House panel OKs $48.7M in emergency aid for DPS
Lansing — The Michigan House of Represenatives is poised to vote Thursday on $48.7 million in emergency funding to keep Detroit Public Schools operating through June and pass a bill overhauling the school system’s governance.
House Appropriations Committee on Wednesday sent the full House an emergency appropriation that can be used to address a looming cash flow crisis at the state’s largest school district, which has projected it will run out of money early next month.
The additional funding for DPS will come from the state’s tobacco settlement fund and was approved on a 27-2 vote by the committee.
The Republican-controlled appropriations committee also voted 18-7 in favor of a bill that expands the scope of Detroit’s Financial Review Commission to include oversight of the Detroit school district.
The commission was created in 2014 at the end of Detroit’s bankruptcy to provide long-term oversight and veto power over the city’s operating budget.
Under House Bill 5385, the Financial Review Commission would be empowered to reject or revise the Detroit district’s operating budget and approve the appointment of the school superintendent and chief financial officer.
“We need some assurances that that money is going to be spent responsibily and I think with that in place there will be support on our side for sending the additional money,” said House Speaker Kevin Cotter, R-Mount Pleasant. “I think it’s important that we act now. We want to avoid the situation of cutting the school year short.”
Lawmakers are moving quickly to pass the emergency financial aid before they leave Lansing on March 24 for a two-week spring break. If the House approves the funding bill Thursday, that would leave the Senate a week to act before the recess.
Retired bankruptcy Judge Steven Rhodes, the interim emergency manager of DPS, has said the district only has enough money to pay employees through April 8— while lawmakers plan to be on spring break.
Legislators on both sides agree the cash-strapped Detroit district needs addtional money. But they are at odds over changes in governance and employee benefits.
Democrats want to remove powers for the financial review commission to block the Detroit school board from firing the superintendent or altering his or her contract.
“The FRC oversees financial issues when it comes to the system. It should not be appointing the superintendent,” said Rep. Fred Durhal III, D-Detroit.
Rep. Sam Singh, D-East Lansing, abstained from voting on the bill and said the legislation could make changes to the commission that would run afoul with the city of Detroit’s court-approved bankruptcy exit plan.
“This is not ready for prime time yet,” Singh said.
The legislation also would require new DPS employees to enroll in either a 401(k) retirement plan or a hybrid pension and defined contribution plan.
Republicans who authored the legislation also included a clause strengthening the power of Detroit school administrators to crack down on coordinated teacher sickouts that mirror illegal employee strikes.
Democrats characterized the legislation as a continuation of state control of DPS after nearly seven years of emergency management that has failed to eliminate the district’s chronic deficits and stop a hemorrhaging of students.
“Detroit Public Schools has gone further into debt, had lower academic performance problems, more discipline problems and has been in an utter free-fall since the state got its hands on DPS,” said Rep. Jeff Irwin, D-Ann Arbor.
Irwin later added: “Every other time we’ve sent a high-priced expert in from out-of-town with a suit and a nice briefcase, they’ve only made things worse.”
Rhodes and Snyder asked lawmakers for $50 million in immediate aid, but there was only $48.7 million remaining in the tobacco settlement fund this fiscal year to use, said Rep. Al Pscholka, chairman of the House Appropriations Committee.
Pscholka, R-Stevensville, said changes to the financial reform bill will be made on the House floor.
“This is not the final solution,” he said. “This is a way to make sure the children of Detroit will have school for the rest of the year.”
Senate Republicans have expressed concern about approving the emergency aid for the Detroit school district without passing Gov. Rick Snyder’s larger $715 million, 10-year plan to relieve the district of debt and better manage public education choices in the city.
Pscholka said the emergency aid “creates a good bridge” to keep DPS afloat but does not relieve pressure on lawmakers to act on the larger package.
“That does give us reason to delay or lollygag on the rest of it,” he told reporters after the hearing.