State officials are crediting a new "early warning" law for reducing the number of school districts in fiscal crisis.
In 2015, 41 districts had budget deficits; this year, only 27 have deficits.
State Treasurer Nick Khouri says the state can now intervene before a district is in a serious financial situation.
"The easiest thing to do is to deny a problem for years and years until it's too late to solve," says Khouri, "so part of this process is to make sure that these issues are brought up early."
Khouri says the state encourages districts to be realistic about their future revenue sources, and to not rely on overly-optimistic expectations of enrollment surges.
"The old cliche is true," says Khouri. "Hope is not a plan, and you need a realistic plan to balance the budget."
Khouri says Michigan's demographic trend of an aging population means school districts will have to continue to tighten their belts in the years ahead, while maintaining as much quality of education as possible.
Overall, 16 districts eliminated deficits in the last year. Sixteen others were able to reduce their budget deficits.
Five school districts went into the red in the last year.