Between fiscal year 2012 (FY2012) and FY2013, 85 percent of all traditional public school districts in Michigan saw their fiscal health improve or remain steady according to a new report from the Citizens Research Council of Michigan (CRC), School District Fiscal Health Improves, But Some Long-Term Challenges Remain. This is a marked improvement from FY2012, when over 70 percent of traditional districts experienced increased fiscal stress and a decline in their health. The report also notes that the number of severely stressed districts (deficit districts) has hovered around 50 over the past three years, contrary to earlier warnings from state officials that the number of deficit districts could grow to 100.

CRC’s new report finds that, overall, the fiscal health of Michigan school districts is a mixed bag and that the good news is tempered by some bad news, especially as it relates to the most fiscally-challenged districts in the state. This was confirmed recently by State Superintendent of Public Instruction Mike Flanagan’s quarterly update to lawmakers. While the vast majority of deficit districts are expected to reduce or eliminate their problems by the end of the year, nine districts are projected to see their deficits increase.

“The recent increases in per-pupil funding provided by the state combined with the prospect for additional per-pupil bumps the next two years, conditions are ripe for continued improvement,” said Senior Research Associate Craig Thiel. “The prospect of better financial health, however, will be tempered for many districts by the headwinds created by pension obligations and declining student enrollments.”

In addition to examining recent trends in state funding, student enrollment changes, and retirement system reforms, the CRC report analyzes school financial data compiled and reported by Munetrix, a private firm specializing in public sector financial management reporting. The report reveals that, over the past five-year period, about one-half of all traditional public school districts saw their fiscal health erode while the other health saw their health improve or remain constant.

The report is available at no cost HERE.

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