Traverse City Record-Eagle

Michigan

June 7, 2013

Michigan says 55 school districts have deficits

LANSING, Mich. (AP) — A record-high 55 Michigan school districts are operating with deficits, though this year's final tally of financially troubled districts could drop below last year if 10 get back into the black as expected this summer.

The state's update to lawmakers was closely watched Thursday because of a number of recent school developments across Michigan.

Buena Vista School District near Saginaw was forced to shut its doors for nearly two weeks after running out of money to pay teachers. Albion Public Schools between Jackson and Battle Creek decided to close the high school next school year. The Pontiac School District is headed toward a financial emergency that could result in the appointment of a state manager.

Three districts already are being overseen by managers.

State Superintendent Mike Flanagan told legislators on K-12 budget panels that most of the state's 549 districts plus 278 charter schools balance their budget every year. Some local school boards just do not want to make tough decisions in the face of declining enrollment, he said.

Since peaking at 1.7 million in 2002-03, K-12 enrollment has dropped every year since and has decreased 177,000 overall. In the same time, the number of deficit districts rose from 10 to 49 at the end of the 2011-12 school year.

The state should have a final count of deficit districts for this academic year by late fall. Districts with $1 million-plus deficits are projected to rise from one a decade ago to 30 at the close of this school year.

Flanagan said Michigan should consider moving to countywide school districts like in other states, under the theory that larger entities could better handle fluctuations in enrollment and funding without drastic impacts that hit districts with no ability to bounce back. But he doubted countywide districts are on the horizon.

Sen. John Pappageorge, a Troy Republican, urged Flanagan to be more proactive if he thinks changes should be made.

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