Detroit Public Schools need payday loans
"I'm Robert Bobb, NOT Bob Bobb!"
Payday loans of a sort from the State of Michigan have been infused into the sagging Detroit Public Schools district.
Chastity Pratt Dawsey of the Detroit Free Press reports that Detroit Public Schools is going to have trouble making payroll. A lot of trouble. In fact, on March 17, they’ll be $21.6 million short of making payroll. On April 14, it will be $16.1 million; $17.4 million on May 12; and $21.3 on June 9. Not only that, but the school district has at least $42 million in overdue bills and $9.2 million in retirement payments to distribute. Be thankful if you aren’t one of the 13,633 employees of Detroit Public Schools.
Also, be thankful you aren’t Robert C. Bobb, who is slated to take control of Detroit Public Schools’ budget on March 2.
Options?
Dawsey touches upon a number of suggestions for how the district could approach this tremendous emergency cash situation:
- Borrow from a bank against future state aid payments
- Arrange to participate in a state borrowing pool
- Ask the state for an advance on state aid
- Work out a new payment schedule with unions
Unfortunately, none of these ideas are considered to be feasible solutions.
They’re bleeding cash… just like banks!
David Martell, Executive Director of Michigan School Business Officials, said that, “Most districts that are going to have a cash-flow problem…. borrow to make payroll. Who would want to loan them the money? That might be an issue.”
According to Dawsey, the past 10 years have been tough for the district. Enrollment has decreased by 45 percent, which has led directly to a $3.7-million deficit in 2007 and a $139-million deficit for 2008. They do not expect 2009 to buck this trend.
In the meantime, district employees are gritting their teeth. “People are not going to work for free,” said Detroit Federation of Teachers President Keith Johnson. If the state floats them what amounts to payday loans, when will the district be able to pay them back? Installment plans must be in their future…
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stop paying expensive lease payments to Faberman;move into one of the closed schools;reconsider making more people 10 month instead of 12 months
There are two things in Detroit that are hurting worse than the Lions – the Big 3 and the schools. That school district has been plagued with problems for years, and I think this is probably the thing that is going to be the catalyst for the change it desperately needs. I don’t know just what they’re going to be able to do – Detroit Public Schools haven’t been able to get new textbooks for almost 20 years.