Affidavit of Harold Brown

    No. 72-8002

IN TEE UNITED STATES COURT OF APPEALS 
FOR THE SIXTH CIRCUIT

BOARD OF EDUCATION OF THE SCHOOL 
DISTRICT OF THE CITY OF DETROIT, 
a school district of the first 
class,

Appellant,
vs.
RONALD BRADLEY, et al, 

Appellees.

On Appeal from the United States District Court 
For the Eastern District of Michigan 

Southern Division

AFFIDAVIT OF HAROLD BROWN



No. 72-8002

IN THE UNITED STATES COURT OF APPEALS 
FOR THE SIXTH CIRCUIT

BOARD OF EDUCATION OF THE SCHOOL 
DISTRICT OF THE CITY OF DETROIT, 
a school district of the first 
class,

Appellant,
vs.
RONALD BRADLEY, et al,

Appellees.

AFFIDAVIT OF HAROLD BROWN

State of Michigan )
) ss.

County of Wayne )

HAROLD BROWN, being first duly sworn, deposes and 
says as follows: . -

He is the Secretary and Business Manager of the Board 
of Education for the School District of the City of Detroit and 
as such, has under his direct supervision all the financial 
affairs of the School District.

LOSS OF BASIC TAX BASE
Since 1960, the Detroit school system has been heading

for a financial crisis beginning with removal of substantial



amounts of property from the tax rolls of the City of Detroit as 
the result of the building of freeways, urban renewal projects, 
the building of hospitals and other tax exempt enterprises. In 
addition, the 1967 disturbance in Detroit caused more property 
to be removed from the tax rolls. It is estimated that between 
1960 and 1971, the School District of the City of Detroit lost 
some $110,000,000 as the result of removing property from the tax 
rolls and reduced value in Detroit property. This situation is
perhaps the largest single factor in the present school financial 
crisis.

ADDITIONAL INCREASED COSTS AND LOSS OF REVENUE
The following other factors have either increased costs 

or caused additional loss of revenue:

A. A decision of the Michigan Supreme Court requiring 
school systems to provide free textbooks and supplies to all
students have cost the system approximately Three Million Dollars 
each year;

B. A decision by the Governor to use his authority to 
withhold funds from school systems in order to balance the State's 
budget has cost the School District approximately Six Million 
Dollars in the past two years;

C. A decision by the legislature permitting the Wayne 
County Allocation Board to allocate 0.25 mills of the money 
normally going to the Wayne County School System to finance the 
Wayne County Community College has cost the Detroit school system 
approximately One Million Dollars per year.

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• •

D. The continued use of 0.64 mills that normally would 
go to the Detroit school system to support the City's public 
libraries has cost the school system approximately 3.7 Million 
Dollars per year.

BOARD ECONOMIES UNDERTAKEN
Despite this overwhelming loss of revenue, and additional 

cost factors, the Detroit school system has attempted to operate 
by cutting costs and has done the following:

A. In the past 30 months, it has cut approximately 
44 Million Dollars in expenses.

B. It has reduced the number of teachers in the system 
in 1970-71 from approximately 10,609 teachers to approximately 
10,141 at the present time.

C. It has trimmed a total of approximately 51 admini­
strative positions.

D. Since February, 1972, no promotions in the admini­
strative ranks have been authorized.

E. The Detroit school system has so reduced its admini­
strative staff that now it has approximately 0.23 administrators 
per 1,000 students as compared to approximately 0.77 in Birmingham, 
approximately 0.71 in Warren and approximately 1.26 in Oak Park, 
all suburban school districts within the metropolitan Detroit 
desegregation zone.

F. The Detroit school system teachers are not
the highest paid school teachers in the Detroit area, but are

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paid a salary that is slightly below the average of the teacher 
salaries in various school districts in the Metropolitan Detroit 
area and that in the current year, the Detroit teachers received 
no salary increases whatsoever.

THE CURRENT DEFICIT AND CASH SHORTAGES 
Despite all of the above efforts for the 1971-72 school 

year, the School District ran a deficit of approximately 38 million 
dollars which it financed by loans against future revenue. The 
State of Michigan required said loans to be paid back in September, 
1972. As matters now stand, the projected cost of operating the 
School District will result in an 80 million dollar deficit by 
June, 1973. More specifically, the financial figures are as 
follows:

November December January
1972______  1972 1973

Beginning Balance $ 11,647,000 $ 9,100,000 $ 900,000Revenue -
Property Taxes 320,000 5,700,000 21,700,000State Aid - 21,300,000 -
State Aid Loans 22,000,000 - * - — .
Other Revenue 2,533,000 1,400,000 2,500,000Total Funds Available 36,500,000 37,500,000 25,100,000Expenditures -
Payrolls 24,000,000 32,600,000 19,200,000Other 3,400,000 4,000,000 5,000,000

Ending Balance $ 9,100,000 $ 900x000 $ 900x000

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Beginning Balance
February 
$ 900,000

Revenue -
Property Taxes -
State Aid 21,300,000*
State Aid Loans 20,000,000
Other Revenue 4,200,000

Total Funds Available: 46,400,000
Expenditures -

Payrolls 23,600,000
Other 4,500,000

Ending Balance - • $ 18,300,000

Beginning Balance
May
$ (30,900,000)

Revenue -
Property Taxes 300,000
State Aid -

State Aid Loans -

Other Revenue 4,000,000
Total Funds Available (26,600,000)
Expenditures -
Payrolls 22,100,000
Other 4,500,000

Ending Balance $(53,200,000)

March April
$ 18,300,000 $ (7,100,000)

500,000 700,000

2,700,000 3,800,000
21,500,000 (2,600,000)
23,600,000
5,000,000

23,600,000
4,700,000

$ (7,100,000) $ (30,900,000)

June
$ (53,200,000)

300.000
600.000

4,700,000
(47,600,000)
28,100,000
4,300,000

$ (80,000,000)

* This figure should be moved to December, 1972, if State 
Aid is advanced, but it will not change the deficit 
occurring in March, 1972, or thereafter.

On or about November 8, 1972, the School District was 
faced with such a severe cash shortage that it could not meet 
existing payrolls. Fortunately, the School District was able 
to borrow 22 Million Dollars against April 1973 State Aid to 
overcome the immediate cash shortage. Under State law, the 

Superintendent of Public Instruction can advance some 20 Million

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Dollars of State Aid by December 31, 1972, which advance, on 
information and belief, will not provide sufficient money to 
run school beyond February or early March, 1973.

As the above financial figures indicate, the School 
District cannot in any way run beyond March 15, 1973, at the 
latest, as there will be no money available as all tax receipts 
will have been collected and spent and all'State Aid payments 
will have been collected and spent or pledged to existing loans.

The School District has attempted to meet the financial 
crisis by going to the voters four times since 1968, including 
three times in 1972. Each time the voters have rejected millage 
and m  May, 1972, August, 1972 and November 7, 1972, have rejected 
a renewal of an existing 5 mills which represents an approximate 
loss of 28.8 Million Dollars a year for the schools.

Even with the above-cited reduced costs; namely, approxi­
mately 470 less teachers and approximately 51 less administrators 
and working under a most stringent budget, which, among other 
things, does not provide for adequate maintenance, it still 
will cost approximately 257 Million Dollars to run the School 
District, plus 38 Million Dollars to pay back the deficit of 
the 1971-72 school year. The system is receiving only 215 
Million Dollars from all sources, making the 80 Million Dollar

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deficit. The growing financial crisis that began in 1960 has 
arrived. There is no more money. There are no more loans. 
The system cannot operate beyond early March, 1973, without 
further financial relief. .

November <5.}̂ , 1972,

Subscribed and sworn to before
me this

r
17 day of November, 1972,

///

Notary Public, Wayne County, Michigan 
My Commission expires:

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