Two different plans to bailout the massively indebted Detroit Public Schools have emerged from Lansing in recent weeks. The price tag could be upwards of $700 million.
DPS could run out of money as soon as April, according to officials from the state’s largest school system, and state leaders are rushing to find a fix.
State Capitol reporter Jake Neher explains plans in the Senate and House.
Legislation in the Senate, which has the endorsement of Governor Rick Snyder, would restructure the district into two entities. The old DPS would exist only to pay down debt and collect taxes, while the new district would be in charge of educating students. The plan would also end the unpopular Education Achievement Authority.
The money would come from tobacco settlement funds, paid over ten years.
“It’s the least controversial place this [money] could come from,” says Neher.
The House plan is similar to Senate legislation, although it is more far-reaching in reforming the district. It restricts union activities and collective bargaining rights, while slowing the district’s return to local control. DPS has been under state control since 2009. The DPS school board wouldn’t have full power for eight years under the House legislation.
Neher says this House plan could be a message to Detroit lawmakers.
“The practical effect could be that this is an ultimatum to Detroit lawmakers to take the deal that’s on the table right now [in the Senate],” Neher says.