As some Michigan schools remain closed, many more face budget woes

Updated
U.S. Education Secretary Arne Duncan and Michigan Gov. Rick Snyder read "The Rainbow Fish" book to a pre-kindergarten class at Thirkell Elementary School in...
U.S. Education Secretary Arne Duncan and Michigan Gov. Rick Snyder read "The Rainbow Fish" book to a pre-kindergarten class at Thirkell Elementary School in...
AP Photo/Detroit News, David Coates

One week into the Buena Vista School District’s’ budget crisis, school remains out of session for Saginaw, Michigan’s 435 public school students. In fact, the district’s schools are closed for at least the remainder of this year, district officials announced on Monday. Students who want to complete their coursework will have the option of attending a voluntary “skills enhancement camp” over the summer instead.

In the meantime, Michigan schools superintendent Mike Flanagan said that he will work with the district to come up with a satisfactory deficit reduction plan so that its schools can reopen in the fall. Whether all of Buena Vista’s schools will return in their present form remains unclear, but one thing is certain: their troubles are not unique.

Over the weekend, Flanagan announced that the Pontiac School District had narrowly avoided missing its next payroll, thanks to the release of state funds to the district. Republican Governor Rick Snyder’s administration has withheld three months’ worth of financial aid for Buena Vista because that district has not submitted a legally required deficit reduction plan to the state.

While not every one of the state’s local school districts is in immediate danger of missing payroll, many of them are running deficits. In February 2013, the state Department of Education reported that as many as 49 school districts were running budget deficits, while an additional three districts were projected to soon join them.

“The magnitude of some of these deficits seems almost insurmountable,” wrote Deputy Superintendent Carol Wolenberg in the department’s report [PDF].

Cash-strapped school districts face limited options. Pontiac’s school district was only able to delay a Buena Vista-style shutdown in part because its umbrella school district—Oakland Intermediate Schools, which oversees local school districts in Oakland County—provided cash advances. Though the district remains operational for now, it is unclear whether it will be able to hit its deficit reduction targets and remain open for the foreseeable future.

Buena Vista school district has had no such luck. Last week, Superintendent Deborah Harvil told msnbc.com that the district would “probably request an Emergency Manager,” or a financial review process which could end in Emergency Management. Under Michigan state law, the state government has the power to declare financial emergencies in debt-ridden school districts and municipalities, empowering an Emergency Manager (EM) to take control from local officials.

To avoid Emergency Management—which has often ended in privatization of public goods, mass layoffs, and significant wage cuts for public employees—some Michigan residents are calling on Governor Snyder to release emergency funds from the state’s $500 million rainy day stash. Snyder has dismissed these calls. Though Buena Vista’s deficit is only $1 million, the governor ruled out alleviating it with rainy day funds on Thursday.

“That’s not what the rainy day fund’s really intended for,” he said. “I think people are trying to look through good, constructive solutions that wouldn’t require that.”

“If this isn’t a financial emergency, then what is?” Progress Michigan’s Josh Pugh said to msnbc.com.

On the question of whether an Emergency Manager might be necessary, Snyder was less direct.

“I wouldn’t come to that conclusion right away, because in fact there’s a whole process to make that determination,” he said.

As some Michigan schools remain closed, many more face budget woes

Updated