CHICAGO — Michigan Gov. Rick Snyder has created a new school system that will take over the state’s worst-performing schools, starting next year with 39 in Detroit.
The new authority, called the Education Achievement System, will take over 5% of Michigan schools that are the lowest-performing in the state or under emergency management.
Separately, Detroit Public Schools plans to issue $200 million of fiscal stabilization bonds to eliminate a chunk of its deficit, Roy Roberts, the district’s emergency financial manager, said Monday at the press conference announcing the state restructuring.
DPS officials later said they are “still working on the details” of the borrowing, including the timing and finance team.
Detroit Public Schools faces a $337 million budget deficit that has only grown despite being under state control since early 2009.
The district will submit a five-year plan to eliminate the remainder of its deficit not erased with the borrowing to the state by June 30.
Under the restructuring, DPS will continue to make debt-service payments, collect all local tax revenue, and own all school buildings, officials said.
It is still uncertain whether the new state authority will be able to issue bonds or if it will help pay off existing debt, officials said.
The state has assembled a team of experts that is “working on options for the existing debt” that is “expected to develop a path to resolve this issue by the end of the summer.”
The system will start operating Detroit’s failing schools in September. It will expand to cover the entire state within the next five years.
Snyder called the new authority a public-private partnership and said it would benefit from an infusion of private dollars and resources.
The state hopes the new system will be able to spend 95% of all school funds in the classroom, compared to 55% now. The system will negotiate new labor contracts, officials said.
Principals, not district officials, will have nearly complete control over the new schools.
“It’s a new way of doing things,” Snyder said at the press conference. “For Detroit to be successful, it depends on having successful schools. For Michigan to be successful, it depends on having a successful Detroit.”
The state education department would run the new system, which is a partnership between Detroit Public Schools and Eastern Michigan University. The system would formally be run by the Education Achievement Authority with an 11-member board.
Roberts will chair the new system at least through September 2012, Snyder said.
A school would remain in the system for at least five years.
U.S. Education Secretary Arne Duncan joined in at the press conference via the web.
Duncan said the restructuring could eventually make Detroit a future leader in education.
“We’re not fighting just to save the public school system,” Duncan said. “We’re fighting to save the city of Detroit. We are all united in the desperate need to get better faster.”