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Michigan State Treasurer Says Detroit Public Schools Are Worth Saving

Nick Khouri
State of Michigan

Michigan’s top treasury official is warning lawmakers to not let the state’s largest school district go bankrupt. 

A state House panel on Wednesday held its first hearing on legislation to keep Detroit Public Schools from going broke in April.

State Treasurer NickKhouri told lawmakers bankruptcy would likely cost taxpayers more than twice as much as a state bailout.  “The total cost to the state and others is about $700 million with this package.  It’s probably about $1.8 billion or so if the district actually files and we work through bankruptcy,” said Khouri.  “Certainly, both for control reasons, for uncertainty reasons during the process, and just pure numbers reasons, I just don’t see how bankruptcy makes any sense for DPS.”

State House Speaker Kevin Cotter (R-Mt. Pleasant) says bankruptcy should stay on the table as a way to resolve the district’s financial crisis.

A string of state-appointed emergency managers have controlled DPS since 2009.  Deficits have continued to increase and debt has ballooned during that time.

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— Jake Neher is the State Capitol Reporter for the Michigan Public Radio network.  Contact WEMU News at734.487.3363 or email us at studio@wemu.org

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