CHICAGO — Michigan lawmakers were scrambling Thursday to craft and pass a bill that would keep open a troubled suburban Detroit school district, while on a separate front the state battled with local school officials over the appointment of an emergency manager.
The Highland Park School District was expected to run out of money Friday, facing a “payless payday” for the third time in six months. State treasury officials had advanced aid payments to keep the district afloat the previous two times, but this time they refused to step in.
As an alternative, and at the urging of Gov. Rick Snyder, the Legislature was writing a bill that would allow another school district to take over Highland Park’s buildings or allow its students to leave for another district, with their per-pupil state funding following them.
The Senate and the House were hoping to approve a final bill by the end of the day Thursday. If not, lawmakers expected to pass the measure Tuesday, when the Legislature is next in session.
“We obviously have a crisis in that school district, so we’re working on a way to try to save the students and provide them with an education for the rest of the school year,” said Ari Adler, spokesman for House Speaker Jase Bolger, R-Marshall.
Adler said the state would not advance the district more money to keep it afloat. “We’re not doing that again, and that’s why the district is going to face a payless payday” on Friday, he said.
The district is located in the Detroit suburb of Highland Park and nearly half of its students come from Detroit. Following a review by a state team, Snyder in early January declared the district to be in a state of fiscal emergency, and appointed Jack Martin, a former chief financial officer for the U.S. Department of Education, as emergency manager.
A school board member sued over the move, and last week an Ingham County Circuit Court judge ruled that the review team had violated the open-meetings act. Snyder withdrew Martin’s appointment. The review team met Wednesday in a public meeting, where they re-declared the district to be in a fiscal emergency, and Snyder sent a letter to the board Thursday saying he again agreed with the finding.
The school board was set to meet Thursday night, and the board member who filed the lawsuit said the review board’s new declaration remained in violation of the open meetings act.
The Highland Park School District has $3.5 million of outstanding bonds. Issued in 2005, the bonds were insured by Financial Security Assurance Inc. and featured an underlying rating of AA-minus based on the Michigan State School Loan Bond Fund program. The program ensures that if a district is unable to meet its debt service payment, the state treasurer will cover the payment from the school bond fund.
The district’s next payment is due in May.
