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2012 House Bill 5566: Increase school and local“deficit spending” debt

Public Act 284 of 2012

  1. Introduced by Rep. Cindy Denby (R) on April 24, 2012, to greatly increase the level of borrowing from the state that school districts and local governments can use to cover “deficit spending” that exceeds their current revenues. Specifically, under House Bills 5566 to 5570, a $5 million annual cap on this state lending would increase to $100 million each year through 2018, and the maximum amount per loan would increase from $3 million to $20 million.
    • Referred to the House Local, Intergovernmental, and Regional Affairs Committee on April 24, 2012.
      • Reported in the House on May 30, 2012, with the recommendation that the substitute (H-2) be adopted and that the bill then pass.
    • Substitute offered in the House on June 7, 2012. The substitute passed by voice vote in the House on June 7, 2012.
    • Amendment offered by Rep. Woodrow Stanley (D) on June 7, 2012, to limit the application of some of the proposed requirements and restrictions to Detroit and the Detroit school district. The amendment passed by voice vote in the House on June 7, 2012.
    • Amendment offered by Rep. Tom McMillin (R) on June 7, 2012, to prohibit pay raises for employees of a city or school district that is given a deficit spending loan authorized by the bill until the loan is repaid. The amendment failed by voice vote in the House on June 7, 2012.
    • Amendment offered by Rep. Tom McMillin (R) on June 7, 2012, to require a city that is given a deficit spending loan authorized by the bill to comply with the 2011 law that required higher employee health insurance contributions. That bill allowed cities (but not schools) to opt-out of its provisions. The amendment passed by voice vote in the House on June 7, 2012.
    • Amendment offered by Rep. Cindy Denby (R) on June 7, 2012, to revise details of loans to a school district from advances from the state school aid fund. The amendment passed by voice vote in the House on June 7, 2012.
    • Amendment offered by Rep. Earl Poleski (R) on June 7, 2012, to require that interest on loans authorized by the bill be no less than the average rate on 10 year municipal bonds, and allow higher rates. The amendment passed by voice vote in the House on June 7, 2012.
    • Amendment offered by Rep. Al Pscholka (R) on June 7, 2012, to allow the state to raise the rates or accellerate the required repayment period of a loan if the municipality or school district is not in compliance with deficit reduction plans required by the bill. The amendment passed by voice vote in the House on June 7, 2012.
  2. Passed 73 to 34 in the House on June 7, 2012.
    Who Voted "Yes" and Who Voted "No"

  3. Received in the Senate on June 12, 2012.
    • Referred to the Senate Appropriations Committee on June 12, 2012.
      • Reported in the Senate on July 18, 2012, with the recommendation that the substitute (S-5) be adopted and that the bill then pass.
    • Substitute offered in the Senate on July 18, 2012, to replace the previous version of the bill with one that increases the amount of deficit spending loans by a slightly lesser amount. The substitute passed by voice vote in the Senate on July 18, 2012.
  4. Passed 27 to 10 in the Senate on July 18, 2012, to greatly increase the level of borrowing from the state that school districts and local governments can use to cover “deficit spending” that exceeds their current revenues. Specifically, under House Bills 5566 to 5570, a $5 million annual cap on this state lending would increase to $85 million each year through 2018, and the maximum amount per loan would increase from $3 million to $20 million. Short term, this would primarily authorize state money for the Benton Harbor, Muskegon Heights, Highland Park and Pontiac school districts.
    Who Voted "Yes" and Who Voted "No"

  5. Motion by Sen. Tupac Hunter (D) on July 18, 2012, to give the bill immediate effect. The motion passed 28 to 8 in the Senate on July 18, 2012.
    Who Voted "Yes" and Who Voted "No"

  6. Received in the House on July 18, 2012.
  7. Passed 81 to 22 in the House on July 18, 2012, to concur with the Senate-passed version of the bill, which authorizes slightly less new state debt.
    Who Voted "Yes" and Who Voted "No"

  8. Signed by Gov. Rick Snyder on August 1, 2012.

Comments

Re: 2012 House Bill 5566 (Increase allowable local government and school “deficit spending” debt)  by tedeum on January 22, 2013 
Conservatives are also wrong when they argue that deficit spending and a large national debt will inevitably undermine economic growth or improve healthcare administration. To see why, we need to simply look back at times when we have run up large deficits and increased the national debt.

Re: 2012 House Bill 5566 (Increase allowable local government and school “deficit spending” debt)  by delia on January 3, 2013 

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Re: 2012 House Bill 5566 (Increase allowable local government and school “deficit spending” debt)  by allice81 on November 6, 2012 
It's funny how the government can find new ways to cover the problems that we have in our country. The real problem is cutting losses and finding ways that they can do their jobs with the funds that are given to them, not borrowing from one place and giving them to others. There are a lot of students out there that need help and tons of young minds that need the same. My advice to them is to continue your education and find ways to keep in schools, even if this means less free time and a tone of work. The system has problems with the education level, the students have problems with the money they owe to schools, is it only me that see this as a more complex then others?

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