Under the guise of “rescuing” the Detroit Public Schools (DPS), the Michigan state legislature has approved an education restructuring package, by one-vote margins in both the House and Senate, that represents a major escalation of the attack on public education in the city.

The passage of the bill early Thursday is the culmination of a conspiracy by Democrats and Republicans, aided and abetted by the unions, to safeguard the interests of hedge funds and other large investors at the expense of students and teachers. The $617 million package includes $467 million to pay off DPS operating debt and a paltry $150 million to fund the creation of a new district, Detroit Community Schools (DCS), that would take over education operations in the city. The old DPS would remain merely as a vehicle for paying off debt.

Michigan Republican Governor Rick Snyder praised the bill, calling it an “unprecedented investment for the education of Detroit children.” He is expected to sign it into law next week.

In remarks to the Detroit Free Press, DPS Emergency Manager Steven Rhodes also indicated his support for the legislation, although it provided less money to DCS than he had originally requested.

The $150 million allocated to the DCS would be a loan, not a grant, which the schools would have to pay back with interest. Only $25 million of that money could be used to refurbish the district’s decayed and unsafe buildings. Meanwhile, all the tax money collected by DPS would be diverted to debt repayment, with none actually going to cover education costs.

The legislation provides for the establishment of an elected school board, but real power would be in the hands of a state-appointed Financial Review Commission. While the bill nominally ends emergency management of the Detroit schools, de facto state control would remain in place. The act confers new powers on the state school reform/design officer, who would hold many of the same powers as an emergency manager.

Education Achievement Authority (EAA) schools are returned to the control of DCS, but these schools will continue to pay lower salary and benefits to school employees, including teachers, for an additional two years. The EAA was set up supposedly to turn around low-achieving schools, but in fact has been used to further undermine public education.

The latest attack on education in Detroit follows seven years in which DPS has been under emergency management by state-appointed financial dictators. During that period the system has been bled dry, with the closure of scores of schools, the proliferation of charters, and savage attacks on teachers. Today there are just 46,000 students remaining in the DPS, compared to 150,000 in 2002.

The restructuring package contained most of the elements of the Republican-sponsored House plan. It beat out a Senate version of the bill that, while nearly the same in most features, provided somewhat more money to the new district, barred the hiring of non-credentialed teachers and created a Detroit Education Commission to oversee both traditional and charter schools. The Senate version was favored by the Detroit Federation of Teachers as well as initially by Snyder and Rhodes.

The bill enacted by the House contains a raft of reactionary features, including increased sanctions against teachers who engage in “illegal” strikes, and a requirement that salaries for new teachers are based on job performance and measurements of students’ performance, in other words a merit pay scheme. It also permits the hiring of non-certified teachers. In a move to bring the unions on board, however, the bill recognizes the DFT as the bargaining agent for the newly created DCS.

The bill will further accelerate the spread of charters within the Detroit school system, relaxing the few restrictions that currently exist. About 41 percent of Detroit students now attend charter schools. The Michigan Association of Public School Academies, a mouthpiece for the charter school industry, hailed passage of the legislation.

Further, the bill creates “a community district accountability system” that will annually assign a letter grade to each public school based on a point scale. Those receiving an “F” grade for three years in a row would face closure. This is aimed at accelerating the spread of charter schools.

The passage of the reactionary school restructuring package comes in the wake of the determined struggle by Detroit teachers to defend public education. Last month teachers carried out a two-day sickout after Rhodes threatened to withhold teacher pay after June 30, the day he claimed the district would run out of funds.

The Detroit Federation of Teachers did everything it could to divert and sabotage this struggle. The DFT shut down the teacher sickouts and attempted to channel the anger of teachers over intolerable conditions in the schools, including unsafe and dilapidated buildings and lack of supplies, behind pleas to the state legislature, Snyder and Rhodes.

Instead of opposing the whole framework of the assault on public education being carried out in the state, the DFT backed the version of the Detroit schools restructuring plan favored by Rhodes, Snyder and Senate Democrats. Like the House version, the Senate plan would have facilitated the spread of charter schools and paved the way for further school closures and attacks on teachers.

The attack on public education in Detroit has national implications. After decades of cuts under Republican and Democratic administrations, what was once one of the premier public school districts in the country has been reduced to ruins. Under terms of the new legislation, the DPS will be turned into nothing more than a debt collection agency for Wall Street. As for what remains of the public schools, they are to be transformed into charters for the enrichment of private interests.

Both major political parties, as well as the unions, bear responsibility for this situation. They insist that the debt to the banks is sacrosanct and that working people, students and teachers must be made to pay.

Despite its initial phony show of outrage over the passage of the restructuring plan, the DFT is indicating its willingness to fall into line behind the attacks on teachers now that its position as bargaining agent in the new district has been secured. Terrence Martin, the executive vice president of the DFT, told the Christian Science Monitor, “We’re disappointed in many aspects, but we remain steadfast and we are treading forward. The good thing is that we have a school district, and that we have school board.” He continued, “We are hopeful we can negotiate a contract with the new school board.”