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Schools’ Debt Paid Off as $615.5M End-Of-Year Supplemental Clears Chambers

November 7, 2023

A combined $114.1 million in outstanding school debt relief for Pontiac, Benton Harbor, Inkster and other districts passed the House and Senate Thursday with only one Republican vote as part of a year-end $615.5 million supplemental spending bill that was publicly released and passed by both chambers within a 12-hour window.

The spending bill passed with a party-line vote, 56-54, in the House. In the Senate, Sen. Mark Huizenga (R-Walker) joined Democrats in supporting the legislation, making the vote 21-17.

Under HB 4292 – which was adopted by an appropriations conference committee Thursday morning as CR-1 – the Muskegon Heights School District will receive up to $31.3 million to pay off debt. The former Willow Run Community Schools once serving Superior and Ypsilanti townships, which was consolidated with Ypsilanti Community Schools a decade ago, will get up to $19.36 million.

The Pontiac City School District will receive up to $18.36 million, the now-dissolved Inkster Schools will be appropriated up to $12.12 million, Benton Harbor Area Schools will obtain up to $10.02 million and Ypsilanti Community Schools will acquire up to $5.5 million to pay off its outstanding long-term limited tax debt held by the Michigan Finance Authority.

Before being voted on, Sen. Dayna Polehanki (D-Livonia), who represents Inkster, described how her constituents in the community continue to pay 13 mills in property taxes to cover the remaining debt of Inkster Schools a decade after the state ordered the school district to dissolve.

“Which is not slated to be paid off until the year 2032,” Polehanki said about the debt. “When debt relief is granted, my constituents in Inkster will be paying, at most, between zero mills and eight mills of debt depending on which of the four neighboring school districts their children actually attend. My constituents in Inkster need this relief. They deserve this relief.”

She explained if her constituents someday choose to try resurrecting their school district, it cannot happen if they remain in debt.

The emergency loan debt relief will come from restricted School Aid Fund money.

Rep. Joey Andrews (D-St. Joseph) said in his floor speech that two districts across the river from one another face staggeringly different conditions, a majority Black community school currently under emergency management strapped with billions of dollars of debt and has been slated for closure multiple times, and a majority white community school ranked among the top in the state with an average annual household income of $70,000.

“What could a (school district) do with half a million dollars a year, every single year?” asked Andrews, adding that passing the bill would bring a fresh start and the kids would be given a chance to prosper.

In the House, Rep. Dylan Wegela (D-Garden City) said the bill is especially important for emergency loan debt relief in school districts like Inkster Public Schools in his district. Inkster was created in the 1950s due to redlining, Wegela said, and was closed in 2013 after operating for about 60 years. Students were absorbed into four surrounding school districts and Inkster’s staff was laid off and buildings were demolished.

“Without this bill, residents that do not have Inkster Public School District would still be forced to pay off the school system that does not exist,” Wegela said. “What happened to Inkster Public School District must never happen again.”

Senate Appropriations Chair Sarah Anthony (D-Lansing) said many people believe giving state money is like giving a check to these districts. It really isn’t. It’s kind of the state making sure that they’re relieving it from within as opposed to putting that cost back to the district.”

She illustrated how Ypsilanti Community Schools went through a consolidation process with Willow Run Community Schools without the state mandating it, “but had a large legacy of debt.”

“The people in Inkster don’t have a school district anymore, but are still saddled with this type of debt. You had a place like Marshall and Albion – the kids that are now being bused to Marshall don’t have physical buildings that are up to par,” she said. “All of those districts are majority-minority, and in order for them to get ahead, having some level of relief from the state was really important.”

Outside of the emergency debt assistance to school districts, HB 4292 appropriated $3 million from the School Aid Fund’s School Infrastructure and Consolidation fund for the Marshall Public Schools to spend on a school building within the boundary of the previous Albion school district.

HB 4292 sets aside $30 million from the General Fund to fulfill the state’s duties in an agreement between Highland Park and GLWA for its unpaid sewer and water bills. The term sheet that was approved near the end of October by the water authority’s board assigned the state government with financing and overseeing the installation of water meters in Highland Park.

Other dedicated pots of money featured $50 million in federal COVID-19 recovery dollars for the “Healthy Hydration” fund within the Department of Environment, Great Lakes and Energy (EGLE), assisting schools and childcare centers “located in areas of need” with purchasing drinking water filtration devices.

EGLE will also receive $15 million from the General Fund for PFAS remediation efforts and environmental response activities at the industrial site, which previously operated as a paper mill, possessing more than a mile of Muskegon Lake frontage in West Michigan.

The Great Lakes Water Authority (GLWA), a drinking water distributor and wastewater treatment service provider in Southeast Michigan, will additionally obtain $5 million in federal COVID-19 recovery money for infrastructure repairs.

In terms of economic development, $16.3 million from the General Fund will be added to preexisting special project expenditures in the FY ’24 budget.

Overall, the general government spending bill makes $339.8 million worth of adjustments for the concluded FY ’23, with $234.1 million – more than 68% – being Federal Highway Administration funding to be overseen by the state’s transportation department. Meanwhile, FY ’24 adjustments are valued at more than $275.7 million, with nearly $103.7 million coming from the state’s General Fund.

Also approved in the Senate and House Thursday was SB 174, a $29 million education supplemental bill with $20 million dedicated to special education reimbursements for the past fiscal year and $5 million going to Washtenaw Community College to cover expenses related to its participation in a semiconductor research alliance.

SB 174 passed by a party-line vote, 20-18 in the Senate, and 56-52 in the House with Reps. Tom Kuhn (R-Troy) and John Roth (R-Interlochen) not voting due to absence.

Article courtesy MIRS News for SBAM’s Lansing Watchdog newsletter


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