Payless Paydays Ahead For Detroit Teachers? District Set To Run Out Of Cash By April 8
DETROIT (WWJ) - The clock is ticking for Detroit Public Schools toward payless paydays.
Transition manager Steven Rhodes on Wednesday appeared before a state house committee considering DPS reform legislation. He said the district will run out of money in early April.
"The last pay period that we will be able to fund the payment of our staff for is the pay period that ends on April 8th, so this is an urgent matter for us," he said. "We need your help in order to keep the schools open past April 8."
Rhodes, the judge who guided Detroit through the largest municipal bankruptcy filing in U.S. history, reiterated to lawmakers that he doesn't think bankruptcy is a viable option for DPS because much of the district's debt is secured or guaranteed.
"The total debt is a little over $500 million and about 90 percent of that debt, all but about $50 million of it, is not the kind of debt that a bankruptcy case can deal with very well," he said. "If there's a third-party that's guaranteed a debt, it's very hard for the bankruptcy to discharge that guarantee. So, what we're left with in a bankruptcy is, realistically, is the option to deal with $50 million of vendor debt and it's just not worth it. It's not a viable option."
It's unclear when lawmakers will vote on the reform legislation. Among the bills that could be taken up by members of the Government Operations Committee is one that would take $715 million in taxpayer money over the next 10 years to pay off DPS debt.
