79 Percent Of School Officials Believe Shutdown Is Coming

(Source: MIRS.news, Published 08/22/2025) A summer survey of 214 local school officials found that 79 percent do not have confidence that a state budget deal will be reached before a government shutdown goes into effect on Sept. 30.

In response, 15 percent of the survey conducted by their Michigan School Business Officials (MSBO) said they've already cut their Fiscal Year (FY) 2026 budget. Another 44 percent said they are considering doing the same.

If the Legislature and Governor are unable to complete a FY 2026 budget by early October, 43 percent of school districts would have cash flow problems on Oct. 20 if the state aid payment was delayed. This could mean vendor bills being delayed, problems meeting payroll obligations for teachers and staff and “significant problems” with continuing district operations.

“We have panicked teachers and staff,” said one MSBO survey respondent. We have held out as long as possible on some crucial purchases to the point where we’re starting school without valuable resources. We’re highly concerned that this will lead to major non-staff cuts, elimination of certain programs, or layoffs.”

Historically, state legislators have tried to complete a School Aid budget by July 1.

After the messy 2019 budget cycle in which the Republican legislature dumped a non-negotiated budget on Whitmer's lap in late September, a law was passed requiring the Legislature to get the coming year's budget bills done by July 1.

Gov. Gretchen Whitmer has signed the coming year's School Aid Fund budget in July in the last four years. Since 2011, the state's School Aid Fund budget has been signed in June or July for all but two years – 2019, Whitmer's first year, and the COVID-panicked year of 2020.

Local school officials are expecting an increase. An 82 percent majority believe they will, ultimately, receive a state aid increase, while 66 percent say the size of that increase will be between $200 and $400 per student.

The survey found that schools are already under financial stress regardless of the budget's timing, due also to federal stimulus dollars drying up. It found that 67 percent are in deficit spending going into FY 2026, which is 25 percentage points higher than the 42 percent who were spending more than they were taking in during FY 2025.

It found 52 percent of schools have made cuts in their initial FY '26 budgets.

While 42 percent of the district officials say they are cutting positions through attrition, 11 percent said they are being forced to layoff classroom personnel. Delaying technology purchases, holding off on filling open positions, cutting supply budgets, freezing salaries and shifting spending elsewhere are the more common strategies, according to the MSBO.

In response to the survey results, Peter Spadafore of the Michigan Alliance for Student Opportunity, Tina Kerr of the Michigan Association of Superintendents & Administrators, Don Wotruba of the Michigan Association of School Boards and John Severson of the Michigan Association of Intermediate School Administrators combined on a joint statement that read, in part:

"The Legislature has already broken the law by missing the July 1 statutory deadline and still has not passed a School Aid Fund budget.

"Many districts have already started the school year with the rest shortly behind them. Superintendents cannot simply assume that funding will 'work itself out.' Different positions and programs — from literacy coaches to school safety to universal meals — depend on specific budget lines.

“Without certainty, leaders are left with no choice but to make tough, often painful decisions now to protect their districts’ long-term stability.”