When Detroit Public Schools published an audit last November that projected the district’s bankruptcy before summer, government officials from Lansing to Detroit began wondering what to do. The state’s "takeover" of the district in 1999 was a "radical" reform that was supposed to have solved the district’s financial problems, not leave it $200 million in debt. The $200 million question now becomes, What do you do when radical reform fails?

Gov. Granholm responded to this financial morass the way government usually responds: She started forming a committee to study the problem. Instead, she should embrace a straightforward strategy.

First, the state should be forthright with Michigan citizens about the cause of this fiasco: The district is rapidly losing students. This ignominious trend started before the Legislature created the district’s reform board in 1999, but the exodus has continued unabated. With fewer students, the district gets less state money.

Exactly how bad is the student loss? In the past a half-dozen years, the district has lost more than 30,000 students — a decrease of nearly one-fifth of its student body since 1998. A Detroit Free Press review of census data in 2002 indicates that Detroit families are fleeing the district for charter schools and better public schools in neighboring districts.

And why shouldn't they? What possible incentive would parents have to keep their children in a district with a roughly 50 percent graduation rate and a history of some of the worst standardized test scores in the state?

Second, the Legislature and the governor should recognize that more state intervention in the district — a "takeover of the takeover," as the Detroit NAACP puts it — will be an abject failure. The district is simply too big, too complicated and (frankly) too intransigent to be straightened out by any one guru — or even a gaggle of them. At this point, one hopes no elected official would consider another "takeover" to be an option in a city that just voted to end the reform board model imposed by the state.

Third, the Legislature and the governor should realize that borrowing money to repay existing debt will not solve the district's problems anymore than a Band-Aid will alleviate internal hemorrhaging. Michigan law requires schools to eliminate debt within two years, and there isn't any compelling reason why Detroit Public Schools should be given a pass, especially given the district’s practice of hiring personnel while losing students in recent years.

Fourth, laying off employees and closing school buildings is appropriate. "Rightsizing" — a buzzword for reducing the size of government to match demand for its services — is a sensible first step.

Granted, Detroit Public Schools is the largest employer in the city, presently employing more than 22,000 people. But the school system is not a jobs program. If a district doesn't have the students, it shouldn't employ the staff.

Fifth, it's time for the Legislature and the governor to amend Michigan's charter school law and allow the unrestricted competition of charter schools in the city. This will signal the unions that the halcyon era of uninterrupted taxpayer funding for lousy schools is over.

What does it matter if the Detroit Federation of Teachers can't — or won't — accept this? They will continue opposing charter schools out of unabashed self-interest until the last gavel falls. Nevertheless, forcing schools to compete for students is the only viable solution, both economically for the state and academically for the students.

Sixth, Detroit's — and Michigan’s — best hope is for the Legislature to enact an education tax credit like the one we've long-proposed at the Mackinac Center for Public Policy.

With such a credit, more families can choose successful private schools, such as Detroit's nationally famous Cornerstone Schools. Students succeed at these schools at a fraction of the cost of the public system. There is no valid reason to prohibit families from directing some of their own tax dollars (or a contributor’s tax dollars) to schools they choose.

The months ahead are going to be bumpy. The district’s CEO, Ken Burnley, is apparently leaving at the end of the school year. The reform board will probably name an interim CEO after he leaves. A few months later, in January 2006, the district will then revert to an elected board that will, in all likelihood, hire yet another superintendent.

As important as these things are, what matters most is giving Detroit's children the chance to attend schools that will educate them properly. Whether Michigan’s leaders will finally enact meaningful reforms to accomplish this is the real question.

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Brian L. Carpenter is director of the leadership development initiative for the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.