Detroit Schools Fight for Market Share With Kids as Commodities

Dec. 18 (Bloomberg) -- Steve Wasko, a spokesman for Detroit Public Schools, talks with Bloomberg's Mark Niquette about the district's strategy to boost enrollment. The rise of charters and other alternatives to traditional schools has increased competition for students and the $7,200 in state funding that follows each student in the bankrupt city. They speak from the "war room," a former closet turned into a center to retain and attract students. (Source: Bloomberg)

An all-out battle to attract Detroit’s dwindling pool of students is engulfing the city’s competing schools even as plans for a civic renaissance count on them to retain residents and stabilize neighborhoods.

The contest was caused by the rise of charters and other alternatives to the traditional system meant to spur competition and improvement, and the prize is the $7,200 in state funding that follows each student in the bankrupt city.

Detroit Public Schools has turned a closet into a “war room” for attracting students after losing about two-thirds of its enrollment during the past decade. Charters advertise smaller classes and tablet computers or gift cards to woo children. A state authority that took over low-performing schools is fishing for pupils, as are suburbs whose enrollment is declining, too.

“There’s an ugliness to this work that’s unsettling,” said Sharlonda Buckman, chief executive of the Detroit Parent Network, a nonprofit offering development programs. “I call it the ‘snatch and grab.’ It’s rather disgusting as you watch this fight for market share.”

The districts are trying to improve their hold on a declining market as middle-class parents flee. The outcome could determine whether Detroit thrives after years of fiscal management, decay and depopulation.

Photographer: David Coates/Detroit News/AP Photo

Education Secretary Arne Duncan and Michigan Gov. Rick Snyder read "The Rainbow Fish" book to a pre-kindergarten class in Detroit. Close

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Photographer: David Coates/Detroit News/AP Photo

Education Secretary Arne Duncan and Michigan Gov. Rick Snyder read "The Rainbow Fish" book to a pre-kindergarten class in Detroit.

Beggared Neighbors

The linchpin of the Detroit Future City recovery plan is having thriving schools as anchors for neighborhoods. “Hypercompetition” for children is no help, said Dan Varner, chief executive of Excellent Schools Detroit, a group of education, government, community and philanthropic leaders.

“No school and no district in the city gets to the level of enrollment that allows them to be financial secure, healthy, stable,” Varner said.

Detroit has about 120,000 school-age children, with about 42 percent attending city public schools in 2012, according to district data. That compares with 42 percent at charters, 9 percent at districts outside Detroit and 7 percent at the Education Achievement Authority of Michigan that took over the worst-performing schools in 2012.

The education landscape changed as Detroit slouched toward its record $18 billion bankruptcy filing in July. While the Motor City lost 25 percent of its residents between 2000 and 2010, the number of children ages 5 to 9 dropped by 47 percent as families left because of the quality and safety of schools, said Kurt Metzger, director emeritus of Data Driven Detroit, a nonprofit that tracks social, economic and environmental indicators.

Photographer: Bryan Mitchell/Bloomberg

Detroit Public Schools has turned a closet into a “war room” for attracting students after losing about two-thirds of its enrollment during the past decade. Close

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Photographer: Bryan Mitchell/Bloomberg

Detroit Public Schools has turned a closet into a “war room” for attracting students after losing about two-thirds of its enrollment during the past decade.

Fresh Competitors

Detroit Public Schools, which enrolled more than 80 percent of children a decade ago, has had a state-appointed emergency manager since 2009. Its general revenue declined to $696.1 million in fiscal 2014 from $1.18 billion in 2008, and it runs a $93 million deficit. It had a dropout rate of 19.4 percent last year compared with 10.7 percent statewide.

Charters began taking market share after Michigan introduced them in 1994. They are authorized by a public body such as a university and receive the same per-pupil state funding as the traditional districts where they are. That’s as much as $7,168 this year, according to the Michigan Education Department.

Young Money

Detroit has the second-largest percentage of children in such schools, according to a report last week by the National Alliance for Public Charter Schools in Washington. Only New Orleans has more.

The state also created the Education Achievement Authority to run the lowest-performing schools. It took over 15 in Detroit starting in 2012. Michigan also lets students attend suburban districts where they don’t live.

Districts’ inability to seek voter approval of additional property taxes to augment state funding creates more pressure, according to a Nov. 19 report by Moody’s Investors Service.

“It forces you to look at a child like a cash register,” Robert Bobb, emergency manager of Detroit Public Schools from 2009 to 2011, said in an interview from Washington.

So this year, the public schools converted a closet on the 11th floor of its Fisher Building offices into its war room. Charts cover the walls and there’s a bookshelf of binders tracking households.

Ad War

From there, officials ran their “ground game,” knocking on doors during the summer to pitch academics, better service and initiatives from a strategic plan. They’re also immersed in a campaign to thank parents for choosing them before a February count of students that helps determine funding.

As a result, although enrollment declined 1.8 percent for the term that began in September from the year before, that was far less than the 10 percent or more in previous years -- and high schools even added students.

“If that competition drives academic improvement -- and I think to some extent it has -- then I think competition is good,” said Jack Martin, the current emergency manager. “Can there be too much competition? That’s possible.”

Charters are advertising on radio and television. They attracted Chanel Kitchen, 16. She left a city high school last year where there were 42 children in a Spanish class for a charter with about 14.

“I had to make a change,” said Kitchen, who wants to become a corporate lawyer.

Families Bombarded

The Education Achievement Authority also plans to increase marketing after enrollment declined 16 percent to 7,524 after its first year, said Chancellor John William Covington. It has an advantage with an almost year-round schedule and advancement by proficiency, not by grade level, he said.

“We’re going to have to do a better job of getting the word out about our model and the services that we provide that’s infinitely better,” Covington said.

Then there are suburban schools such as the Oak Park School District, which borders Detroit. About 35 percent of its 4,420 students live in the Motor City, Superintendent Daveda Colbert said.

Families may get five to seven pieces of literature by mail or calls from competing districts before the academic year, she said.

“Everybody’s calling everybody,” Colbert said.

Yet, nobody in particular is managing the education market, said Buckman of the Detroit Parent Network. Metzger of Data Driven Detroit calls it “kind of this Wild West.”

Flooded Market

Families, many poor and struggling, aren’t getting enough information to steer them away from low-performing schools, said Doug Ross, founder of New Urban Learning, a nonprofit charter-management organization, and a former innovation officer for Detroit Public Schools. At the same time, charters are “cannibalizing” each other, leading to an unsustainable marketplace, he said.

“It’s as though every car company is producing at 50 percent capacity,” Ross said.

The dogfight may undermine a revitalized community, said Dan Kinkead, director of Detroit Future City, a nonprofit recovery project. Detroit, which General Motors Co. (GM) and the auto industry made the nation’s fourth-largest city by 1950, has almost 150,000 vacant and abandoned parcels.

Viable schools are a key element of the group’s report, a master plan created by political and business leaders. It calls for stabilization within a half-mile (800 meters) of schools that provide education as well as recreational and community services.

Citizen Central

Officials of Detroit Public Schools, which has more closed structures than open ones, said they’re implementing what parents want. That includes music and arts offerings and schools combined with social-service centers, such as at Marcus Garvey Academy on the east side. Besides instruction for elementary students, it offers a health clinic, pool, food bank and a parent resource office with computers and classes such as one last week on household poisons.

“You’ve got one-stop shopping,” said Principal James Hearn.

The situation calls for creative solutions, such as having the state set capacity to regulate the market, said Varner of Excellent Schools Detroit. Ross of New Urban Learning suggested that the state permit only high-performing schools to expand.

“What we owe children in Detroit is to move toward a system of no bad choices,” Ross said. “Anything short of that won’t lead to a revived Detroit.”

To contact the reporter on this story: Mark Niquette in Columbus at mniquette@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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