Michigan Senate OKs bailout package for Detroit schools

Bailout package moves to uncertain future in House

By Guy Gordon - Reporter/Anchor

LANSING, Mich. - The Michigan Senate has approved a revised set of bills to eliminate $515 million in debt from the Detroit Public Schools. 

The bailout package passed the Senate with a 21-16 vote. There was bi-partisan support. 

Local 4 has obtained copies of the substitute legislation which calls for the transfer of control from the state to a locally elected school board as soon as Aug. 9. Board members would be elected to serve staggered terms of 3 to 6 years.

View the legislation for SB-0710 here.

Like the original bailout bills, the substitutes call for the creation of a new “community” school district which will move forward, leaving the old debts behind with the old district.

Millage collections will re-pay the debts of the old district, while state tobacco settlement money will fund the new district until old debts are re-paid.

The bill also appropriates $50 million to fund the current district through June -- $200 million will be spent to cover the costs of creating the new district, which will become operational July 1. 

Detroit Senate Democrats, Detroit Mayor Mike Duggan, and many school leaders score a significant victory with the creation of a Detroit Education Commission. The DEC would regulate where and when any new charter or DPS school would open in Detroit.

DPS leadership and the Mayor have long complained unregulated growth of charters have siphoned away students and funding from DPS schools. 

Duggan has said he supports school choice, but wants local control over where new charters operate, and to grant approval to charters with a proven track record of success.

The seven-member commission would be appointed by Duggan and consist of an expert in school accountability, two education professionals from DPS, two education professionals from existing charter schools, and one parent each representing charter and DPS schools.

According the Citizens Research Council, roughly $3,000, or 40 percent of the state education grant per pupil is spent to make payments on the debt. 

This is money not spent in the classroom.  

By eliminating the debt payments, lawmakers and DPS leaders believe they can pump more money into instruction. DPS transition leader, former bankruptcy judge Steve Rhodes has told lawmakers the district is financially stable and would be running a $13 million surplus without the burden of servicing old debt.

Lawmakers caucused Tuesday morning to review the language of the new bills. They needed 20 votes to pass the Senate. 

Statement from Detroit Mayor Mike Duggan:

I wholeheartedly support education reform legislation that accomplishes four goals:
-The end of state emergency management over the Detroit Public Schools and return to a locally elected school board as soon as possible.

-The return of EAA schools to DPS.

-The State assuming full responsibility for all DPS debt.

-Establishment of a locally appointed Detroit Education Commission to regulate the opening and closings of all DPS and Charter Schools in the City of Detroit through a single, objective standard

The legislation before the Michigan Senate today accomplishes these four key goals. I have wholeheartedly supported this legislation and urge members of the Michigan Senate to vote yes. This proposed bi-partisan legislation would not have been possible without the full support and efforts of Gov. Snyder, Senate Majority Leader Meekhof, Minority Leader Ananich, Senator Hansen, as well as Detroit Senate Delegation.

Statement from Judge Rhodes:

Detroit Public Schools transition manager Judge Steve Rhodes, who warned of the district's cash crisis, released this statement Tuesday afternoon: 

“The passage of the $715 million education reform package by the Michigan Senate signals the start of a new future for Detroit Public Schools; a future that returns control to a locally elected school board.  I want to thank all of the Legislators who put Detroit’s students and families first in their deliberations and, ultimately, came to a compromise that creates a solid foundation on which a school board elected by Detroiters can build. I also want to thank all of the District’s employees and supporters who reached out to their legislators to express how important the passage of this education reform legislation is to the Detroit community. As I have said previously, Detroit cannot complete its recovery without a fully functioning, viable school system. While there is still major work to be done, I believe this legislation moves both the City and the District in the right direction.”

 

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