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Plan to manage Detroit schools' debt crisis moves closer

Michigan lawmakers took a step toward agreeing new plans to solve Detroit Public Schools’ debt crisis, which could see the district run out of cash in just two weeks.

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The Michigan Senate agreed a $720m restructuring plan on Tuesday that would split Detroit’s school district in two, in a bid to create a new public school system for students.

The existing school district will be kept in place, while its huge operating debt is managed down over the next 10 years.

Earlier this month, Steven Rhodes, the state-appointed emergency manager of Detroit Public Schools, said urgent action was needed to deal with the school system’s growing debt problem or else teachers will not receive a pay packet beyond April 8th.

The funding crisis has meant teachers and students are forced to attend rodent and mold infested classrooms, as there is no money for general maintenance of the buildings.

It has led to families fleeing the school district in their droves.

Republican senator Goeff Hansen, said the bills represent a fresh start for Michigan's largest school district.

"Today, we have the opportunity to change the lives of 47,000 children," Hansen, the primary sponsor of the legislation, said according to the Detroit Free Press. "The time for blame is well past. Now is the time for solutions."

The politician said the move would also allow money to be spent on children’s education rather than on paying off the school district’s $515 million operating debt.

“We have a plan that gives Detroit schools a chance to push the reset button, to begin anew,” Senator Hansen said. "This plan will put $1,100 per student in back classroom instead of paying down debt.”

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