Ken Cockrel and Joe Harris robbed school children.

**kraig** · June-19-09, 07:52 AM

June 19, 2009

Detroit diverts DPS cash for bills

City collects taxes for schools but delays payments illegally

BY ZACHARY GORCHOW and CHASTITY PRATT DAWSEY
FREE PRESS STAFF WRITERS Detroit's financial condition has grown so dire that for several months it has used tax revenues intended for the even more cash-strapped Detroit Public Schools to make the city's payroll and meet other financial obligations.
Once the city receives an influx of revenue, such as revenue sharing from the state, it reimburses DPS. But that violates state law because DPS is not paid on time.
DPS did not receive payments in November, April and May. It asked the state for advances of more than $300 million over the past fiscal year to help it meet its obligations.
Eric Scorsone, director of Michigan State University's state and local government program, said the severity of the city's cash situation means the city could be at risk of a state takeover.
"You have to believe it's within months of payless paydays, of furloughs," he said.
Detroit officials notified the Michigan Department of Treasury last week of the situation.
"In the three weeks I have been CFO, I recognized this error and am identifying a process to increase efficiency and ensure the City of Detroit meets its financial responsibilities," Norman White, the city's chief financial officer, said in a statement to the Free Press.

The city has a deficit of $280 million. DPS has a $430-million deficit of its own. â€¢ RELATED ARTICLE: DPS deficit hits $430 million â€¢ RELATED ARTICLE: Late repay signals city in crisis

For all of you that's been praising Ken Cockrel and Joe Harris as such stand up guys, this happened while they were in charge. In fact, the Friday before the election payroll checks were bouncing in the morning. It was blamed on a computer glitch. Chances are they diverted money that was supposed to go DPS. Taking money from school kids, they're bigger pieces of shit than the school board members.

**Lonyo exit** · June-19-09, 08:06 AM

Nice hyperbole, but one could also argue that they stole from unqualified employees padding the DPS payroll, the useless junket fund, the phantom vendor fund and the top-heavy bureaucracy salaries.

If someone wanted to ripoff Detroit students they'd have to get a job in Eastpointe or Lake Shore public schools, as that's where all the students and their parents have been fleeing to en masse.

**kraig** · June-19-09, 08:17 AM

Originally Posted by Lonyo exit

Nice hyperbole, but one could also argue that they stole from unqualified employees padding the DPS payroll, the useless junket fund, the phantom vendor fund and the top-heavy bureaucracy salaries.

If someone wanted to ripoff Detroit students they'd have to get a job in Eastpointe or Lake Shore public schools, as that's where all the students and their parents have been fleeing to en masse.

So, it's okay to steal from someone if you don't agree with how they will spend the money? Also, can't an argument be made that they kept the money from the schools and did the same thing, that you contend, DPS would have done with the money, only they did it for the City of Detroit?

**Lonyo exit** · June-19-09, 10:06 AM

A.) I was partly joking.

B.) The joke was in reference to the hand-wringing pathos of your thread title.

**kraig** · June-19-09, 10:18 AM

Originally Posted by Lonyo exit

A.) I was partly joking.

B.) The joke was in reference to the hand-wringing pathos of your thread title.

Have to go for the attention grabber. LOL

**Novine** · June-19-09, 10:25 AM

Whatever the City of Detroit is doing, it's not the cause of DPS's deficit. 85% of DPS's funding comes from Lansing. When Detroit collects the 6 mills on homestead and non-homestead property taxes, that goes to Lansing, not to the school district. The only property taxes the City remits to the schools is the debt millage and the non-homestead property taxes. The district's most recent budget said that the general fund took in less than $100 million in local property taxes. The City should be making those payments on time. But the delays in the payments aren't the cause of DPS's problems.

**kraig** · June-19-09, 10:36 AM

Originally Posted by Novine

Whatever the City of Detroit is doing, it's not the cause of DPS's deficit. 85% of DPS's funding comes from Lansing. When Detroit collects the 6 mills on homestead and non-homestead property taxes, that goes to Lansing, not to the school district. The only property taxes the City remits to the schools is the debt millage and the non-homestead property taxes. The district's most recent budget said that the general fund took in less than $100 million in local property taxes. The City should be making those payments on time. But the delays in the payments aren't the cause of DPS's problems.

They aren't the sole cause of the problem, but they contribute to the problem. The real point that should be noted, is that the City of Detroit does not have the right to withhold the money from DPS and use it for its own purposes. Let the person in payroll take your paycheck to pay their bills. I bet your financial situation or money management skills wouldn't play into your desire to knock the hell out of them.

**Hypestyles** · June-19-09, 10:46 AM

Terrible. If Dave Bing’s people don’t get this in order right away, the Governor should appoint an emergency financial manager for the city... even the obstructionist types on city council couldn't stall..

**daddeeo** · June-19-09, 10:53 AM

Well, the whole thing is no laughing matter.
Let's face it, the school system and city are both broke. It's just a matter of time before they both go down the shitter.

**leland_palmer** · June-20-09, 02:40 AM

and Library...

ZACHARY GORCHOW and CHASTITY PRATT DAWSEY
FREE PRESS

http://freep.com/article/20090620/NE...ing+city+bills

The City of Detroit has been spending property tax money intended for Detroit Public Library employees' benefits on city operations instead, a library official said Friday.

The library is a separate municipal corporation from the city with a dedicated millage that provides most of its $48-million annual budget.On Friday, Library Commissioner Jonathan Kinloch said library staff learned this week that the city spent $6.2 million in property tax money that was supposed to go to the library, dating back to July 1.

The money was to cover employee benefits and contributions to the library workers' pension fund.

The city still owes the library the money.

Stosh · June-20-09, 07:46 AM

Originally Posted by leland_palmer

and Library...

ZACHARY GORCHOW and CHASTITY PRATT DAWSEY
FREE PRESS

http://freep.com/article/20090620/NE...ing+city+bills

Christ. That's probably the last straw in this whole debacle. I'd guess that there's a financial manager [[or twenty) in Detroit's immediate future. Bing probably didn't have a clue as to how jacked up things really were. I would not blame him for withdrawing his name from contention for Mayor this fall.

I think the first order of businesss is to get the library back their money. I wonder which pocket they will pick to do that?

**Novine** · June-20-09, 09:45 AM

This is what happened in Pontiac before the state came in. The city kept "borrowing" from each account until there were no more accounts to drain. No one should be surprised that this is happening. When you're running hundreds of millions in deficit spending, it means there's not enough money coming in to pay the bills. But the bills still have to be paid. Just like someone who's being chased by the debt collectors, eventually it catches up with you. Next step, bankruptcy.