The Gongwer Blog

Roads Redux On DPS As House GOP Squeezes Governor, Senate

By Zachary Gorchow
Executive Editor and Publisher
Posted: May 24, 2016 2:10 PM

House Republicans are using the same tactic that worked so well for them on the road funding debate with the discussions on overhauling K-12 public education in Detroit.

On roads, Governor Rick Snyder wanted $1.2 billion in new revenues. The Republican-led Senate passed a plan with about $800 million in new revenue, and Mr. Snyder embraced it. But then majority Republicans passed a plan with $600 million in new revenue, and it was clear Mr. Snyder and Senate Majority Leader Arlan Meekhof (R-West Olive) were not happy.

Yes, the plan contained a promise of eventually pulling $600 million out of the General Fund in future years to bring the new commitment to $1.2 billion, but that looked shaky then and feels even more so in the wake of the Flint water crisis, Detroit Public Schools financial crisis and revenues for the 2016-17 fiscal year falling short of projections.

But the conservative House Republican majority caucus was adamant that it could approve no more than $600 million in new revenue. It hung tough and eventually Mr. Snyder and Mr. Meekhof concluded something was better than nothing and agreed to the basic contours of the House plan.

Now Mr. Snyder has requested, and the Senate has passed, a bailout for DPS with $715 million in funding over 10 years to retire the district’s crippling debt and assist the district that would replace DPS with transitional costs like critical infrastructure needs. The Senate also included a Snyder request for a new Detroit Education Commission that would have siting authority for all new public schools in the city, including charter schools.

The House has approved the funding to retire debt, but instead approved $33 million instead of the $200 million passed by the Senate for transitional costs. And it omitted the DEC with Republicans saying creating a DEC would be tantamount to declaring war on charter schools. They have questioned the need for the $200 million.

House Republicans are in a good spot strategically on this one, just like roads.

Absent a solution, DPS will start defaulting on its obligations in July. Just like roads, they can force the governor and Mr. Meekhof to choose between something or nothing. Perhaps they will have to concede $33 million is not enough, given the Department of Treasury’s analysis that DPS will run out of money in August under that plan. But it’s easy to see how House Republicans could declare victory if they can get a number smaller than $200 million and no DEC.

Mr. Snyder has always said his priority on DPS is to split up the district so that DPS exists only to retire the debt and a new district, debt-free, is created to run educational operations. He backs a DEC, but has made it clear it’s not mandatory.

So it seems likely that, provided enough money is there to keep the new Detroit Community School District financially sound, he would support a plan with no DEC.

The question is the Senate.

Sen. Goeff Hansen (R-Hart) won considerable plaudits from Democrats for his outreach and putting together a plan that passed with bipartisan support. Mr. Meekhof has strongly backed Mr. Hansen.

Neither has said a DEC is a must, but it’s also clear both think a solution that has the best chance of working is one with buy-in from local officials and Detroiters, not one foisted upon them by the Legislature. Mr. Meekhof could likely pull together the votes to pass a plan with support only from Republicans if he had to do so, but it would be an ugly scene in the Senate if it goes that way and leave in question whether the Detroit officials charged with implementing the changes actually believe they will work.

The closer July 1, the date when DPS will run out of money absent an overhaul, gets, the more pressure for a deal. Is taking action contrary to what their usual allies in the charter school industry want a line in the sand issue for Mr. Meekhof? Surely that is a question House Speaker Kevin Cotter (R-Mount Pleasant) and his caucus have pondered extensively.

So will this end as the road debate did, with the House Republicans getting their way? Or is there a card Mr. Meekhof could yet play to shift the dynamic and put the House GOP in a tougher spot and avoid another high-stakes negotiation concluding as the roads one did. If Mr. Meekhof has a, er, trump card, it’s getting close to the time to play it.

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