What's amazing here is not what they tell you, but what they don't...
Well, the children in Detroit are at it again.
And is there any wonder why there is so much blow-back from Gov. Snyder’s latest excuse to waste Michigan Taxpayer money on Detroit?
{Continued below the fold}
(6)Nuh Uh.
(0)The posts are as usual high quality, but currently a little more sparse because of some ongoing election efforts.
10x25MM has done a fine job pointing out the DPS foibles, and this morning reminds me that bankruptcy really was the legitimate option for the failed district. It appears that even after 617 Million has been approved, no one knows who is in charge yet. From the Detroit News:
Davis, who has been board president for two years, on Sunday said Lemmons was making his move.
“LaMar Lemmons is trying to hijack the ship, but he is not currently the president, even though he would like to be.”
Both insist they are following the June 9 board meeting results even though the stint is short..
Boys. boys… Just remember, the Captain goes down with the ship.
In any event, I mentioned election efforts, right? Below is a radio ad I have prepared to run this coming week, and then again closer to the election. I thought it might be of interest, and that THIS TOO might be of interest. Higher taxes.. Right?
(8)Nuh Uh.(0)Part II - The Eventual Cost of DPS Liabilities to Michigan Taxpayers and Detroit Schoolchildren
DPS has two types of formal debt: operating and capital. Operating debt is a conversion of present and past annual operating deficits into ‘long-term notes’ sold to the financial markets, as well as more immediate debts owed to the State of Michigan directly. DPS capital debt exists only in the form of bonds which were sold to financial markets to purchase and rehabilitate facilities. DPS’ formal bonds are identified by Series, which consists of the year issued and a letter suffix when different purpose bonds are issued in a single year. The financial markets apply a further identifier, CUSIP, which is a unique identifier of municipal bonds by series and their intended dates of redemption. All of the DPS debt sold to the financial markets has been enrolled in Public Act 92 of 2005, a program designed to reduce interest rates to local school districts in accordance with the 1963 Michigan Constitution’s Article IX, Section 16. Most DPS debt is effectively secured by a general obligation to pay, which requires Detroit taxpayers to increase taxes and reduce spending should financial difficulties repaying arise.
DPS pays off its capital debt in annual installments of both interest and principal, before it pays off (or adds to) its operating debt. Bond interest and principal payments are required by bond terms which – if ignored – would result in immediate default and bankruptcy. The exact contract terms of DPS debt sold to the financial markets are laid out in official statements which detail all the formal legal and financial features of the bonds. The official statement is essentially a contract between DPS and its bond purchasers.
DPS’ operating debt payments are somewhat more flexible than capital debt payments because only a portion of operating debt has been converted into formal bonds covered by statements; much of it is separately owed to the Michigan School Loan Revolving Fund. The SSLRF can best be thought of as a State sponsored credit card. School districts tap into it when they are short of cash, and pay off their balance when they are flush. Operating debt is only converted into formal bonds when Michigan school districts exceed their limits at the SSLRF. Those limits are not exact, and generally come into play when DPS goes through one of its periodic financial spasms.
(8)Nuh Uh.(0)Part I - No, The Richmond USD Case Did Not Challenge U.S. Bankruptcy Court Authority
Governor Snyder browbeat the Michigan Legislature to approve the $ 617 million bailout of Detroit Public Schools which he signed today by regaling them with a parade of horribles which would occur if the bailout was defeated and DPS was forced to file for bankruptcy. Daniel Howes regurgitated Governor Snyder’s compelling tales of impending doom delivered behind closed doors in a Detroit News article, but was any of it true?
Right at the top of Governor Snyder’s parade of horribles was the Federal bankruptcy filing of the Richmond [California] Unified School District on April 19, 1991 . Governor Snyder portrayed the outcome of this action as the U.S. Bankruptcy Court denying the petition and ordering the State of California to financially bail out the district. From Daniel Howes’ article:
There is scant precedence for school districts filing for bankruptcy, the Snyder administration found. In 1990, according to an administration letter to state Rep. Laura Cox, R-Livonia, the Richmond Unified School District in Northern California filed for bankruptcy because of $42.5 million in debt. The judge ruled the district could not be protected by the court in bankruptcy and ordered the state to provide the district with operating funds.
Nothing could be farther from the truth.
(8)Nuh Uh.(0)Gov. Snyder, Sen. Meekhof and Sperker Cotter demonstrating their best use for Michigan Taxpayer dollars.
With that conveniently (and consistently) “overlooked” $3.5-billion in debt, the Mi(a)GOP just handed the Michigan House to the democrats in the fall.
Here’s a not-so-subtle hint.
More to follow…
(5)Nuh Uh.(2)RTA Funding Could Buy All Their New Riders New Cars, And Pay For Their Fuel and Insurance To Boot!
The new Regional Transit Authority of Southeast Michigan is out today with their transportation master plan to soak taxpayers in Macomb, Oakland, Washtenaw, and Wayne Counties for another $ 3.3 billion in property taxes over a 20 year period.
RTA CEO Michael Ford released the regional mass transit plan RTA will submit to voters on November 8th under PA 387 of 2012. A 1.2 mill property tax increase and $ 1.7 billion in new Federal & State subsidies will provide four new bus rapid transit lines, 11 cross county connector lines, one regional rail line, and some extended/intensified local service.
Let’s have some fun by subjecting the new RTA regional mass transit plan to some real, pre Common Core, mathematics.
(16)Nuh Uh.(0)Lawmakers will come up with enough dough to settle this temporary matter.
Somewhere.
There is a $460 Million unexpected shortfall in the Michigan Budget. The Free Press reports:
The budget gap is the combined result of a revenue shortfall of about $330 million for the 2016 and 2017 fiscal years, plus higher Medicaid caseloads that are expected to cost the state about $130 million more than estimated, Budget Director John Roberts told journalists after the conference at the Capitol.
The added strain comes as the Legislature is already grappling with tens of millions of dollars in extra spending requests related to the Flint drinking water crisis and a major financial rescue that’s proposed for the Detroit Public Schools.
Oh yeah..
Gee, we never saw that coming.
(12)Nuh Uh.(0)Take a good look at the picture below.
He’s going to factor heavily in this post (and more importantly, what YOU can do to protect your pocketbook).
{Continued below the fold}
(16)Nuh Uh.(0)Are Bailouts The Right Answer for DPS?
(Reposted from JasonGillman.Com)
The Michigan House just voted to give the Detroit Public Schools a $500 million bailout and the State Senate wants to give $800 million.
104th State Representative and incumbent Larry Inman explains it away as a necessary evil. He suggested on the Ron Jolly radio program Wednesday morning, that lawyers warned house leadership that if they didn’t do something, the courts would take over, and it could be far worse. He referenced the Michigan constitution, and its requirement on the legislature to provide funding for the schools.
My guess is that he did not ask the question of the attorneys advising the house “what might happen if every school district subjected the taxpayers to the same challenge?”
YES, the state is supposed to provide an education. The legislature is supposed to “maintain and support a system of elementary and secondary schools.. ” In fact, From the state constitution:
(15)Nuh Uh.(0)Hold onto your wallets because the fun is set to begin again tomorrow.
Last week the Michigan House, in response to the temper tantrum thrown by the Detroit Federation of Teachers (which to be fair, was in response to the gross ineptitude of one Judge Steven Rhodes), passed yet another in a long line of “life preservers” to the failed Detroit Public School district.
Despite having been “locked out” by administration (seriously, that is what the DFT was using as a speaking point on every local talking head show last weekend), things went back to normal by Wednesday.
I’m still trying to wrap my head around the concept of how calling in sick en masse is somehow the equivalent of being “locked out” from your place of employment…but I digress.
Unlike the bailout proposed by the Michigan Senate, the House package is about $200-million lighter than the Senate’s, and is choked so full of poison-pill provisions that it is guaranteed to cause even more problems.
“Not to worry! With a little elbow grease and some friendly verbal persuasion, we’ll have you upright and humming along the road in no time,” our relentlessly positive Gov Snyder allegedly remarked about the latest DPS bailout.
{More below the fold}
(10)Nuh Uh.(0)
