LANSING, Mich. — A state Senator wants to refuse any more state aid to public school districts that have saved up too much money, according to The Detroit News.

Sen. Jack Brandenburg, R-Harrison Township, said he would introduce legislation to cap “rainy day funds” in each district at an amount equal to 15 percent of a district’s annual operating expenditures, The News reported. Districts with more savings would have to spend it down before receiving further state funding, the report said.

The Senate Fiscal Agency calculated that public school districts have approximately $1.6 billion in “surplus” funds statewide, The News reported. The amount varies widely ? some schools are in a deficit position — but approximately 300 districts would be affected, according to The News.

Brandenburg said school districts should not amass savings while also complaining about budget cuts, but critics told The News that school districts should not be punished for being frugal. They also said that rainy day funds are needed for unexpected expenses and to tide districts over during gaps between state aid payments.

The Michigan School Business Officials organization recommends a 15 to 20 percent fund balance, The News reported. A representative from Gov. Rick Snyder’s office told The News that one concern is whether the plan would be a one-time fix of the sort the governor is trying to avoid, The News reported.

SOURCE:
The Detroit News, “State senator targets Michigan school districts with flush rainy day funds,” March 10, 2011

FURTHER READING:
Mackinac Center for Public Policy, “Proposal would punish prudent school districts,” April 1, 2010

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