The new emergency manager of Detroit Public Schools warned state lawmakers Wednesday that teachers in the state’s largest district shouldn’t expect to be paid beyond April 8.
Retired bankruptcy Judge Steven Rhodes, who took office last week, raised the prospect of payless paydays for DPS staff during testimony before the House Appropriations Committee.
“The April 8th date concerns me greatly because there is no Plan B,” he said. “To go dark after April 8th is not an acceptable solution.”
Rhodes continued: “We cannot print money. We looked at some options, like expenses that could be deferred but that’s not enough to buy another two weeks of pay for teachers.”
Asked if taking out a short-term loan could be an option, Rhodes said no.
“That has been suggested by some, but the problem with loans is they have to be paid back, and every dollar we use is a dollar less we have to educate our kids,” he said. “There has been more than one inquiry about borrowing money, especially with reasonable interest rates, but I’ve rejected all of this. We can’t borrow money. If we do, we’re taking money out of the classroom, which is unacceptable.
“We can pay money through April 8th, but not after that,” Rhodes said. “I cannot in good conscience ask teachers to work after April 8th without getting paid. It’s just not right.”
The House panel is considering legislation to rescue and restructure DPS, which is saddled with hundreds of millions of dollars in debt, falling enrollment and numerous dilapidated school buildings.
District and state leaders have previously warned that DPS, which has been under state control since March 2009, could run out of money next month unless lawmakers agree to a financial rescue.
In a statement, state Department of Treasury spokesman Jeremy Sampson said lawmakers need to act quickly.
“Treasurer Nick Khouri has been consistent in his message for months that DPS is short of cash and could run out very soon,” Sampson said. “We hope the legislature reaches an agreement in the near future that finds a financial solution for DPS.”
In a joint statement, the leaders of three unions for DPS employees said Rhodes’ statement shows the urgent need for a solution to the district’s financial problems.
“If Detroit Public Schools runs out of money on April 8, the stark reality is that Detroit’s students won’t have schools to attend, many students won’t receive breakfast or lunch, and educators and school staff won’t get paid,” the statement said. “These are the real consequences of Lansing inaction.”
The statement was issued by Ivy Bailey, interim president of the Detroit Federation of Teachers; Ruby Newbold, president of the Detroit Association of Educational Office Employees; and Donna Jackson, president of the Detroit Federation of Paraprofessionals.
“We now have a date and a real urgency to get serious about making sure our schools are adequately funded,” the three union presidents said in the statement.
“The House Appropriations Committee obviously needs to act, if only to carry the district through the remainder of the school year,” said Keith Johnson, a former DFT president. “If I still were the DFT president, I would say if there’s no pay, there’s no work after April 8th.
“It’s bad enough that teachers have to work for reduced wages. But do they really expect teachers to work every day for free until such time as the House Appropriations Committee decides, OK, we better free up some money? That’s like a blind promissory note,” said Johnson, who is a vice president of the American Federation of Teachers.
Steve Conn, who was ousted last August as DFT president by the local’s executive board, said teachers should respond to Rhodes’ warning about payless paydays by striking.
“A teachers’ strike now is the only way to save public education in Detroit. With a strike, Rhodes and Lansing will find the money to pay us — and quickly,” he said.
Patrina Riley, who has a 9-year-old-daughter in the fourth grade at Mackenzie Elementary-Middle School, called the prospect of teachers not being paid “a very scary situation.”
“As a parent, that sounds absolutely chaotic. It’s very disappointing for our children and something needs to be done about it right now,” Riley said. “Teachers should not be asked to work if they can’t get paid because they have responsibilities and families of their own. They’re just like us. I’m sure teachers are not expected to work for free in the suburbs.”
Christal Bonner, who teaches grades 9-12 in special education at the Cody Detroit Institute of Technology, expressed anger at the suggestion she won’t get paid next month.
“If we don’t get paid after April 8th, I will not be going to work,” she said. “I’ll be doing other things, because this is the lowest. But here’s the question ... will the emergency manager still be getting paid?”
Herman Davis, president of the Detroit Board of Education, said the state owes the district about $1.5 billion “which has been misused over the past 10 years.”
“Some of it was appropriated for bonding monies, appropriated from the state to DPS because they were responsible for the reduction in our student base,” Davis said. “And, when the (Education Achievement Authority) opened up, they took $288 million of bonding money and built and repaired 15 schools. We don’t receive any money back from the EAA.”
“The governor needs to pay back the money to DPS. We gave them our DPS audit of the money and told them we’d be out of money,” he said. “We’ve known this and they’ve known it. We asked the governor to give our money back. The state owes DPS the money, so they need to ’fess up.”
Gov. Rick Snyder has proposed a $715 million plan to pay off the district’s debt and fund creation of a new, debt-free Detroit school system.
The House and Senate are considering versions of Snyder’s plan with some significant differences.
Under the House legislation, school board members would initially be appointed and the board would not be fully elected by Detroiters for eight years. The Senate plan calls for elections in November, and Mayor Mike Duggan has called for an even faster transition.
The House measure also would curb some collective bargaining rights for teachers.