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Michigan lawmakers apparently have reached a compromise in the standoff over legislation to send more than $500 million to rescue the Detroit Public Schools from insolvency.

The compromise legislation reached among legislative leaders will provide the $500 million to pay off DPS debt and significant additional funds to cover start-up costs, sources say, but leaves out the controversial Detroit Education Commission.

Several sources say that while still fragile, the deal, vital to the restructuring of DPS, is expected to be voted on next week in time for lawmakers to salvage at least part of their plans to attend the Detroit Regional Chamber’s Mackinac Policy Conference, which begins Tuesday.

House Speaker Kevin Cotter had said he would keep the House in session all week if a deal wasn’t reached.

The Senate plans to wrap up its business on Wednesday, sources say. The House is planning to finish its session early Thursday so representatives can be on the island for the closing sessions and parties.

“We’ve had very productive negotiations and I would say discussions are going well. But we are still talking about it and have more work to do,” Gideon D’Assandro, Cotter’s press secretary, said Wednesday.

Key to moving the House was setting aside the Detroit Education Commission, not surprising given how strongly Cotter has come out in favor of protecting school choice. He’s remained adamant that a bailout of DPS must not hamper charter schools. Under a Senate-passed version of the DPS package, the commission would have been appointed by the Detroit mayor and have authority to approve openings of any new charter or district school and help set the criteria for school closures. The House version, passed earlier this month, leaves out the DEC.

The deal in the House comes just ahead of a last-ditch pitch by Detroit Mayor Mike Duggan on behalf of the commission. The mayor is meeting at the Manoogian Mansion tonight with some of the most influential charter school operators with the goal of trying to assuage their fears about the commission. As of Wednesday, some operators indicated they were open to listening to the mayor.

Democrats and many Detroit stakeholders have made a strong call for the commission, saying it’s essential for school quality and oversight. Yet the legislation treats DPS schools more leniently than charters, and the incentive is clearly to boost enrollment at the struggling school district.

Charter advocates fear this would put at risk charter schools in Detroit, which already enroll more than half the city’s students.

Charter operators have been the key lobbying force with House members against the DEC, which is why Duggan is hoping to bring them aboard. But the effort by the mayor may be too late to make a difference in the Legislature, which now appears to be primarily interested in getting this issue off its plate.

Senate leaders and Gov. Rick Snyder signaled last week that they were ready to back away from inclusion of the commission to get a deal done.

The other sticking point has been over how much funding should be included for the start-up of a new Detroit district that will be debt free and able to focus on students. Snyder and the Senate have maintained $200 million is required for transition costs and building improvements.

But the Republican-controlled House didn’t think they had enough information about why that amount was needed and how exactly it would be allocated, so they only included a $33 million loan in their package.

Cotter said this week he was willing to consider a higher amount now that he has seen a better breakdown of the $200 million from the Treasury Department. The compromise deal is expected to include more than $100 million to cover start-up costs and keep the district solvent until savings on the debt kick in.

The two chambers had also been at odds over measures to impose merit pay, stronger strike penalties and limit collective bargaining for Detroit teachers.

The House will drop most, if not all, of those demands under the compromise, sources say.

Passage of the deal next week would ensure no payless paydays and provide enough time for a new school board election later this year. And it prevents lawmakers from punting a long-term solution until its lame duck session this fall — a possibility floated by some legislative leaders in recent days.

“In my perfect world, we’ll get it done,” Cotter says. “I am optimistic.”

ijacques@detroitnews.com

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