CHICAGO — Wisconsin Gov. Jim Doyle yesterday announced a package of education-related reform legislation that would hand the control of the struggling Milwaukee Public Schools system over to the city’s mayor.

Doyle announced the package, which included control of the system and statewide reform proposals, yesterday alongside several Milwaukee lawmakers who support the measures and would serve as sponsors when the bills are introduced. Doyle might seek a special session of the Legislature to consider the mayoral control issue this year.

“This issue is not about political disagreements between adults, it’s about doing what is right for our children, and it is obvious the current system is not working. This is an important reform that will provide a clear line of accountability for Milwaukee schools and set them in the right direction,” Doyle said.

Under the plan, the district would be managed by a superintendent appointed by the city’s mayor. An elected school board would remain in office to influence decisions and represent local concerns although it would be stripped of much of its power, under the proposal.

The superintendent would control all budget and fiscal issues, curriculum issues, and school building decisions, and manage collective bargaining. The mayor would have responsibility for setting the district’s annual tax levy. Voters would get the chance to weigh in on ongoing district control every seven years after the legislation is adopted.

The legislation would also eliminate principal and administrative tenure and establish a Children’s Zone modeled after one in New York City’s Harlem community that provides integrated services including child care, transportation, and health care with local schools.

Doyle and Milwaukee Mayor Tom Barrett, both Democrats, have promoted in recent months the proposed shift in control, though no formal plan had been announced until yesterday. Milwaukee School Board President Michael Bonds has said he would step down if the Legislature adopts the change.

The district manages its own finances but the city of Milwaukee, either through Comptroller W. Martin Morics’ office or the city’s redevelopment authority, issues debt on the district’s behalf. The school system currently has $97 million of outstanding general obligation debt issued through the comptroller’s office and $142 million of pension and other lease bonds issued through the authority.

Another $110 million of annual appropriation Neighborhoods School Initiative bonds that are repaid with transportation aid remain outstanding through the authority. Morics’ office also issues revenue anticipation notes on the district’s behalf, including $228 million that sold over the summer.  The office is also working on the sale of up to $53 million of GO-backed qualified school construction bonds later this year or next.

The district carries an issuer credit rating of A1 from Moody’s Investors Service. Standard & Poor’s assigns an A-plus.

The district has struggled academically and financially. After three consecutive years of surpluses, the district drew down $12.4 million in fiscal 2008. The district expects to close its books on fiscal 2009 with a cash-flow surplus of $2.4 million following cuts that included elimination of 200 positions. The fiscal year-end projections for 2010 show a draw of $4.1 million partially due to state aid reductions and declining enrollment.

“Moody’s believes that the ability of the district to maintain structural financial balance will be an important factor in future credit analysis and continued diminution of reserves or departure from projected financial results may indicate a deterioration of credit quality,” analysts wrote in a summer review.

Enrollment has declined at an annual average of 2.4% over the last five years, leading to a drop in state aid. The state’s public voucher program is a key contributing factor. The district expects $609 million in general state aid in 2010, a decrease of $8.8 million from last year, but the same amount that was projected this year.

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