The Michigan Legislature recently considered legislation concerning "distressed schools" and creating a process to establish an "early warning system," to avoid state intervention due to financial stress.

Currently there are  48 distressed schools or districts at risk of financial disstress in Michigan. Some districts have a short-term hiccup, while others face long-term issues, such as continued declining enrollments and increased labor costs.  According to Gongwer, the multi-bill package proscribes measures for financially distressed school districts—with advocates noting—doubles the maximum amount the Emergency Financial Assistance Loan Board is authorized to lend troubled districts, revises the loan’s eligibility criteria, eliminates restrictions on the Board’s ability to restructure existing loan repayment programs and removes limitations on the amount of surplus funds that can be loaned to municipalities and school districts over the next six fiscal years.

A number of school officials are opposed to the legislation, arguing that some of the measures’ reporting requirements and criteria are burdensome and possibly redundant, and would actually add to the district’s financial woes.  However, those same school officials should work with a facilitator to engage stakeholders in defining the problem and working in advance of the state stepping in to identify and implement realistic solutions.

By being proactive and engaging your community early on, you can avoid difficult situations down the road. However, acknowledging the problem and engaging others in the solution is a difficult process, one that can be helped by brining in a neutral to guide the discussion and help extract solutions.