Michigan House Approves $48mil Emergency Funding for Detroit Schools

(Photo: 401(K) 2012, Creative Commons)

(Photo: 401(K) 2012, Creative Commons)

The Michigan House of Representatives has approved $48.7 million of emergency funding to be used for keeping Detroit Public Schools open through June. A vote will also be needed to pass a bill that will change the system’s administration, and the Senate must approve the funding measure as well.

The House Appropriations Committee sent the members of the House an emergency allocation that could address an impending unstable cash flow situation for Michigan’s biggest school district, which projects it will have no money by the beginning of next month, reports The Detroit News’ Chad Livengood.

The state does have tobacco settlement funds which were voted for DPS use through a 27-2 vote by committee. The Republican-controlled appropriations committee also voted 18-7 in support of a bill to enlarge the power of Detroit’s Financial Review Commission (DFRC) to include oversight of the DPS.

The DFRC was appointed in 2014 when Detroit’s bankruptcy was complete to oversee and have veto power over the operating budget of the city.

HB 5385 allows the commission to decline or change the Detroit School District’s operating budget and have approval over the choice of the school superintendent and chief financial officer.

The legislators were eager to get the bill passed before their two-week spring break that begins on March 24. The Senate has a week to take action before the recess.

But former bankruptcy Judge Steven Rhodes, who is the interim emergency manager of the district, stated that there is not enough money to pay school employees through April 8, which is the same time lawmakers will be on spring break.

Kathleen Gray, reporting for the Detroit Free Press, quoted one of the legislators:

“This creates a good bridge to get us through to the end of the school year. It give us some breathing room,” said state Rep. Al Pscholka, R-Stevensville. “But that doesn’t give us reason to delay or be lollygagging on the rest” of the school package.

Many of the lawmakers wanted to get the complete package passed, which would have included $715 million to pay the district’s debt and create the new district, in place of just a short-term solution. That approach was interrupted by the legislature’s two-week hiatus.

The DPS package, which the Senate has been designing since the end of last year, includes dividing the district into two entities. One would concentrate only on the debt, and the other would be debt-free and focus on educating students. A new school board membership would be appointed by Gov. Rick Snyder and Detroit Mayor Mike Duggan. Later this year, the board would become fully elected.

The Senate’s leaders are struggling to get their package passed. The House plan also added restrictions on collective bargaining and did not restore school board elections until eight years have passed.

The first action taken upon receiving the $715 million package would be paying back the long-term debt, which is about $515 million. The $200 million left would be used to build a new, debt-free Detroit Community School District. Currently, DPS is spending roughly $1,100 per student on debt service every year, says Brian McVicar of MLive Media Group.