(CNN) -- An eight million dollar payment made on Friday means an end to more than decades of debt for a California school district. The lump sum was the last of about $47 million West Contra Costa Unified School District paid to California for a loan taken out more than two decades ago.
School officials admit that financial mismanagement led to bankruptcy 21 years ago. "We did not budget properly. We have more obligations than we could afford and the state cut revenue," school board president Charles Ramsey said.
The district, then known as the Richmond School District, threatened to close six weeks before the end of the 1991 school year. A lawsuit filed by Richmond parents forced the state to loan the district $29 million and kept the schools open.
A relatively high interest rate added about $18 million to the district's debt over the life of the loan.
The state agreed to lower the interest rate in 2004 after teachers marched on Sacramento and held a hunger strike.
School officials say the interest rate reduction, cuts in salaries and school programs, and sales of school property led to the district paying off the loan four years early. Officials expect to see a $1.4 million savings this year because of the retired debt.
West Contra Costa superintendent Bruce Harter said, "What it will help with is to do is not make cutbacks that we otherwise would have made. So there are a number of teachers who will have jobs that would have been laid off otherwise and class sizes would have been larger."
Teacher Wendy Gonzalez, who helped organize the 2004 march and hunger strike, hopes the budget surplus will have an impact on classrooms. After Friday's ceremony, Gonzalez told students and co-workers that she would like to see West Contra Costa have "things that other school districts have and ours doesn't," including lower class sizes and technology improvements.