cash infusion of at least $3 million to get through the school year. But the maximum the state is allowed to advance under hardship cases is $2 million.

The district's cumulative deficit is $11.3 million. That’s about $10,000 for every student enrolled.

12:56 p.m.

Governor Rick Snyder has declared a financial emergency in the Highland Park school district, Rick Pluta reports. The district will have a chance to challenge the finding at a January 17th hearing before the governor names an emergency manager.

In a statement released today, the Governor says:

“It is critical that students in the Highland Park School District get the education they need and deserve. For that to continue, the Highland Park School District must have stable finances. Through the comprehensive reviews that have been conducted, it is clear the district faces monumental financial challenges.”

On January 4th a state review  panel recommended the governor appoint an emergency manager to fix the school district’s "financial emergency." The financial review team had been looking at the Highland Park School District’s books since November. Earlier this month, Steve Carmody reported:

The panel’s report to the governor finds the school district is $11 million in the red. That works out to about $10 thousand for every student enrolled.  The school district’s deficit has grown by $3 million in just the last year. The school district’s debt has grown, as its student population has fallen. Nearly 3,200 students attended Highland Park schools in 2006. This year, fewer than a thousand students are enrolled.

Emergency managers are already running the Detroit public schools,  as well as the cities of Flint, Pontiac, Ecorse and Benton Harbor. Financial review teams are also looking at Detroit and Inkster's books.