The Buena Vista School District, located just outside of Saginaw, said in a posting on its website that school was closed for the day. The district held a community meeting Tuesday evening, but there was no immediate report regarding classes and if or when they would resume.
The Associated Press left a phone message with the superintendent's office Tuesday night.
The district's board voted Monday night to lay off an unspecified number of employees.
"We're continuing to try to develop the best plans for students," Deborah Hunter-Harvill said. "We're working to come up with strategies. I'm not working alone."
Buena Vista Education Association President Joe Ann Nash said in a telephone news conference Monday that the district's 27 teachers would work this week in the hopes that the state and the school district can come up with a plan to keep classes in operation.
In a statement Tuesday, Democratic U.S. Rep. Dan Kildee of Flint said it was unacceptable that the students and teachers are paying the price for a problem they didn't cause.
"The state of Michigan and the school district need to work together to find an amenable solution to pay teachers and school staff," he said. "This matter needs to be resolved immediately so students in Buena Vista can return to school tomorrow."
The Michigan Education Association said the district is putting money before the interests of children.
"Faced with a selfless offer of help from their employees to continue working, without the guarantee of a paycheck next payday, Buena Vista's school board and administration gave up on their students and employees," MEA President Steve Cook said in a statement.
The school district in Saginaw County announced last week that it won't be able to make payroll on May 24 because the state has put a hold on its funding to recoup about $580,000 for a juvenile detention education program the district no longer operates. Teachers will receive their final paychecks on Friday.
Michigan started withholding money in April and will continue to do so through part of July, the state Department of Education has said.
Enrollment has declined from more than 900 in 2010 to about 400 this year. The school district has been in debt since 2011, with its deficit reaching $1 million last July, the state said. In addition, the Buena Vista district will owe the state about $2 million in loans in August.
According to the school district's website, it is taking steps toward confirming a financial emergency, which could lead to an emergency manager being installed to help bring the school district out of debt.