Gov. Snyder signs $617M Detroit schools bailout

Michigan Gov. Rick Snyder delivers his State of the State address to a joint session of the House and Senate, Tuesday, Jan. 19, 2016, at the state Capitol in Lansing, Mich.

LANSING, Mich. (AP) — Michigan’s governor signed a $617 million bailout and restructuring plan Tuesday for Detroit’s public school system, just two years after the Republican agreed to help end the city’s bankruptcy.

The financially strapped Detroit Public Schools has been managed by the state for seven years, during which time it has continued to face plummeting enrollment, deficits and, more recently, teacher sick-out protests. The district now has roughly 46,000 students.

Under the new law signed by Gov. Rick Snyder, the district will be split in two on July 1 and control of the new district will be returned to a school board to be elected in November. A commission of state appointees will oversee that district’s finances, similar to how it now reviews the city’s post-bankruptcy budgeting.

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

Democrats, the teachers union and others opposed the legislation, saying it doesn’t provide enough to fix dilapidated buildings. Opponents also note it lacks a commission of mayoral appointees to regulate the opening of new schools — including independent, publicly funded charters that have drawn students and funding away from the district.

Snyder warned Republican lawmakers that bankruptcy would have been the worst possible outcome for Detroit children, the city’s recovery and districts across the state left with billions of dollars in liabilities.

He signed the school rescue plan in private Tuesday — without the bipartisan harmony that existed during his public signing of the “grand bargain” bankruptcy bailout in Detroit in 2014.

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