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Benton Harbor school board to meet as deadline set to expire for deal with state

Dustin Dwyer
Michigan Radio
The Benton Harbor Area Schools board meets on Monday.

Today is the deadline Gov. Gretchen Whitmer set for a deal to be reached between her administration and the Benton Harbor Area Schools board over the district’s future.
The governor’s office says the district is $18.4 million in debt, and could run out of money next year if the high school doesn’t close for the 2020-21 school year. The governor has asked school board members to approve a new agreement that calls for closing the high school. If they don’t approve the agreement, the governor says the entire district could be dissolved by the state.

But school board members have unanimously opposed the governor’s proposed agreement. They say they have a plan to keep the district solvent without closing the high school.

The board has a public meeting scheduled for noon Friday.

Members also met with officials from the state department of Treasury on Wednesday to try to reach an agreement.

Part of the problem, according to a financial overview provided by the Treasury department, is that BHAS’s debt payments are scheduled to rise in 2020 from $556,000 to $910,000. The state says those debt payments would amount to $491 for every student in the district.

But school board members say they’ve already approved a plan to refinance the debt.

“We already refinanced those debts last week,” school board vice president Joseph Taylor said on Monday. “And we’re just waiting on approval from the Department of Treasury. So that’s already refinanced. So there won’t be anything going up. That’ll be a $300,000 savings.”

Much of the $18.4 million in debt is debt owed to the state. School board members and community leaders have called on the state to simply forgive that portion of the debt, so the district can move forward.
State treasurer Rachael Eubanks says that could be possible, with approval from the state Legislature.

“The amount of emergency loans, which is a direct state loan to the district, is approximately between $10 million and $11 million,” Eubanks says. “That is the amount in terms of transition assistance that I know the governor and her team have had with the legislature to assist the school district through this transitional period.”

But there’s a catch.

The governor says she’ll only go to the Legislature with that plan if the district approves her administration’s proposal.

So far though, the two sides have not been able to come to an agreement. 

Dustin Dwyer reports enterprise and long-form stories from Michigan Public’s West Michigan bureau. He was a fellow in the class of 2018 at the Nieman Foundation for Journalism at Harvard. He’s been with Michigan Public since 2004, when he started as an intern in the newsroom.
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