Duggan pitches compromise for Detroit schools

Chad Livengood
Detroit News Lansing Bureau

Mackinac Island — Mayor Mike Duggan offered his unexpected endorsement Wednesday of Gov. Rick Snyder's plan to create a new debt-free Detroit school district and proposed a compromise to restore an elected school board in exchange for continued financial oversight.

Duggan used a keynote speech during the opening day of the three-day Mackinac Policy Conference to appeal to 1,500 of the state's business, civic and political leaders to get behind Snyder's plan, which is facing early hurdles in a GOP-controlled Legislature averse to rescuing Detroit's school district from chronic debt.

The Republican governor has called on lawmakers to assume at least $438 million in operating debt that diverts nearly $1,200 per student annually from classroom instruction.

"The only way this is going to happen is if the people outside Detroit join in this mission," Duggan said. "The only way we're going to get this done is if the folks in this room decide these aren't Detroit kids, they're everybody's kids."

Duggan's support of Snyder's Detroit schools overhaul plan comes after he initially blasted the governor's proposal to have the two leaders appoint a new school board.

The mayor offered a compromise to have an elected school board whose financial decisions could be vetoed by a state-appointed financial review commission — the same structure Duggan and City Council live under in post-bankruptcy Detroit.

Duggan suggested holding a school board election as early as this fall, though the spring of 2016 is more likely.

"Let's elect a school board in the city that's going to lead the city forward," Duggan said.

Duggan also supported the creation of a citywide Detroit Education Commission with the power to close chronically failing schools operated by DPS and charter schools.

The mayor somewhat begrudgingly said he would favor mayoral appointees running the commission.

"This is going to end the really good approval ratings I have right now," Duggan joked.

The surprising support from Duggan for Snyder's Detroit education overhaul came on the same day the governor conceded that he may need the entire summer to build support in the Legislature for dedicating as much as $72 million annually in state fund toward paying down the 47,000-student school district's debt.

Snyder said he plans to hold meetings with small groups of legislators to talk about road funding, long-term economic development strategies and the need for the state to relieve the Detroit district of at least $438 million in operating debt.

"That will be part of the exercise over the summer to start figuring (out) support and getting people to understand ... we need to be thinking beyond Detroit," Snyder told The Detroit News. "This could be and should be applicable to other places when it's relevant. Much of this debt, in some capacity, is backstopped by the state."

Snyder's plan to create a debt-free Detroit school district has run into early roadblocks among fellow Republicans in the House and Senate, while his proposal to maintain long-term state control of the district has drawn the ire of Democrats.

Rep. Tim Kelly, a Saginaw County Republican and influential education subcommittee chairman, said the governor is "having a hard time finding sponsors" within the Republican majority for his Detroit school bills. Kelly opposes the current plan.

"This is dead on arrival," Kelly told The News.

Two leaders of a coalition of business and civic leaders have noticed the early legislative stalemate as they urged Snyder and lawmakers to assume DPS debt racked up by state-appointed emergency managers.

"I perceive that Lansing's not listening, especially the Legislature," said John Rakolta, CEO of the Walbridge construction company. "They have to stand up and be courageous and tackle this problem."

Because lawmakers are mostly focused on putting together a road funding package this summer, legislation reforming Detroit schools may have to wait until September, said John Walsh, Snyder's strategy director.

Snyder said it could be about two weeks before the DPS bills are introduced, but a concerted effort to get them passed would not happen until September.

Snyder and leaders of the Coalition for the Future of Detroit Schoolchildren used the first day of the Detroit Regional Chamber's annual policy conference to draw attention to their plans for overhauling DPS. More than 200 people packed into a room at the Grand Hotel to listen to Rakolta and Skillman Foundation CEO Tonya Allen, who also co-chaired the committee.

"The Detroit public school system is bankrupt. Totally bankrupt," said Rakolta, who spent three months studying the cash-strapped district's finances. "And yet we all sit back, and we're doing nothing."

Rakolta noted the district is in the process of refinancing $377 million in debt to push out the payment schedule.

"The legacy costs are killing the kids," Rakolta said in an interview.

DPS Emergency Manager Darnell Earley said the refinancing of long-term operating debt frees up $82 million.

"We're not just borrowing money and doing business as usual," Earley told The News. "We've got to restructure the district to make sure the district survives."

In late March, the 36-member coalition urged Snyder and the Legislature to assume DPS debt racked up by emergency managers and put an elected school board back in charge of the 47,000-student school district.

Snyder largely endorsed the coalition's call for state assumption of the debt, asking lawmakers to dedicate $53 million to $72 million annually for several years to pay off a $483 million operating debt. A $72 million state contribution to DPS debt would cost about $50 for every other student and school district in the state, according to the Citizens Research Council of Michigan.

But the governor did not endorse immediately handing control of DPS back to elected officials. Instead, he proposed creating a school district governed by a board jointly appointed by himself and Duggan, who has rejected the plan in favor of an elected school board.

Allen continued to push for a locally elected school board to return to power after nearly six years of state control by four emergency managers appointed by Snyder and former Gov. Jennifer Granholm.

Snyder and the coalition's plans have gotten a cool reception in the Legislature, in part because of a perceived "Detroit fatigue" that's setting in for some lawmakers who voted last year to inject $195 million into Detroit's pension plans to help end the city's bankruptcy.

"How do you have fatigue for the largest city in the state?" Allen asked. "How do you have fatigue for state issues? That is your sole job."

Duggan: I won't run for gov

Detroit Mayor Mike Duggan is growing tired of being asked whether he wants to run for governor in 2018.

The Democrat was asked again Wednesday evening by journalist Carol Cain during a question-and-answer session at the Detroit Regional Chamber's Mackinac Policy Conference.

"I will not be a candidate for governor in 2018," Duggan said. "I will not be a candidate. Don't ask me again."

The mayor said after he took office in 2013 that he didn't plan to run for another elected office again besides mayor.

Chad Livengood