The recession has made it harder for local governments and school districts to balance their budgets. This summer the governor signed a new law creating a board that will help those hardest hit cope with short term cash flow problems.
Earlier this month the emergency financial managers of both Muskegon Heights Public Schools and Highland Park schools got emergency loans to pay off other state loans. MHPS borrowed $7.65 million while Highland Park schools borrowed $4.4 million.
“It’s not a handout; it’s a loan in order to help get people on their feet, in order to make the changes that are necessary going forward,” said Caleb Buhs, a spokesman for Michigan’s Department of Treasury. The school districts have 30 years to pay the state back.