LANSING, Mich. – When Michigan House Republicans passed a stripped down version of a state rescue package for the state-controlled Detroit Public Schools district, leaders were adamant it provided more than enough “transition” funding to get the new district created in the plan on a solid financial start.
The district's current operating debt is $467 million.
The Senate was a lone voice saying it fell short, but now its a chorus.
Gov. Rick Snyder, DPS transition manager Judge Steven Rhodes, Business Alliance of Michigan, Coalition for the Future of Detroit School Children and now an independent Treasury report suggest that under the House plan, the district would be in an $80 million hole as soon as September -- when the new school year is only a few days old.
"I think we need additional resources beyond the $515 million. That simply repays the debt. There are investment needs, working capital requirements to really put people in a position for success," Snyder said.
The Senate version of the plan offers $200 million in transition funding, while the House version offers $33 million.
The Treasury report obtained by Local 4 concludes: “The package of bills by the Senate provides enough new money to transition to the NewCo. The House passed package leads to a projected cash flow deficit of $22M in August, rising to $80M in September.”
The House has a version of the Senate package waiting for action, but passed its own rescue package amid frustration with Detroit teacher sick-outs last week.
Senate sources are suggesting this new information from Treasury may give House members justification to re-consider last week’s vote, given the House did not have the best information available when the decision was made.