The Michigan State Budget Office is making contingency plans for a partial government shutdown. That would come if there’s no budget deal by October 1 between the Legislature and Governor Gretchen Whitmer, who is planning to deliver an address Tuesday calling on lawmakers to negotiate in earnest to send her a budget before the deadline.
K-through-12 schools are already in a bind with no idea what to expect by way of state funding two and a half months into their fiscal year, which began July 1.
Robert McCann is the executive director of the K-12 Alliance of Michigan, which represents school superintendents. He said some districts with smaller fund balances saved are looking at borrowing money from private lenders if there is a protracted shutdown.
“And that’s a terrible option for a district to have to go through, but, if it’s their only option, it’s the only thing they can do at that point,” he told Michigan Public Radio.
But those borrowing costs would have to come from elsewhere in local school budgets, including spending that goes to classrooms and instruction, said Robert Dwan, executive director of Michigan School Business Officials. He said schools would be borrowing against future state aid checks.
“You will pay not only application fees, potentially, or bond counsel fees, but you’re also going to pay an interest rate,” he said.
That burden would likely fall most heavily on school districts least able to afford diverting resources from instruction and student support.
State departments and services would also be affected. The scope and timing of service rollbacks is still in the planning stages.
“While we have begun contingency planning for different scenarios, it's still too early in the process to determine what a shutdown would look like,” budget office spokesperson Lauren Leeds said in an email last week. “Our focus remains on enacting a full budget that protects Michiganders and our economy.”
