Gov. Snyder signs bill with stopgap DPS funding

Shawn D. Lewis and Chad Livengood
The Detroit News

Lansing — Gov. Rick Snyder’s signature Tuesday of a $48.7 million emergency funding bill for Detroit Public Schools helps the district avoid borrowing another $30 million to stay afloat this school year.

At the start of March, the cash-strapped school system was planning to seek a $30 million cash advance on its state funding in June to meet payroll, according to DPS financial records.

DPS spokeswoman Michelle Zdrodowski said Tuesday that district officials believe they no longer need to borrow more money with the infusion of additional state funding.

The state’s largest school district was in danger of starting to run out of money by April 8. As part of the Detroit schools legislation, the Financial Review Commission that currently oversees city government would see its oversight powers extended to the school district — but only in the event a state-appointed emergency manager is no longer in place.

Detroit schools is spending $3,019 of its $7,296 per student grant this school year repaying past and current operating debts, The Detroit News first reported Jan. 4.

Financial records show the district’s debt repayments surpassed the cost of employee salaries and benefits in February and this month.

The supplemental spending bill is designed to help the district stay solvent through the end of the school year while legislators continue to debate long-term rescue options, including a $715 million Senate bailout package. The Legislature is on a two-week spring break.

“There was a pressing need in Detroit that lawmakers from all across the state came together to address, and they got it done quickly,” Snyder said in a statement. “This continues to demonstrate that the challenges at DPS aren’t just Detroit’s problem, they are concerns for all of Michigan.”

The $48.7 million is a stopgap measure while the Republican governor and Detroit Mayor Mike Duggan, a Democrat, press the GOP-controlled Legislature to enact a $715 million restructuring plan to split the district in two and pay off operating debt over a decade.

The Senate last week approved a $715 million DPS rescue plan, but the bipartisan bills face an uncertain future in the more conservative House, which is developing its own plan.

House Speaker Kevin Cotter, R-Mount Pleasant, has said he remains concerned by some aspects of the long-term Senate plan, including the proposed Detroit Education Commission, which could prevent new charter operators from opening schools in the city.

“I would classify that as my greatest topic of concern right now,” he said of the proposed commission.

Cotter told reporters last week the Senate proposal to return day-to-day control of the district to an elected school board in August may also “cause some reservations” in the House.

“We’ve got to be comfortable that a return to a locally elected board can happen and can happen smoothly,” he said.

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Detroit News Staff Writer Jonathan Oosting contributed.