Snyder signs Acts 192-197 to abolish DPS, replace it with state-controlled “community district” that will eventually carry heavy debt load
Acts also attack DPS workers’ collective bargaining and seniority rights
Lawsuit filed to stop dissolution of DPS; says it violates state and federal constitutions by singling out Detroit alone
Steve Conn and Nicole Conaway, two leaders of massive teacher sick-outs of January, on trial at Cadillac Place July 8; protest called for 9 a.m.
By Diane Bukowski
July 7, 2016
DETROIT – First they came for the City of Detroit, the largest Black-majority city in the U.S., stealing its major assets including the $6 billion Detroit Water and Sewerage Department under a contrived bankruptcy deal. Now the same actors have come for what is left of the Detroit Public Schools (DPS) district and the future of the city’s children, 59 percent of whom live under the poverty level.
On June 21, Michigan Gov. Rick Snyder signed Public Acts 192-197, which kill the publicly-run DPS district, founded in 1842, and replace it with a state and corporate-run “community district” including charter schools.
Snyder and DPS Emergency Manager Steven Rhodes, the judge who confirmed the City of Detroit bankruptcy plan, claim they will establish an a new allegedly “debt-free” community district, leaving DPS to pay-off nearly $3 billion in outstanding long-term debt, due through the year 2040.
They are being advised by many of those who engineered the phony Detroit bankruptcy, including Gustav Mulhatra of Ernst & Young and Alex Koch of AlixPartners.
Koch (no discernable relation to the Koch brothers) emailed Snyder on April 28, 2016 that the new debt-free district is a myth.
“We understand that DPS will not avoid any obligations that it currently has as part of the re-structuring,” he told Rhodes. “[However] At the end of 10 years ANY and ALL unamortized obligations left in OldCo [DPS] will be transferred to NewCo [community district] and be an obligation of NewCo.”
He proposed that the state should create a 10 year irrevocable trust to administer payment of the legacy debt.
“We proposed that the existing District be retained and that all obligations designated to be left in OldCO be transferred to an irrevocable 10-year trust to be overseen by an independent trustee. One of the Trust’s provisions would be an irrevocable direction to the Wayne County Treasurer that all real estate tax collections for the life of the trust be transmitted to the Trustee who will be responsible for paying OldCo obligations. At the termination of the trust any remaining obligations are to be returned to NewCo and will be an obligation of NewCo.’
His proposal is reminiscent of the Detroit bankruptcy disposition of the city’s multi-billion dollar art collection into a so-called “charitable trust,” taking possession of it away from the people of Detroit. The Detroit City Council voted to approve that action.
Rhodes has also ordered the DPS to borrow as much as $235 million initially in new “school financing stability bonds,” to restructure its outstanding debt, in addition to $150 million as “transition money” for the new district.
“Stability bonds” are not limited by state law to 15 percent of the assessed value of all taxable property in the district. They will eventually greatly increase the “community district” debt load after 10 years and lead to more taxes on Detroit residents, who will have no say in the administration of the new district. Detroiters are already losing their homes by the tens of thousands due to tax foreclosures.
Similarly, the City of Detroit’s debt load skyrocketed 300 percent after the bankruptcy confirmation, in order to pay off corporate creditors in new bond issues. Part of its debt, the 2005-06 $1.5 billion Pension Obligation Certificates loan from UBS and partners, also recalls Snyder’s plans to borrow money not regulated by the state.
Other parts of the Acts allow the new “community district” to hire uncertified teachers, and eliminate seniority as a consideration in promotions and other matters. The bills define major penalties for school workers who strike and stage “sick-outs,” as they did en masse in January.
On Friday, July 8, a trial begins for two leaders of the days-long teacher “sick-outs” of last January, after all other defendants including the Detroit Federation of Teachers were dismissed from the case by Court of Claims Judge Cynthia Stephens. Some leaders of the DFT joined in supporting a Senate version of the DPS Acts that did not include the anti-union clauses, but still dissolved the Detroit Public Schools.
Former DPS President Steven Conn, a long-time math teacher and respected militant, and Nicole Conaway, who taught at the Catherine Ferguson Academy and fought along with its students to keep it open, remain as defendants.
They are asking supporters of Detroit teachers and residents’ rights to retain the Detroit Public Schools to rally outside the building at 9 a.m. as they face trial.
“Coming at such a critical moment in the struggle around education in Detroit, this trial gives Detroit teachers the chance to begin to turn the tables on Snyder and Rhodes, despite the governor’s recent legislative success,” Conn said.
Also in the Court of Claims are DPS parents and Detroit Board of Education members, who filed suit July 5 for an injunction to stop the death of DPS. Their case, Moore v. Snyder, is being heard by Chief Judge Michael Talbot.
“The essence of the complaint is that Public Acts 192-197 are unconstitutional local acts, because they affect only Detroit and the DPS,” said Attorney Thomas Bleakley, who represents the plaintiffs. “As such, they required a two-thirds majority approval from each house of the legislature and the approval of Detroit electors.”
He said no such two-thirds majority was achieved, and added that the Acts violate both state and federal constitutions.
“The rights of equal protection and due process of all children of the DPS district, irrespective of race and ethnicity, have been violated by the new laws that allow uncertified teachers to be hired in the district while the other 548 public school districts must still use certified teachers,” Bleakley declared.
The lawsuit says, “The school children of the entire state of Michigan constitute a specific and well-defined class. Until such time as this draconian provision may be put into place, this entire class of students is required to be taught by properly-trained certified teachers. DPS children, a group of children isolated and singled out by the new laws, are part of that class. By way of example, a child living on the Detroit side of Eight Mile road is treated by the provisions of P.A. 192 of 2016 differently than a child living on the Ferndale, Eastpointe or Grosse Pointe sides of the road. The law under attack is not facially neutral. The law, P.A. 192 of 2016, seeks to treat DPS children differently than the rest of the class by allowing uncertified persons into their classrooms ostensibly to ‘teach’ them, while no other school district in the state, in adjacent urban districts or remote northern Michigan districts, can legally permit such use of uncertified persons, a “very important discrimination in favor of . ..” non-DPS state-wide students.”
The current Board of Education also disapproved Snyder’s proposed loans at its June 23 meeting, although their decision is likely to be overturned by the Financial Review Commission. At the urging of board member Ida Short, the Board went on record to oppose “the dissolution of the Detroit Public Schools and the creation of the Detroit Community Schools.”
The board demanded in addition that Rhodes provide a forensic audit to back up his claims that the district was in deficit and therefore needed severe solutions. According to the most recent Comprehensive Annual Financial Statements for DPS, for 2014-15, the board ended that year with a $216 million deficit.
Wallace Turbeville of DEMOS earlier reported that the City of Detroit’s only problem was a $167 million deficit which could easily have been resolved by various measures including state restoration of revenue-sharing funds to its cities, which have lost over $700 million in the last 10 years.
President Lamar Lemmons moved to have the Board ask the federal government for an investigation regarding the misappropriation of federal funds under Emergency Managers.
The bills leading to Acts 192 to 197 were hotly debated in the state legislature, particularly by Detroit Senators and Representatives who said they were not involved in drafting legislation for their own district.
Aurora Harris, a parent of a DPS special needs student, reported, “There has been much news concerning the fate of Detroit Public Schools. From the House and Senate Bills to Detroit law makers not being allowed to speak in Lansing during the hearings or decision making session is a “slap in the face” as one Democrat from Detroit previously stated. As an advocate for parents with students with special needs, I’m here to say NOTHING has been discussed about the education and fate of students with special needs in the “old” or “new” planned DPS District, by those who wish to “rule” over or emergency manage Detroit Public Schools.”
State Sen. Morris Hood was furious as he spoke during the Senate debate.
“You coward. You coward—to even take and put this legislation before us and before my community and not even have one Detroiter in the room to help negotiate this piece,” he said.
“We would have said, “Hell no.” Guess what? You go into your caucus, and they go into their caucus and do whatever they want to do to my community—the kids I have to look at everyday walking up and down the street. I have to look in their eyes; you don’t. But you want to make the decisions on their lives, and tell them what kind of life they’re going to have, what kind of education that they have because they don’t have the same education that you get in your district. Why? Because this bill does not do it. This is not the answer. This is the crap that you shoved down our throats, and you shoved down their throats. These kids don’t have a voice here. We are their voice. This is going to impact them for years.”
Lawsuit against DPS dissolution:
State Financial Review Committee package on DPS dissolution bills, etc.
Register of Actions for Continuing Court Action against teacher leaders Steven Conn and Nicole Conaway
#SaveOurKids, #SaveOurChildren, #SaveDPS, #StopSchoolClosings, #MoneyforEducationnotforBanks, #MoneyforEducationnotforwar, #BlackLivesMatter, #BlackLivesMatterDetroit, #BlackEducationMatters, #Beatbackthebullies, #StandUpNow, #StoptheWaronBlackAmerica, #DefendPublicEducation