Frost advisory issued for much of Michigan

'Detroit fatigue' greets Snyder's Detroit schools plan

Chad Livengood
Detroit News Lansing Bureau

Lansing — Gov. Rick Snyder's push for a financial rescue of Detroit's school system faces political hurdles in a Republican-run Legislature where "Detroit fatigue" is setting in and Democrats want immediate restoration of local control.

The Republican governor's request to tap the School Aid Fund at the expense of all other Michigan schools would cost at least $438 million over several years to relieve Detroit Public Schools of its accumulated debt and avoid another bankruptcy in Michigan's largest city.

"This is going to be a tough slog," said state Rep. Tim Kelly, the Saginaw Township Republican who chairs the House School Aid appropriations subcommittee.

On Thursday, Snyder attempted to confront criticism that his plan for creating a new debt-free Detroit school district will amount to another bailout for Detroit.

"I don't view it as a bailout when it's really being done in the context of getting something stable and working well," he said.

Snyder hoped to model his request for assuming DPS debt after the "grand bargain" he struck with lawmakers last year to pump $195 million into the city of Detroit's pension funds and help Michigan's largest city exit bankruptcy.

But the mood among lawmakers for aiding Detroit schools was not cheery Thursday at the Capitol after hundreds of DPS teachers caused 18 city schools to be closed so they could protest the governor's plan in Lansing.

"I view what happened today as an illegal strike," said Rep. Al Pscholka, chairman of the House Appropriations Committee. "It was disturbing for me. This is about the children, not about the adults. ... It was a terrible message to send this Legislature."

Snyder's plan calls for retaining the existing DPS workforce, their union contracts and pension benefits in a new debt-free school district that would be financed by an additional contribution from state taxpayers of up to $72 million, or roughly $50 per student.

House Speaker Kevin Cotter and Senate Majority Leader Arlan Meekhof both condemned the Detroit Federation of Teachers' protests.

"That really set this thing off on a very poor tone," Cotter told The Detroit News. "If educators are going to shut down the system, maybe we need to let that happen."

DPS has $483M in debt

Snyder said he wants lawmakers to create a new school district and "isolate" $483 million in "crushing debt" in the old district, which would retain the power to collect property taxes to pay down the old debts.

Depending on enrollment in the new Detroit district, the plan would take eight to 10 years and cost the School Aid Fund $53 million to $72 million annually, according to Snyder's office.

Following a model used in Highland Park and other smaller debt-ridden school systems, the old DPS district would use the 18-mill non-homestead property tax to pay down the past operating debts.

Jeff Guilfoyle, vice president of Public Sector Consultants in Lansing, said the alternatives to Snyder's plan could include bankruptcy, refinancing the debt and "kicking the can down the road" or risking a default on bond payments and payless paydays for DPS employees.

"None of the policy options are particularly appealing," Guilfoyle said. "But at some point, you hit a crisis stage because we're not going to not educate 47,000 students. Something has to be done."

Rep. Sherry Gay-Dagnogo, D-Detroit, said Democrats also want to see the state relieve the Detroit district of debt burdens no other school district in the state faces.

"What we can't do is to allow the current debt that's taking off $1,200 from the foundation grant for each student to impede their ability at having a chance of great academic achievement," she said.

Legislature more conservative

The political dynamic that led to last year's "grand bargain" has changed for Snyder. The Legislature approved the aid for Detroit five months before Snyder's re-election as lawmakers reasoned their votes helped pensioners who lived in all of Michigan's 83 counties.

This year's Legislature is more conservative under Cotter and Meekhof's leadership. And House Republicans just took steps to reduce state revenue sharing to the city of Detroit by $4.1 million — in a move seen as punitive by Democrats.

"If Detroit becomes Kalkaska or Buena Vista where suddenly they have to close their doors in the middle of the year, does that change the political dynamic?" asked Guilfoyle, referencing past incidents of schools shuttering mid-year after running out of money.

Kelly has said some Republicans are suffering from "Detroit fatigue" after the grand bargain.

On Thursday, Kelly said the governor's request for new DPS aid is a "golden opportunity" to reignite the debate about creating a taxpayer-funded voucher system to let Detroit children instead attend private schools. In 2000, Michigan voters rejected a constitutional amendment to allow for private school vouchers.

"We need to be a little more creative of how we read the Constitution or go back to the ballot box," Kelly said. "If we were serious about these kids' future, everything would be on the table."

Snyder's plan to jointly appoint a new Detroit school board, where he would appoint four members to the mayor's three members, did not sit well with Democrats who have been fighting six years of emergency management of DPS. Snyder proposed gradually restoring elected seats on the school board during the next six years.

"We strongly believe in local control, not local control way down the road," said David Hecker, president of the American Federation of Teachers Michigan. "I would think that an awful lot of Democrats are going to want to see local control."

Democratic Mayor Mike Duggan blasted the plan, telling The Detroit News: "I do not in any way support it."

"The citizens of Detroit deserve the same representative democracy as do all of the other 547 school districts in the state," Gay-Dagnogo said. "That's a huge concern."

Mixed results

Snyder's track record for getting education reforms passed is mixed. He's gotten lawmakers to pass two emergency manager laws that granted his administration expanded powers to intervene in financially-struggling school districts.

But Snyder was unable to forge a consensus among fellow Republicans to empower his Education Achievement Authority to take over the state's worst performing schools outside of Detroit. The EAA operates 15 former DPS schools and its own fate remains uncertain under Snyder's plan to overhaul governance of all public schools in Detroit.

Rep. Lisa Posthumus Lyons, R-Alto, tried unsuccessfully to get the EAA legislation passed last session and acknowledges that Snyder's DPS plan will face similar scrutiny.

"Anytime you talk about reforming education it gets complicated and convoluted and muddled with misinformation," Lyons said Thursday.

Lyons said her fellow Republicans are "cautious" about another rescue of a Detroit governmental institution.

"But at the same time, it's our obligation — constitutionally and morally — this all comes back on the state, because we're the ones responsible for the public education system here," she said.

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Staff Writer Christine Ferretti contributed.