Detroit school board rejects state rescue plan; Snyder to press on

Image 1 of 5

The Detroit School board rejects a $150 million loan from the state, designed to create a new, debt-free district.

The board believes it can come up with a better plan that will save money and funnel more dollars into the classroom. But how much does the board's opinion really mean?

"We demand an audit," said Elena Herrada, Detroit Public Schools board member. "We ask the media to stand with us in demanding an audit and we ask the media to stand with us in asking (U.S. Attorney) Barbara McQuade - where have you been."

Detroit Public Schools board member Elena Herrada is calling on the U. S. attorney to investigate the state, joining with her colleagues in opposing the DPS bailout approved by the legislature and signed by Gov. Rick Snyder.

"And not one Detroit legislator voted for this package," she said. "Why are we allowing people who have destroyed black and brown education throughout the state to now come in and collect at a rate of 18 percent on our children's money."

The board is opposed to this language in the bailout: "$235 million dollars in bonds to be paid back at an interest rate not to exceed 18 percent."

It also includes a $150 million loan and a plan to split the district in two, as of July 1.

"With the appropriation and allocation of the $150 million, the district is now solvent," said Lamar Lemmons, president DPS board. "So we question the rationale for continued emergency management at all."

“Detroit Public Schools are175 years old - there is absolutely no reason to dissolve it at this time."

But Gov. Rick Snyder says the plan is solid and his spokesman says the interest rate on the $150 million loan is estimated at about two percent.

It's unclear what the interest will be on the $235 million in bonds.

"We're going to move forward with the legislation," Snyder said. "Again they have opportunities to use the court system like anyone else but I'm moving forward with implementing the legislation

The Detroit Public School board wants to present its own plan - but the state's emergency loan board has the authority to reject it. It is a policy they call a racist assault on public education.

"As a grandparent with children in the Detroit public schools - we are at war," said Helen Moore, DPS activist.

"Highland Park, Benton Harbor, Muskegon Heights, Inkster - whose schools were demolished - every black school district in the state of Michigan has no avenue of redress for their schools being destroyed," Herrada said.

The elected board will present its plan Wednesday and send it to that emergency loan board -  they say they'll take legal action if it's rejected.

As for whether or not there's a federal investigation into the state's handling of d-p-s finances - both the U.S. Attorney and the FBI tell FOX 2 - no comment.