BENTON HARBOR — So what happens next?

The Benton Harbor school board has twice rejected state proposals to eradicate a large portion of district debt as well as, the state claims, help improve student achievement, with Benton Harbor High School possibly being sacrificed in the deal.

The way forward is now far from clear.

According to a statement Wednesday from Gov. Gretchen Whitmer’s spokeswoman, Tiffany Brown: “At this point, we are reviewing all of the potential options on how to move forward with identifying a solution that puts Benton Harbor students first.”

At Tuesday night’s school board meeting, it quickly became clear that board members no longer trust the governor’s staff. Board Secretary Patricia Rush said the governor’s staff has been disrespectful and intimidating to the local trustees. She said that at the very least, the board would like to work with different representatives from the governor’s office.

One option is for negotiations to continue with Whitmer’s office, or with a different department within state government.

When contacted by phone Wednesday, Rush said that she doesn’t understand why negotiations were being done through the governor’s office, anyway.

Rush said school board trustees have met monthly – and sometimes weekly – with officials from the Michigan Department of Treasury and Department of Education, as the board prepared to resume local control on June 30.

“We were just ... doing business, just taking care of what was needed both operationally and educationally,” she said. “And then all of the sudden out of nowhere, May 24, the governor gets involved. That’s why this seems completely political – not really related to business operations or education.”

After Tuesday’s meeting, Brown said that by the negative vote, trustees have sent a “troubling” signal to parents that they are unwilling to negotiate in good faith. Brown included an email she said was from Rush to the governor’s office that was upbeat and positive about the collaboration between the trustees and the governor’s staff during a meeting in Lansing on June 26.

Rush said Wednesday that Brown releasing that email is an example of the governor’s staff providing false and misleading information. She said the email only contained fragments of what she sent.

“And there’s a second email that I sent that the state did not release outlining the breach of trust and our reluctance to move ahead,” Rush said.

Rush said the emails need to be released in their entirety if they are released at all. However, Rush would not release the emails, under advice of the board’s attorney. 

Failure is an option

Another way forward is the state could just sit back and let the district fail financially.

Three financial experts have told trustees since February that the district’s ability to borrow money is projected to end in about 18 months to two years. At some point the district will have a payless payday and be forced to close.

Benton Harbor has for years been losing 5 to 10 percent of its students, severely cutting into its finances and causing debt to rise.

Currently, only 36 percent of students living in the school district attend Benton Harbor schools. The rest attend charter schools or other school districts through schools of choice. At current state funding levels, the school district receives almost $8,000 for each student.

The number of students attending Benton Harbor Area Schools has dropped from 3,800 in 2008, to 1,950 in 2019. For the coming school year the student count is projected to be around 1,800.

Another problem is the payments the district is making on the $13.1 million in emergency loans the district has taken out from the state between September 2012 and June 2016. Almost $11 million is left to be paid off on those loans, with that money making up the bulk of the district’s $18.4 million debt.

Those payments are projected to go up from $300 per student during the 2018-19 school year to $500 per student during the 2019-20 school year, the financial experts say.

For years, school officials have tried to attract students back to the school district, with little luck. The only year the student count went up was between the 2015-16 and 2016-17 years, which saw a 41-student gain due to students from Dream Academy, a charter high school that closed, being added to the school district. Without the addition of those students, the student count would have decreased.

Emergency manager law

A third option is for the governor to declare the school district to be in a financial emergency, requiring the district to choose one of the four options under Public Act 436 of 2012 – commonly called the emergency manager law, said Craig Thiel, education research director with Citizens Research Council in Michigan.

“That is primarily a financial tool used for school districts ... which the (Benton Harbor) school district already has experience with,” he said when contacted by phone.

The district had a consent agreement with the state under that law, from September 2014 until November 2018, when the treasury department released the district from the agreement even though the district was still in debt.

At the time, the cooperative agreement was in place and expected to last until July 2023. But changes in the law passed by state legislators in December meant the cooperative agreement went away four years early, on June 30.

Other options school board trustees can pursue under the emergency manager law are allowing an emergency manager take control of the district, declaring bankruptcy, or seeking a neutral reviewer.

Remember Inkster?

Thiel said state officials could chose to use the law that led to closure of the Inkster and Buena Vista districts in 2013. School districts have to meet several criteria to be closed by that law, including that the student count be between 300 and 2,400 students.

In 2013, Benton Harbor schools had a student population of more than 2,800 students and couldn’t be closed using that law.

“It looks like they would qualify now,” said Thiel, who wrote about this possibility in a blog on June 13 called, “State to decide soon whether to breathe life into its dormant school dissolution law, with Benton Harbor in the crosshairs.”

He wrote that the 2013 law allows state officials “to bypass the deliberative processes outlined in the emergency manager law and deal with troubled school districts much more expeditiously, by immediately closing all of a district’s schools, assigning its students to nearby districts, and leaving the ‘old’ one in place to repay debts.”

He said Inkster and Buena Vista are the only two school districts that have been dissolved using this law – so far.

A fresh start

Another option, perhaps a remote one, would be for state officials to forgive the school district’s debt so the students can have a fresh start. More than 12,500 people have signed a petition supporting this idea at www.bhwallst.com.

Started by Benton Harbor resident Elnora Gavin, the petition states that public school students have been under attack by the state for years.

“Michigan’s failed education policies have driven high turnover, unfair testing practices, and cuts to essential programs,” it states. “Marginalized communities have suffered the most. Ironically, the majority of the students here are descendants of slaves who never received promised reparations, yet their daily journey is darkened by a cloud of debt from which they never profited. Under extreme debt, students and staff in cash strapped districts have functioned under the threat of shutdown nearly every year for nearly a decade.”

A resolution based on the petition has been approved by Benton Harbor school board trustees and the Benton Harbor City Commission.

“Once the debt is forgiven, under our new state level administration that values public education and equity, our district will be able to bring back important student centered programs designed to help students thrive,” the petition states. “Incoming dollars will go directly to educating students. To ensure fiscal responsibility moving forward, we also encourage the state to require the district to use an online financial accounting dashboard that will enable the public to track financial progress dollar for dollar.”

Several Benton Harbor High School students who are members of Peace4Life spoke to school board trustees in support of the resolution. More on what is happening can be found on their Facebook page Peace4Lifebh.

Contact: lwrege@TheHP.com, 932-0361, Twitter: @HPWrege