State Aid Is Delayed, Causing Cash Crisis In Detroit Schools
Detroit--Representatives of various school unions here are counseling teachers and other employees to be patient with district officials in the wake of the announcement that April's two paychecks may be delayed because of a serious cash crisis.
"Most teachers can make it past two paydays," said John Elliott, president of the Detroit Federation of Teachers. "They may have to line up at the credit union to get their savings out. But it would be foolish for any employee not to report to work."
District officials here and throughout Michigan are straining to fulfill their financial obligations because of the state board of education's decision to stall April state-aid payments to school districts.
As a result, employees of the nation's sixth-largest school district face the prospect of payless paydays in April.
Possibility of No Paychecks
Detroit school officials announced on March 29 that the district does not have enough money to meet its $20-million biweekly payrolls on April 6 and April 20. An estimated 20,000 workers, including 9,500 teachers, could go without paychecks.
A potential state deficit of more than $500 million this year prompted state officials to delay April 1 school payments until the end of the month.
For the 207,000-student Detroit district, that delay means coping for a month without $50 million in promised aid.
"We won't be able to meet payrolls, and we have already notified the unions that their checks will probably be late," said Melvin Chapman, deputy superintendent of schools in Detroit. "At this point there is no prospect of our being saved from this particular crisis by a bank loan. We can't just walk into a bank and come out with $20 million by April 6."
Detroit officials have asked the state to make an exception for the financially beleaguered district by releasing some money earlier than the scheduled date. So far, Michigan treasury and education officials have refused to make the shift.
"If we make an exception for Detroit, we have to make an exception for all other districts that could be short of cash," said Thomas Farrell, spokesman for the state department of education.
Michigan school-finance specialists say that in addition to Detroit, 22 of the state's 570 districts might have money problems in April because of delayed aid payments. None of these other troubled districts, which all have enrollments under 10,000, has indicated that it will be unable to meet payroll demands.
Vol. 01, Issue 28