LANSING, Mich. (AP) – Michigan is close to finalizing legislation requiring school districts with fund balances below 5 percent to tell the state the assumptions used when adopting their budgets.
The “early warning” bills are an effort by Gov. Rick Snyder and the Legislature to catch financial problems before schools end up under state emergency management. Under legislation up for a final vote Tuesday, the state could declare that a potential for “fiscal stress” exists and require districts to submit deficit-elimination plans in certain circumstances.
The Senate also plans to vote on related legislation that would lift caps on emergency loans.
A $50 million loan fund for cash-strapped districts is nearly empty. The fund would increase to $70 million under the legislation. A $35 million loan fund for municipalities would rise to $48 million.