Rhodes works Detroit Public School bill for governor

- Governor Rick Snyder called and federal court judge Steven Rhodes said yes.

The judge who ushered the city of Detroit through an arduous bankruptcy proceeding is now using his experience to convince recalcitrant lawmakers that sending the Detroit Public Schools system into another bankruptcy court will only result in a higher cost to Michigan taxpayers.

The judge was working out of the governor's office on Wednesday morning sharing information with three GOP House members, Reps. Pat Somerville, Brad Jacobsen, and Ken Yonker. Afterwards he told MIRS, "I'm trying to help people understand a possible bankruptcy for Detroit Schools is not a good solution," and he makes the point there is a world of difference between this issue and the city of Detroit Chapter. Basically there were lots of creditors in the mix on the Detroit case but in the case of the schools, the state is the one left holding the secured risk bag.

So far he has met with between 20 and 25 legislators with "more to come" including a session on Wednesday afternoon with the chair of the House K-12 budget subcommittee Rep. Tim Kelly who has been a strong and vocal opponent of the governor's plan to pump $70 million a year into the DPS debt for the next ten years or so.

The judge says it boils down to paying "x" now or "2x" if the district goes belly-up.

Accompanying the judge on his mission from the governor is state treasurer Nick Khouri who explains the short term cost is $700 million now vs. $1.5 billion later on. He warns the district is on a trajectory of payless paydays by "spring or early summer" barring legislative inaction.

Asked if Michigan taxpayers are willing to spend down the deficit, Judge Rhodes contends, "I think outstate voters will understand that if they do nothing now, it will cost them more later. That's an argument that has to resonate with everyone in the state."

He reports his message is being well received. "They really do want to solve this," he reports based on his efforts to date.


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