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School District Debt Relief by State Will Benefit Schools, Students, Communities
December 18, 2023
LANSING – Several Michigan school districts, their students, and their communities will benefit from the state allocating funding to eliminate outstanding debt, the Michigan Department of Education said today.
With the passage of a state budget supplemental bill by the Michigan Legislature and Governor Gretchen Whitmer signing the supplemental into law today, local school districts in Pontiac, Benton Harbor, Muskegon Heights, and Ypsilanti will be able to pay off their financial debts. The bill also provided funds to pay off the legacy debt of the former Willow Run Community Schools and Inkster Schools—both of which have closed.
“With these school districts no longer having the burden of their heavy debt loads, more resources can be focused on students in classrooms,” said State Superintendent Dr. Michael Rice. “Over a period of time, debt relief can translate to improvements in staffing, curriculum, facilities, materials, and equipment. State funds to pay off district bond debt can also help lower taxes in those communities.”
Muskegon Heights School District will receive $31.3 million for various debts, including but not limited to outstanding emergency loan balance and outstanding school bond loan fund balances.
Pontiac City School District will receive $18.4 million for outstanding emergency loan balance.
Benton Harbor Area Public Schools will receive $10 million for outstanding emergency loan balance.
Ypsilanti Community Schools will receive $5.5 million for outstanding long-term limited tax debt. The former Willow Run Community Schools will receive $19.4 million for outstanding school bond loan fund balances or school loan revolving fund balance, with additional funding available to be used to either retire debt of either the former Ypsilanti School District or the former Willow Run Community Schools or for improving student achievement in the Ypsilanti Community Schools.
Inkster Schools will receive $12.1 million for outstanding school bond loan fund balances or school loan revolving fund balances.
“This is welcome, long overdue relief for these districts,” said State Board President Dr. Pamela Pugh. “The state has the responsibility to better fund its school districts—all its districts, and particularly those whose children need more from schools and often receive less.”
The state funding does come with stipulations for the affected school districts. Within 12 months of receiving its debt relief funding, the new law requires the local district to:
- Develop and implement a district-wide strategic plan for the recruitment and retention of students to increase student enrollment.
- Allow for facility condition assessments or develop and implement a capital improvement strategic plan to evaluate the building infrastructure and facility needs given the current size of the district.
- Develop and implement a strategic plan to attract and retain certified teachers.
- Offer a school board training program with a minimum of three training sessions per year. Training must focus on topics related to managing school district finances.
- In partnership with the intermediate school district in which the district is a constituent district, identify and implement specific policies to increase graduation rates and reduce the number of students who do not complete high school.
- In partnership with the intermediate school district in which the district is a constituent district, identify and implement specific policies to increase attendance rates and reduce the number of students who are identified as chronically absent.
- Districts must submit documentation not later than September 30, 2025 to certify that the district has satisfied each condition under this section.
Because the legislation did not receive immediate effect by the State Senate, the funds will not be available until February 13, 2024, when the Michigan Department of Treasury will begin the financial processing.