LANSING, Mich. (Michigan News Source) — Madison District Public Schools in Metro Detroit is headed into the school year nearly broke, and now under the state’s watch.
The numbers.
With only $84,272 left in its general fund and a projected $1.03 million deficit by 2026-27, the Oakland County district has drained a once-healthy balance of $4.7 million in just five years. The state now requires a formal deficit elimination plan, plus monthly revenue and spending reports.
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“We must provide specific details to the state on how we plan to decrease the deficit within a two to five-year period,” Business and Finance Director Ebony Thompson told the school board at its July 7 meeting, according to The Detroit News. “We make a collaborative effort with everyone who works at Madison in order to eliminate the deficit.”
At issue: the district kept spending like it still had COVID-era federal relief.
“We were still operating like we still had the ESSER funds and we didn’t have ESSER funding anymore,” Superintendent Patricia Perry said.
Staff turnover.
Thompson added that budget discipline broke down amid staffing churn: “We did not plan for it because we have had four business director interruptions in the last three years.”
The final round of Elementary and Secondary School Emergency Relief (ESSER) funding—$4.3 million in Madison’s case—expired in fall 2024. By July 1, the district’s budget showed $16.8 million in revenue and $17.8 million in expenses.
“It is absolutely our fault,” Thompson said. “We should have made cuts last year.”
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Now, cuts are coming: hiring freezes, travel bans, no step raises, and a staff reduction from 152 to 140 employees by 2026. The district will also rent out early childhood classrooms to raise revenue and delay nonessential capital projects.
Still, Madison projects a $288,000 deficit by the 2028-29 fiscal year.
A thin financial cushion.
The state recommends school districts keep a fund balance of 15–20% of expenditures as a cushion. Madison’s sits at 0.5%.
The district does have $1.9 million in its restricted sinking fund and $1.3 million in its capital projects fund—but neither can be used to cover salaries, textbooks, or day-to-day operations.
The board, Thompson affirmed, was informed.
“In February … I presented that we were already overspending by a million dollars,” Thompson said. “It was communicated that we would probably be going into a deficit … the information was there, I just don’t think we acted on it as we should have.”