DPS predicts payroll shortage

DETROIT - Detroit Public Schools won't be able to make payroll as of March 17 unless it arranges a loan or works out a new payment plan with employees, according to the Detroit Free Press.

According to financial reports filed with the state, the district expects to be short by $21.6 million in March and millions more in May and June, the Free Press reported. The reports also show an additional $42 million in overdue bills as of Jan. 29, including $9.2 million that the district has not paid to the Michigan Public School Employees Retirement System, according to the article.

To cover the bills, the district could take out a loan from a bank or from a state borrowing pool, request expedited state aid payments or work with unions on a new pay schedule, according to the Free Press.

Mattie Majors, spokeswoman for the district, told the Free Press that officials are not sure how the problem will be resolved. Emergency financial manager Robert Bobb is expected to begin his oversight role in the district on March 2, the Free Press reported.

In August, unions in the district agreed to be paid one day later than scheduled to allow DPS to avoid taking out a loan to cover payroll, according to the Free Press. That reportedly saved DPS $1 million.

"People are not going to work for free," said Keith Johnson, president of the Detroit Federation of Teachers.

The Detroit Free Press, "DPS may need payday loans," Feb. 10, 2009

Michigan Education Report, "First class or 21st century? Don't pass up chance to reform Detroit Public Schools," July 14, 2008