Posted on 10/27/2015 8:16:04 AM PDT by MichCapCon
Detroit Public Schools recently borrowed $78.5 million from a "Michigan Finance Authority," and the same day made payment on another loan of $107.8 million taken out last May. Yet Department of Treasury spokesman Terry Stanton said the state was not lending money to the Detroit school district.
“To be clear, the State is not loaning the district money. The Michigan Finance Authority (MFA) facilitates these transactions on behalf of the district,” Stanton stated.
ForTheRecord says: That’s the official line. Here’s the reality:
The Michigan Finance Authority is an administrative entity created by past legislatures to oversee various government lending programs. Its board consists of political appointees chosen by the governor and its chairman is the state Treasurer. Its executive director is Mary G. Martin, who has worked for the state since 1994. The Treasury department is required to provide a comprehensive list of resources to the authority.
The authority has incurred about $11 billion in debt, which it turns around and lends to other entities or individuals as authorized by various state laws. It collects around $1.2 billion in annual payments from those borrowers.
If the cities, schools, college students and others it lends to do not repay their loans, neither the MFA board members, director, spokeperson nor the state Treasurer will be on the hook for the money the “authority” borrowed to make those loans.
Three guesses as to who is ultimately obligated to repay the $11 billion in debt it has accumulated, and who covers the tab if any of its own debtors don't pay their loans off.
Decide for yourself whether that makes the MFA “the State of Michigan,” but there’s no question that the liabilities it incurs are burdens carried by the people of Michigan.
Where is the Governerd?
The Warden won’t allow him any calls.
We have one in our State too. It works if everyone pays their bills.. but alas.. they never do.
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