Michigan legislative action thread
Posted on 10/26/2015 12:47:36 PM PDT by MichCapCon
The debt load of the Detroit public school district increases by $1 million every school day, according to the co-chair of a coalition trying to help the financially troubled school district.
John Rakolta, the co-chair of the Coalition for the Future of Detroit Schoolchildren, offered this figure on the same day that Gov. Rick Snyder released a new proposal to fix Detroit’s school system.
“As far as the size of the total debt, it’s big, really big and very complex,” Rakolta said in an email. “It has many facets. The debt is increasing by an estimated $1 million per school day. If this isn’t fixed now, it will just grow and create a larger hole to dig out of. There is no magic here. Only heavy lifting can get this done.”
Snyder pitched a plan Monday that would require Michigan taxpayers to ante up $715 million for Detroit schools. Of this, $515 million would go to pay off the school district’s short-term debt, and another $200 million would go to create a new administrative entity to run the city’s schools.
Snyder said the state’s School Aid Fund, the primary funding source for Michigan public schools, would contribute around $70 million a year for 10 years. When the current school district’s debt is retired, the district would be closed and the new entity would assume control of schools.
Rakolta said the state was bailing out itself, not Detroit’s schools.
“This is not a Detroit bailout,” Rakolta wrote. “This is a state bailout of the state. The state managed the expenditures of the money as emergency managers of the district. The state issued the state aid notes and bonds to cover the debt using the full faith and credit of the state. The state decided not to pay MPSERS (state pension system for school employees). The state decided not to pay the vendors. The state continues to manage the district.”
The governor’s proposal requires approval by the state Legislature.
State Sen. Rick Jones, R-Grand Ledge, said it would be tough to get support for a bailout of Detroit Public Schools.
“It’s going to be tough unless we can be shown exactly what it is going to cost if we don’t do it and if it is going to get worse,” Jones said. “Are we on the hook for bailing out a school district that has had bad supervision for decades? We are bailing out a system that is failed. We are going to use money that could go to all the other districts. I’m very disappointed that it would be suggested that Detroit get bailed out at the cost of all the other districts.”
Jones said he held the local school district responsible for its bad financial condition, not the state.
“The superintendent and school board have gotten themselves into this and the state has tried to help,” Jones said.
In regular reports to the state, DPS shows a $238.2 million deficit in its operations budget. (Covering this particular gap between revenues and expenses is how the district is adding the $1 million per day in new debt.) In addition, the Michigan Department of Treasury reports that the district owes $572 million to a state loan authority for money borrowed to cover previous year's overspending.
Both those figures refer to money borrowed to cover routine operating expenses, such as salaries and heating bills — expenses that are supposed to be covered by regular operating revenue the district receives from local, state and federal taxpayers.
But the red ink does not stop there. DPS also owes around $2 billion to bondholders for long-term debt incurred to pay for long-lived assets such as land, buildings and major school infrastructure improvement projects.
Boy, imagine if that was how much the federal debt increased everyday. we’d be rich.
Pensions.
The older I get the greater the contempt and disgust I hold towards anyone who thinks it’s my responsibility to educate their kids.
These kids are under a curse.!
Let the chips fall as they may..!!
..but just think.....how wonderful the Dee-troit edumucation is!
Detroit is just another ‘Rat Utopia issuing “Free” Education.
From glorified day care centers to jails. How much is that going to cost us??!!
Democrats run their socialist hell hole into the ground and then expect a bailout from others who made hard decisions years ago.
The answer should be no. Declare bankruptcy AGAIN. Cut the city pensions. Live within your means. Teach the union goons a hard lesson.
The black underclass elected a series of ultra corrupt public officials starting with Coleman Young who utterly mismanaged the court. Now white taxpayers are supposed to make up pensions for them.
Screw them. Millions of Detroit whites had their family business and home values destroyed by these same forces. No ec compensated us.
The educators of Detroit raised up a generation that does not produce enough tax revenue to support their bloated pensions.
Let them fail. No one saved airline pilots, who lost there pensions due to carrier bankruptcy.
Let the bond holders eat their own losses too. If not for risky lending this would have been fixed a long time ago.
F ‘em all. Let the chips fall where they may!
Plenty!!
I’m just glad the conversation is moving to the forefront of people with a brain (that they use!).
Doesn’t more borrowing lead to financial success? Obama said it does. In fact next week he will say that if we don’t continue to Borrow the World will End as we know it, Congress agrees with him also.
Don’t pee on my leg and tell me it is raining. A gas tax increase for roads repair? No freakin’ way, it will go to fixing Detwaa’s schools or pay for Jennifer Rick Snyder’s Obama-Medicaid Expansion. Don’t B.S. me, I may have fallin’ off the turnip truck but it wasn’t yesterday...
238 million + 572 million + 2 billion for bonds for the legacy land and buildings and the 1.2 billion in Pension liabilities ( Source the Detroit News ) and I come up with a total of 4.01 Billion in total.
Tell me if I am double counting here, or is the full story not being told.
Tell me how do they legitimately try to negotiate this 4 billion nut down other than bankruptcy?
Thanks for the ping; post. Only a million a day? Consider how much the federal thieves have gotten in about 39 hours…
End of Oct 26, 2015 $18,421,447,648,201+
9:18a Oct 25, 2015 $18,418,442,257,846+
WOW! They’ve ripped us off for another 3 BILLION in just over 39 hours and NOBODY IN CONgre$$ is in prison yet?
6. But the grand nostrum will be a public debt...
7. It must not be forgotten that the members of the legislative body are to have a deep stake in the game. This is an essential point, and happily is attended with no difficulty. A sufficient number, properly disposed, can alternately legislate and speculate, and speculate and legislate, and buy and sell, and sell and buy, until a due portion of the property of their constituents has passed into their hands…
8. (4) A great debt will require great taxes; great taxes, many taxgatherers and other officers; and all officers are auxiliaries of power.
11. As soon as sufficient progress in the intended change shall have been made, and the public mind duly prepared according to the rules already laid down, it will be proper to venture on another and a bolder step toward a removal of the constitutional landmarks.
http://www.constitution.org/cmt/freneau/republic2monarchy.htm
Teach your children well.
Prepare accordingly.
live - free - republic
Let’s sell pot legally instead. The states doing it are raking in the bucks.
Democrats have destroyed more cities than Godzilla
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