Lansing — A compromise plan to save Detroit Public Schools from potential bankruptcy hit major snags Tuesday in the state Senate, including opposition from a key legislator and a new long-term projection that the deal may cost the state an additional $88 million.
The $617 million plan could ultimately carry a $705 million price tag because of future interest costs, according to a Senate Fiscal Agency report released Tuesday, which highlighted a potential hit to the School Aid Fund that supports districts across Michigan.
“This is a very difficult thing for people to understand and to vote for. We’ve got some work to do yet,” Majority Leader Arlan Meekhof, R-West Olive, said after the Senate adjourned without voting on the six-bill package approved last week in the House.
The legislation calls for the state to provide Detroit schools with $72 million a year in tobacco settlement revenue — up to the $617 million total — but Meekhof said the Senate will look to authorize and identify a source for another $88 million.
“We recognize there was not an accounting for some of the finance costs, so we’ve got to change that,” he said.
Any Senate changes would require House approval, slowing a process leaders still hope to complete this week. But the financing issue should not be a deal breaker, said House GOP spokesman Gideon D’Assandro.
“DPS gets every dollar they need,” D’Assandro said. “We’re not short on helping DPS, it’s just that we have to help identify the financing costs and money the state needs to move around in its own bank accounts.”
The escalated cost estimate came the same day as the architect of a bipartisan plan to save Michigan’s largest school district said he could not vote for new package approved by House Republicans without Democratic support.
“I’m trying to make sure we put something through that works for Detroit, that works for the Detroiters, and that they’re part of the solution,” said Sen. Goeff Hansen, R-Hart.
Hansen told reporters he does not support the new package, in part, because it does not include the Detroit Education Commission to regulate school openings, a concept backed by Gov. Rick Snyder and Mayor Mike Duggan but opposed by the charter school lobby.
Asked if the compromise plan would set Detroit schools up for failure, Hansen said “that’s a huge concern” of his.
Meekhof is struggling to secure the 19 votes needed to pass the package crafted in negotiations with House Speaker Kevin Cotter and Snyder. Senate Republicans were split on a $715 million plan approved in March, and most Democrats have signaled opposition to the new version.
“We wanted it to be bipartisan,” Meekhof said of the plan sent over by the House. “It doesn’t look like that’s where we’re going to land.”
Hansen said he is not actively lobbying against the plan but talking to Republican colleagues who ask.
“They have to make up their own minds that fit their district,” he said.
Aiming for 19 votes
With Hansen opposing the plan and Democrats criticizing various provisions, Meekhof may need to secure seven more Republican votes than he did for the Senate plan approved in March.
Sen. Jack Brandenburg, R-Harrison Township, is one of the flip votes. He opposed the Senate plan but intends to vote for the compromise version, primarily because it does not include the Detroit Education Commission that would limit charter school openings.
“Anybody with a brain in their heads knows Mike Duggan does not like charter schools,” Brandenburg said about Detroit’s mayor. “The DEC is a very convenient way for the mayor and the anti-charter folks to do away with charter schools.”
Duggan has repeatedly denied the suggestion that the commission, which he would appoint, would target charter schools or limit parental choice. He says the regulatory body would ensure that schools are evenly distributed throughout the city to meet student needs.
Brandenburg said the $617 million bailout would provide better value for taxpayers than allowing the district to go bankrupt, which could cost the state “three or four times” more. But he said it’s the last time he would be willing to provide assistance.
“It’s a rope,” he said. “Pick it up and run with it and succeed. If you want to hang yourself with it, be my guest.”
‘Unethical’ GOP solution
Sen. Bert Johnson, one of several Detroit-area Democrats who supported the $715 million Senate plan in March, said he opposes the new version and thinks it would be “unethical” for Republicans to foist a solution on the district without the input of local legislators.
“It’s not a compromise,” said Johnson, D-Highland Park. “It’s a one-sided version of what they think is best, and they’ll own this. This is a failure of leadership, this is a failure of policy-making and this will certainly fail the system.”
Under the new plan, Detroit voters would elect a new school board in November. The board would hire a new superintendent, but the city’s post-bankruptcy Financial Review Commission would oversee district finances and have a say in some employment decisions.
The legislation calls for an advisory council that would produce reports highlighting where schools are needed and study a potential city-wide transportation system to serve all students. The six-member council would include district officials and charter representatives.
The deal has House-proposed reforms, including increased penalties for teacher “sickouts,” merit pay and the option for the Detroit school board to hire non-certified teachers to fill vacancies.
Johnson said he thinks the legislation would ultimately create a “separate but unequal” system for public education in Detroit.