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Q&A: Michigan passes $617 million revamp of Detroit schools

June 9, 2016

LANSING, Mich. (AP) — The Michigan Legislature has approved a $617 million restructuring of Detroit’s debt-ridden school district — two years after the state bailed out the city to help end the country’s biggest-ever municipal bankruptcy.

This plan, which awaits the governor’s expected signature, is more than triple the $195 million city bailout.

Some questions and answers about the rescue package for Detroit Public Schools:



Debt. Even after Gov. Rick Snyder and lawmakers passed $48.7 million in emergency aid in March, the district still has $467 million in operating debt — taking $1,100 a year per student out of the classroom, much more than in other school systems. Much of the blame can be traced to plummeting student enrollment, due to population decline and children who still live in the city attending publicly funded charter schools or suburban schools instead. The district had 150,000 students a dozen years ago. Enrollment is only 46,000 now, or less than a third. Many kids go to charters (34,000), traditional schools in the suburbs (27,000) or former DPS schools being run by a state turnaround entity (6,000). Other factors include budget missteps and corruption.



Three reasons. One, Michigan is constitutionally responsible for many of the district’s debts and liabilities. The Republican governor warns that not acting could potentially expose the state to billions of dollars in future pension and other obligations. Two, state emergency managers have run the district for the past seven years, making the state culpable. Three, Snyder and other leaders say solid public schools are vital if Detroit’s post-bankruptcy revitalization is going to continue.



The district of nearly 100 schools will be divided similarly to how Detroit-based General Motors was split into two companies after bankruptcy. The existing district will stay intact for tax-collection purposes to retire $617 million in debt over 8½ years, including $150 million for transitional startup costs to launch a new district and to ensure it has enough cash flow to operate until regular state funding comes in October. The new district, which will receive the $617 million infusion of money, will educate students. A new school board will be elected in November and take over in January. A commission of state appointees already overseeing city budgets will review the schools’ finances, too, and sign off on any firing of a superintendent or hiring of a chief financial officer.



The bills do not include the creation of a commission of mayoral appointees to make decisions about opening schools, including charters favored by school-choice proponents and Republicans but opposed by teachers unions and Democrats. Advocates of the panel, which was included in earlier Senate legislation and is backed by Snyder and some within the GOP, say there needs to be a master body in a city with too many schools in some areas and not enough in others. They say charters authorized by state universities are being opened largely unchecked to the detriment of the district. Critics say parents deserve options in a city with the worst academically performing school district of its size in the U.S., and politically motivated commission members would have targeted charters to boost the district.



Teachers — frustrated with poor building conditions, long-running state oversight and worries about not being paid — held a series of mass “sick-outs” that forced the closure of schools this academic year. That angered Republicans who tied the state cash to a tougher anti-strike law that will include higher fines and quicker hearings and rulings on alleged illegal public worker strikes. The legislation also will prohibit the new district from using length of service as a factor in compensation for newly hired teachers, in a bid to force compliance with a 2010 merit pay law that has largely gone unheeded across Michigan.


Online: House Bills 5383-84, 5387 and Senate Bills 711, 820 and 822: http://1.usa.gov/28lY1sT


Follow David Eggert on Twitter at http://twitter.com/DavidEggert00 . His work can be found at http://bigstory.ap.org/author/david-eggert