A $114 million plan will pay off the debt of the Ypsilanti Community School (YCS) district as part of the $615 million spending bill, House Bill 4292, passed by Michigan lawmakers.
After the State House’s approval on Nov. 2 and a signature from Gov. Gretchen Whitmer, the YCS school district will have its remaining debt and outstanding school bond loan fund balances paid off after receiving $42.2 million of the total $114 million in funding.
Supporters of the debt forgiveness say it will pave the way for struggling school districts to have better opportunities.
“This will give the district a lot of financial relief to finally be able to put more money into the classrooms, as well as pay the teachers and supporting staff more,” Rep. Jimmie Wilson (D-Ypsilanti) said.
Michigan’s Treasury Department will be directed to pay up to $19.3 million for the former Willow Run Community Schools, which merged with Ypsilanti in 2013. This will aid in paying off the district’s outstanding school bond loan fund balances.
In addition, $17.3 million will be given to YCS that will grant them the option to either retire debt of the former Willow Run Community Schools, or for student improvement initiatives.
Ypsilanti Community Schools will receive up to $5.5 million to pay outstanding tax debt held by the Michigan Finance Authority.
This debt had a great impact on the YCS school district, and has for years.
“Every year off the top of their operating budget, they [YCS] had to spend 2 million dollars on debt,” Wilson said. “This greatly affected the district the past ten years since the school districts consolidated. They had to take out multiple loans from the Department of Treasury to pay the bonds in a school district where home values have greatly depreciated.”
Other districts included in the debt forgiveness are Benton Harbor, Inkster, Muskegon Heights and Pontiac.
Benton Harbor will receive up to $10.02 million for Benton Harbor Area Schools to pay outstanding emergency loan balance. The former Inkster School District, which the state dissolved in 2013 to pay outstanding school bond loan fund balances, will receive up to $12.1 million. Muskegon Heights School District will receive up to $31.3 million, and Pontiac up to $18.3 to pay their outstanding emergency loan balance.
“Eradicating this debt is the final step in making our schools, once again, a world-class education system,” Rep. Brenda Carter (D-Pontiac) said in a written statement.
In order to receive this funding, YCS, along with the other four school districts, must offer strategic plans with school board training programs, and partner with local school districts to implement policies that increase attendance and graduation rates for all students.
