According to the Michigan Treasurer and Emergency Manager for Detroit Public Schools, the schools are set to run out of cash soon and are in need of a hefty state bailout.
Detroit Public Schools could run out of cash around six months to a year from now. In order to keep that from happening, state legislators have been asked to approve a bailout of $715 million over ten years. State Treasurer Nick Khouri says that without any financial help, Detroit Public Schools will run out of cash in just a matter of months.
Both Detroit Schools Emergency Manager Darnell Earley and Khouri said that they cannot file for bankruptcy because the majority of the debt owed is to the state.
While school enrollment declines as much as 10-20% a year, the goal for the Detroit Public Schools is to reduce the annual loss in the two upcoming years and try to get it to level off in the 40,000 student range.
Lawmakers from out of state agree that schools are important, but fear that their constituents would not like the idea of their tax money being used in a Detroit bailout.
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