State takeovers of financially strapped schools, districts can lead to closures and consolidation

When financial trouble plagues American schools, 29 states have the ability to take control of districts, and 23 can take over individual schools, often leading to school closings and consolidation, Adrienne Lu reports for Stateline. "Since New Jersey became the first state to take over a school district (Jersey City) in 1989, about 50 school districts nationwide have been taken over or reorganized by states, whether for financial reasons, academic reasons or both."

The New York state comptroller's office found that 13 percent of school districts were “operating with dangerously low or nonexistent fund balances, chronic operating deficits and extremely limited cash on hand,” Lu writes. In California "eight school districts have negative certifications, meaning that based on current projections, the school districts will not meet their financial obligations for fiscal 2014 or 2015. Another 41 school districts may run out of money by fiscal 2016."

The Michigan Department of Education, which closed two schools last year, "is currently monitoring another 46 school districts in financial trouble; each district must submit a plan to eliminate its budget deficit within two years after the state has approved the plan," Lu writes.

But some states, such as Michigan, "have adopted emergency provisions to help struggling school districts out of a bind, including allowing them in some cases to break or renegotiate union contracts," Lu writes. Idaho has a similar law. (Read more)