$617M deal fails DPS, Duggan says

Chad Livengood, and Jonathan Oosting
Detroit Mayor Mike Duggan at the Detroit Chamber of Commerce's Mackinac Policy Conference at the Grand Hotel on Wednesday.

Mackinac Island — Mayor Mike Duggan on Wednesday implored the state’s business and civic leaders to oppose a $617 million compromise Detroit Public Schools bailout that doesn’t include a citywide commission to regulate where schools can open in the city.

At the Mackinac Policy Conference, Duggan said Michigan’s largest school district would be set up for failure without the Detroit Education Commission to control the “chaos” of rapid school turnover in parts of the city where his administration is focused on rebuilding blight-ravaged neighborhoods.

Duggan’s comments came as House Republican leaders were trying to drum up support for a possible Thursday vote on paying off $467 million in DPS debt, giving a new debt-free school district $150 million in transition money and excluding the commission plan.

The House adjourned Wednesday evening without voting on any Detroit school legislation.

“We’re working on something, but it’s still not there yet,” House Speaker Kevin Cotter, R-Mount Pleasant, told reporters after session.

Rep. Tim Kelly, chairman of the House Appropriations Subcommittee on School Aid, said he supports the tentative deal and is encouraging support from colleagues who voted last month for the original House package that included $33 million in transition aid and no commission.

“The price of poker went up a little bit,” said Kelly, R-Saginaw Township. “As I’ve been saying, without the DEC, we’d bump up the pay. That’s the exchange.”

The Democratic mayor predicted the proposed aid package would be wasted unless there is a commission to help stabilize enrollment and finances at DPS.

“They know DPS is going to fail and that $600 (million) or $700 million is going to be blown,” Duggan said. “They know it. The governor knows it. And they’re trying to pass it anyway.”

Duggan said the commission is essential to bringing stability to DPS and charter schools alike.

“Bringing back the riverfront and all of the houses isn’t going to mean a damn thing if we leave the children behind,” Duggan said.

Cotter’s lobbying battle

Cotter would have to drum up at least 55 votes to advance the plan to the Senate, where GOP leaders have been trying to preserve an education commission that could regulate where DPS and charter schools locate in the city. The threshold for approval is lower than the usual 56 votes because a Macomb County Democrat’s seat continues to be vacant.

The compromise proposal would include allowing a school board election for a new, debt-free Detroit school district to happen in November, according to an outline obtained by The Detroit News and verified by multiple sources.

House members spent Wednesday in Lansing after the Senate adjourned earlier in the day so senators could attend the Detroit Regional Chamber’s policy conference on Mackinac Island, where a DPS rescue was the top issue during the opening day of the three-day conference.

Sen. Goeff Hansen, the Hart Republican and lead sponsor of the legislation overhauling Detroit’s public schools, and Gov. Rick Snyder both said Wednesday they are still pushing for the House to include the education commission in the Detroit school district’s rescue plan.

“I’m not ready to give up on where we’re at,” Hansen told The Detroit News at the Mackinac Policy Conference.

House Democrats have advocated for including the education commission in the rescue of DPS.

Minority Leader Tim Greimel, D-Auburn Hills, blasted the developing plan and said the package needs to include a mechanism “to bring rhyme and reason to the location of charter schools” in Detroit.

“If the House Republicans pass what they’re proposing, we’re probably going to be right back in a similar situation where DPS is in fiscal distress within the next five years,” Greimel said.

A summary of the House Republicans’ compromise plan said an advisory board would be created to study where schools are needed, but it would not have the regulatory powers Hansen and Snyder have sought.

Senate Majority Leader Arlan Meekhof, R-West Olive, indicated the outcome rests with the House.

“Stay tuned. It might work out, it might not,” Meekhof told The Detroit News.

The potential deal brewing in Lansing was first reported by The Detroit News on Thursday, but advocates for the education commission, including Duggan, have been making a last-minute push to get House members to reconsider.

“This is a small step in the right direction but wholly insufficient to meet the challenges that we face,” said Brad Williams, vice president of government relations for the Detroit Regional Chamber, which has lobbied hard for the education commission.

Rep. Mike McCready, R-Birmingham, generally supports the education commission concept — which he said “actually had a real purpose and community involvement” — and wants to learn more about how the proposed advisory board would function.

“You want to see who they report to and some sort of action plan to see how those things are carried out,” he said. “I’m not there yet.”

Governor not giving up

Snyder and Senate leaders have been at odds with House Republicans for weeks over creation of the proposed Detroit Education Commission.

“I’m not willing to give up on the concept at this point in time,” Snyder said Wednesday in an interview with The Detroit News Editorial Board.

But Snyder signaled his main priorities for a DPS overhaul center around paying off the district’s $467 million in outstanding debt, giving a new debt-free district $200 million in transition funding and restoring power to an elected school board.

“We need a financial solution, and I want the school board back, in particular,” Snyder said.

Snyder said timing is running short for the Legislature to reach a solution before adjourning June 16 for its summer recess.

“We need to see a solution before they leave for the summer,” he said.

The Detroit Regional Chamber’s annual conference formally began Wednesday with a debate between a Republican businessman supporting the education commission and a charter schools lobbyist vehemently opposed to it. Under the original plan, the commission’s members would be appointed by the mayor.

Charter school authorizers, such as public university boards, already close schools with low test scores through self-imposed accountability standards, said Dan Quisenberry, president of the Michigan Association of Public School Academies.

“That’s the kind of thing we need to be doing — not additional adults, not the exposure of potential city politics into these decisions,” Quisenberry said. “Because let’s face it, when a school gets closed or one is opening, it is a highly provocative situation. Do we want to expose that to additional politics?”

John Rakolta Jr., chairman and CEO of the Detroit-based Walbridge construction company, warned of a mass exodus from Detroit Public Schools this fall if lawmakers fail to agree on a plan without the commission.

“If we don’t pass the Senate bill, ... we’re going to have enormous student loss this October, and you be prepared to go through this whole thing again next year at this conference because we’re going to be another $150 million in hole after we’ve paid off all of this debt,” Rakolta said.