Michigan Senate OKs $617M bailout for Detroit Schools


LANSING, Mich. (AP) — The Michigan Senate approved a $617 million bailout and restructuring of Detroit’s debt-ridden school district late Wednesday, two years after the state spent money to help the city government emerge from bankruptcy.

The legislation will soon reach Gov. Rick Snyder for his expected signature as long as the House OKs some changes. The Republican-controlled Senate narrowly passed a main bill, 19-18, after it won passage along party lines in the GOP-led House last week.

The financially and academically ailing 46,000-student Detroit Public Schools has been managed by the state for seven years, during which it has continued to face plummeting enrollment, deficits and, more recently, teacher sick-out protests.

Under the bills, the district would be split in two and control would be returned to an elected school board. A commission of state appointees would oversee the district’s finances, similarly to how it now reviews the city’s budgeting as part of a $195 million state rescue in 2014

The new debt-free district would educate students. The old district would stay intact for tax-collection purposes to retire $617 million in debt over 8½ years, including $150 million in transition costs to launch the new Detroit Community Schools.

The vote came more than a year after the Republican governor proposed an overhaul. He said debt was crushing Detroit Public Schools and warned that insolvency would leave the state with billions of dollars in liabilities and stifle Detroit’s recovery post-bankruptcy.

Before Wednesday’s action, there had been fairly broad agreement on the need to help the district.

But Democrats united against the bills, expressing concerns that the money would fall short of what is needed to adequately help a district decimated by declining enrollment — both due to population loss and many students in the city attending publicly funded charter schools or suburban schools.

Some Republicans were reluctant to offer taxpayer support to the state’s largest school district that for decades has grappled with mismanagement and corruption, while others joined with Democrats in contending the deal failed to include a commission to regulate the opening of new schools, including charters that have drawn students away from traditional neighborhood schools crucial to city’s long-term revival.

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