Dire Predictions for School District Deficits Doesn't Materialize

When Michigan Public Schools Superintendent Mike Flanagan told legislators in June that there were a record 55 school districts in deficit, it set off a flurry of dire predictions of the future of public school finances.

"Currently, 55 school districts are in deficit. I think it would be over 100 before long," Flanagan was quoted as saying in story posted on the Michigan Education Association's website. 

Media pundits also chimed in.

"Fifty-five are currently facing budget deficits, and that number is certain to increase," Jack Lessenberry, a Michigan Radio political analyst wrote in June after a quarterly report was released by the Michigan Department of Education.

But last week, the Michigan Department of Education released year-end results that included an audited number of the state's districts and stated there were 50 school districts and charter public schools in deficit. That number includes two districts that are dissolved and two more that combined into one district.

That's one more school district in deficit than the 49 that were reported for the end of the fiscal 2011-12 year.

Michigan Department of Education Spokesperson Martin Ackley didn't respond to a request for comment.

Lessenberry said in an email he still expects there to be more districts in deficit in the future.

Audrey Spalding, education policy director at the Mackinac Center for Public Policy, said it would be extremely unlikely for the number of conventional districts in deficit to reach 100 as Flanagan predicted.

She said school districts are starting to act more responsibly by making cuts when students leave.

For example, the Milan and Lansing school districts both used conservative estimates for student enrollment when budgeting for 2013-14. Both districts had more students than projected and were able to have balanced budgets.

The December report stated that 12 districts in the red wiped out their deficits in 2012-13. Another 16 made progress in reducing their deficits.

There were 17 districts that saw their deficits increase in 2012-13. And 13 districts and charter schools went from a positive fund balance to deficit. The remaining four districts were either dissolved or consolidated into one district.

There are about 780 districts and charter schools in the state.