Committee Passes $48.7M Bill To Keep Detroit Schools Open Until End Of Year
LANSING (WWJ) - Michigan lawmakers are making moves to make sure the Detroit Public Schools district has enough money to stay open through the end of the year.
The state House Appropriations Committee on Wednesday approved a $48.7 million supplemental bill to keep DPS afloat until the end of the school year. The vote was 28-to-one. Republican John Bizon, who represents the 62nd District in Calhoun County, was the lone no vote.
Committee chairman Al Pscholka said the money will come from a tobacco fund that was part of a national settlement -- not Michigan's school aid fund.
"School is open and we will continue to work on making sure that we have quality education and quality choices for children in Detroit," Pscholka said. "But we also have to take action on the immediate crisis that we have in front of us, which is that April 8th deadline when the district could run out of money."
Pscholka said the money isn't a loan, but would count against the larger $515 million debt package being hashed out in Lansing.
The bill now goes to the full house.
Transition manager Steven Rhodes last week urged lawmakers to move quickly.
"The last pay period that we will be able to fund the payment of our staff for is the pay period that ends on April 8th, so this is an urgent matter for us," he said.
Rhodes, the judge who guided Detroit through the largest municipal bankruptcy filing in U.S. history, reiterated to lawmakers that he doesn't think bankruptcy is a viable option for DPS because much of the district's debt is secured or guaranteed.
"The total debt is a little over $500 million and about 90 percent of that debt, all but about $50 million of it, is not the kind of debt that a bankruptcy case can deal with very well," he said. "If there's a third-party that's guaranteed a debt, it's very hard for the bankruptcy to discharge that guarantee. So, what we're left with in a bankruptcy is, realistically, is the option to deal with $50 million of vendor debt and it's just not worth it. It's not a viable option."
It's unclear when lawmakers will vote on the total debt reform package. Among the bills that could be taken up by members of the Government Operations Committee is one that would take $715 million in taxpayer money over the next 10 years to pay off DPS debt.
The Detroit school district has been under state control since 1999.
