Detroit school rescue plan hits resistance

Chad Livengood
Detroit News Lansing Bureau

Lansing — Gov. Rick Snyder’s quest for a $715 million state rescue of Detroit Public Schools is running into trouble in the Legislature even before the legislation has been introduced.

Top legislative leaders are questioning not only where the money should come from but the kind of reforms the financially troubled district should be required to adopt as part of the aid package.

The money may not come from Michigan’s School Aid fund as Snyder has proposed, Senate Majority Leader Arlan Meekhof said Thursday.

Meekhof said lawmakers are exploring other ways for the state to assume $515 million in DPS debt and provide $200 million in start-up funding for a new Detroit school district.

“We haven’t identified a source yet,” Meekhof told reporters.

Detroit’s increasingly insolvent school district remains one of the most vexing and unresolved issues facing the Legislature this year after lawmakers sent Snyder a $1.2 billion road-funding plan earlier this week.

Tapping the $12 billion School Aid Fund would eliminate $50 in school funding annually for each of Michigan’s 1.5 million students for the next decade — a major point of contention for some lawmakers.

“It raises concerns,” said Sen. Phil Pavlov, a St. Clair Township Republican and chairman of the Senate Education Committee. “(But) it’s coming from the pockets of the taxpayers regardless of what fund it’s pulled from.”

The Senate adjourned Thursday without the introduction of long-expected legislation overhauling Detroit schools.

Even without the formal bills, lawmakers are discussing the major sticking points, such as future governance of the Detroit district and whether Snyder’s plan is the best approach.

“We sure don’t want to just throw more money on a situation ... that’s just going to reoccur,” said Senate Floor Leader Mike Kowall, R-White Lake Township. “If I could have my way, I would just turn around and say ‘Look this isn’t working, we’re going to have to go to a vouchers system and let these kids go wherever they go.’ ”

The Detroit district, which has been under state control by emergency managers since 2009, hasn’t provided enough information about how it racked up its debts to satisfy House Speaker Kevin Cotter, spokesman Gideon D’Assandro said.

“It’s like a man showing up at the IRS with a shoe box of receipts,” D’Assandro said. “It’s really hard to get accurate data from the school district.”

House Republicans also are concerned about a special appropriation for DPS lowering the available funding for students across the state, he said.

“We want to take our time and make sure we’re doing right by them,” D’Assandro said. “Nobody wants to fix this and be back here next year having the same conversation and writing the same check.”

DPS Emergency Manager Darnell Earley and State Treasurer Nick Khouri appeared before a House committee last week and painted a dire picture about the finances of the 47,000-student school district.

Following the hearing, both Republican and Democratic legislators are questioning how the Detroit district has projected debts of $157 million owed to the state’s school employee pension fund, $47 million in unpaid vendor bills and $266 million for past borrowing to keep afloat.

“Why has the state allowed this to get as bad as it has?” asked state Rep. Sarah Roberts, a St. Clair Shores Democrat.

Democrats want a locally elected school board back in charge of the district, Roberts said. Snyder’s plan calls for him and Mayor Mike Duggan to jointly appoint a school board followed by a gradual election of new members by 2021.

“I think there’s going to be a lot of problems on the Republicans in terms of the money aspect,” Roberts said. “And I think there’s going to be a lot of problems on the Democratic side from an organizational aspect of how it’s managed and run.”

Snyder said Wednesday he hoped to see Senate action on the bills by Nov. 12 — before lawmakers recess for their annual two-week November break for firearm deer hunting season and the Thanksgiving holiday.

“The whole topic is a challenging topic, I don’t want to underestimate it,” Snyder told The Detroit News. “I think it’s prudent that we should move forward.”

Snyder spent the summer discussing with lawmakers his proposal to relieve the Detroit district of an operating debt that costs it at least $1,100 per student annually. But the issue was tabled for public debate until the Republican-controlled Legislature reached a deal on road funding, which came Tuesday.

“The sooner we get this done, the better we can be prepared for next school year,” Snyder said.

The governor has been pushing fellow Republicans to send him legislation overhauling Detroit’s educational system before the New Year.

“I would call that overly optimistic,” D’Assandro said. “It’s probably not a conversation that should be rushed.”

clivengood@detroitnews.com