DPS to get bridge loan; Benton Harbor schools in financial emergency

Aug 20, 2014

Credit Sharon Drummond / Flickr

A state loan board will choose between two competing proposals to give a short-term bridge loan to the Detroit Public Schools. One is from the district’s emergency manager. The other is an alternative proposed by the school board.

The district is under the control of an emergency manager while it digs out of a deficit. The district’s teachers are opposing a plan to close 24 schools and cut their pay by 10%. This would be the second round of pay cuts for Detroit teachers.

Gov. Rick Snyder says the district’s troubles require tough choices.

“Detroit public schools have been a challenge for a lot of years. That’s something that I think I’ve already stated,” he said. “We need to be looking at a broad set of options longer term because it’s been a difficult set of circumstance and there are other, new ways of looking at things that will be better for the kids.”

The governor has also agreed with an official finding that the Benton Harbor school district in West Michigan is in a financial crisis. But the governor says he thinks the state can make an arrangement with the district that avoids a takeover.

“In Benton Harbor’s case, Benton Harbor schools, there’s a good possibility we could have a consent agreement. The school board seems very interested in that, the superintendent, so we’re working through that.” 

The district could also ask the governor to name an emergency manager, or seek permission to file for bankruptcy. The city of Benton Harbor is in the process of transitioning out of emergency management.

There are three Michigan school districts currently under emergency management. The Pontiac schools are operating under a consent agreement with the state.