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Snyder Signs Law Meant To Prevent More Cash-Strapped Schools From Closing

Education Funding

Gov. Rick Snyder has signed bills into law meant to prevent financial emergencies in schools.

The state and intermediate schools districts (ISDs) now have more power to step in sooner when schools show signs of financial trouble.

“You can nip it in the bud, if you will. And you can address financial problems before they become a full-blown crisis,” said Terry Stanton, a spokesperson for the Michigan Department of Treasury.

The state dissolved the Buena Vista and Inkster school districts in 2013.

One of the new laws makes it easier for the state to appoint an emergency manager in some cases.

“Definitely that’s a concern that would take away local control,” said Chris Wigent, who directs the Michigan Association of School Administrators (MASA).

But Wigent praised lawmakers for approving the measure allowing ISDs to intervene before the state does. MASA endorsed the bills after that measure was added to the package. Wigent says he believes ISD involvement can help prevent further state takeovers of schools.

Democrats and some school groups are still concerned about additional reporting requirements imposed under the new laws. They say the requirements are onerous and will increase administrative costs for school districts. And they say it’s unacceptable for the state to circumvent its own emergency manager law.

Snyder also signed related legislation into law making more money in emergency loans available for cash-strapped school districts. The state fund that provides those loans has nearly dried up and school groups say some districts will likely need loans this year.

That new law specifically bars Detroit Public Schools from receiving the loans. Detroit lawmakers have criticized that provision, saying a state fund to help public schools’ finances should be available to all public schools in the state. Lawmakers and Gov. Snyder are negotiating a package to specifically help turn around DPS and its finances.