Legislation Would Offer Low-Interest Emegency Loans to Cash Strapped Cities, School Districts

State Rep. Mark Ouimet, R-Scio Twp., says that Michigan’s struggling school districts and municipal governments will be able to receive low-interest emergency loans thanks to legislation that passed the house last week.

"Some of our local cities, township, villages and schools have struggled with declining revenues due to the state's economic hardship," Ouimet said. "These important measures provide another tool for stressed municipalities to help deal with a financial emergency that actually could cost taxpayers more in the long run."

Ouimet, chairman of the House Local, Intergovernmental and Regional Affairs Committee, shepherded the bills through the committee process, according to a news release issued by his office. House Bills 5566-70 allow the state treasurer to make $100 million available to schools and governments in distress. The legislation increases funding for an existing loan program.

Ouimet’s Democratic opponent in the November election for the 52nd District, Gretchen Driskell, bristled at the announcement.

“I find it ironic that the state is setting up a ‘low-interest emergency fund’ for schools and local government after they chose to cut over $600 million in revenues to schools and local governments last year, after years of understandable cuts due to the economy, in order to pay for a business tax cut,” said Driskell, the longtime Mayor of Saline.

Driskell said municipalities are hurting because Lansing has failed to live up to its promises.

“Here in Saline we have not received over $4 million in statutory revenue sharing since Proposal A was enacted. Across our county K-12 budgets were cut by the state over $10 million last year. If the personal property tax is eliminated as is being proposed that would be an estimated $43M elimination of revenue to schools, local government and libraries in our county alone,” Driskell said. “Are they planning on increasing the ‘emergency loan’ fund after that is implemented?”

The extra funding may be issued until Sept. 30, 2018, under the legislation.  Ouimet said no local governments have ever defaulted on a loan in the existing program. The program currently contains $5 million annually in funding for the loans.

The bills, approved with bipartisan support, now go to the Senate for consideration.