LANSING, MI (AP) – Michigan lawmakers are 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 Republican-led Legislature to catch financial problems before schools end up under state emergency management. The state could declare that a potential for “fiscal stress” exists and require that districts submit deficit-elimination plans under certain circumstances.
The bills were approved Thursday by the House and Senate with Democrats in opposition.
The legislation is tied to still-pending bills to 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 legislation the Senate could vote on in two weeks.