March 22, 2016 / 7:35 PM / 3 years ago

Michigan Senate approves long-term Detroit schools bailout

(Reuters) - The Michigan Senate on Tuesday approved a long-term $715 million bailout package for Detroit’s cash-strapped public schools but did not take up separate short-term emergency funding for the district, which faces a possible shutdown in April.

The package includes $200 million in operating expenses, including improvements to decaying schools and $515 million to pay down debt. It also includes academic reforms and would return governance of the schools to a local board, but with state oversight. They are currently run by a state emergency manager.

House Speaker Kevin Cotter said the bailout plan could not be taken up by the lower house before the legislature goes on break on March 25. He urged senators to vote quickly on a separate $48.7 million emergency spending measure passed by representatives earlier this month.

The long-term bailout would take effect in the next school year, while the emergency spending would be immediate and allow the Detroit Public Schools district, known as DPS, to remain open this school year.

“Because of the five-day rule written into the state Constitution, the House cannot take up the Senate’s long-term DPS plan this week. The Senate can, however, still address the House plan for short-term funding and oversight that we passed last week. That issue has not yet been solved,” House Speaker Kevin Cotter, a Republican, said in a statement.

Peter Wills, chief of staff for Senator Goeff Hansen, who sponsored the bailout package, said the Senate could take up the emergency funds later this week, before the recess, or could extend the session to next week if needed.

Steven Rhodes, a former federal bankruptcy judge appointed by Governor Rick Snyder to run the district, has warned that DPS will not have money after April 8 to pay teachers and staff, which would force him to close schools.

Michigan’s largest public school system, which operates 97 schools for about 47,000 students, is sinking under $3.4 billion of debt and other obligations. Academic performance is among the worst in the United States.

Snyder, a Republican, praised the Senate package, saying it put the district on a path to a sustainable future. He had sought many of the elements of the plan, proposing it be funded using money from Michigan’s share of a nationwide settlement with U.S. tobacco companies.

Reporting by Fiona Ortiz in Chicago; Editing by Leslie Adler, Tom Brown and Dan Grebler

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