Albion schools must borrow to pay employees

Jan 14, 2011

Many Michigan school districts are struggling to stay afloat.  Some have to borrow money to pay employees.

The city of Albion boomed in the 1950s and ‘60s, but fell into a steady decline in the 1970s when auto-related industries began to close.

Albion’s population shrank and so did the property taxes the school district depends on.

To make matters worse, state revenue sharing has been in tumult the past several years.

John Waugh is Albion Public Schools’ accounting supervisor.

He says the district has already made steep cuts and privatized many services.

But now it has to take out a $1.5 million loan so it can meet payroll.

"If we're not getting any more money locally or any more from the state, I suppose probably next year we're going to look at layoffs again, based on the budget.," Waugh says.

 The State Board of Education says about 40 Michigan school districts are in a similar situation… and have to borrow to make payroll.