DETROIT – Something happened in Michigan last week that was almost unnoticed – but which may have a far bigger impact on the state than the Democratic presidential debates in Detroit.
Early on July 31, while the media was focusing on whether Kamala Harris could slam-dunk Joe Biden again (he didn’t) the Michigan Court of Appeals issued a ruling that is likely to mean more money – perhaps a lot more — for cash-starved local governments, which have argued for years that they’ve been shortchanged by Lansing.
Local governments have long bitterly protested cuts the state has made in revenue sharing money they were promised – a total of more than $8 billion since 2002, according to the Michigan Municipal League. Wonder why your park looks a little shabby, or why your city can’t provide the kind of services it once did?
That may be because the state has been taking money promised cities and towns, counties and townships to fill state budget holes.
So this year, a coalition of representatives of more than a dozen local governments calling themselves Taxpayers for Michigan Constitutional Government sued the state, claiming it was violating Michigan’s state constitution by shortchanging local governments.
The rules governing how much revenue states are obligated to share with local units of government is based on the 1978 Headlee amendment, which limited property tax increases, and required Lansing to share about 49 percent of its money.
But what irked local governments most was that the state was counting money as “shared” that they had no control over.
Taxpayers for Michigan Constitutional Government charged that there were three major areas where the state was violating the law, by counting as revenue sharing: 1) Payments to local school districts since 1994, when Proposal A changed their funding to a primarily state-based model, 2) Payments to charter schools, which also get state funding and 3) Spending local governments are required to make for state-mandated local services and activities.
The usual three-judge Michigan Court of Appeals panel ruled unanimously that state payments to local public schools could be counted as legitimate revenue sharing under the law.
They split 2-1 over the question of whether charter school funding was legal – but again found for the state.
But they handed Taxpayers for Michigan Constitutional Government and the communities they represent a unanimous victory on the question of state-mandated local services.
Writing for the court, Judge Stephen Borrello said the state was constitutionally required to “fully fund the implementation costs of any new mandate imposed on a unit of local government.”
That is, they can’t count it as part of local revenue sharing, which they have been doing. One example of such a service: School transportation services the state has required public schools to have.
Another such cost – special educational programs the state has required in districts that weren’t already offering them.
This pretty clearly means more money for local school districts, and in some cases, communities as well. But how much more?
That isn’t easy to say. Steve Duchane, a longtime local official who is one of the two founding members of the taxpayers’ group, estimated it would be in the tens of millions. But the state has never produced a report breaking those expenses down.
The court of appeals ruling, however, seems to make it clear that state government needs to start doing just that. State budget officials may be relieved that Taxpayers for Michigan Constitutional Government did not ask for retroactive payments.
So the new rules evidently begin now.
But this may not be the end of the matter. John Mogk, a longtime law professor who has been deeply involved in Detroit affairs for years, is the other co-founder of the group.
He indicated that they are likely to appeal the court’s ruling that it is legitimate to count payments to charter schools as revenue sharing. While the court ruled 2-1 that it was, “the dissenting judge agreed with our argument that they are not, and we firmly believe that he is right,” said Mogk, who twice ran for mayor of Detroit.
Should Michigan’s Supreme Court rule against the state on charter schools, it could mean far more money for local governments, and possibly shake the state’s entire charter school industry.
Stay alert for future developments.
Reality Check: National as well as local media may have obsessed over every detail of the Democratic debate in Detroit last week. But how many people watched them? Nationwide, fewer than 9 million the first night; less than 11 million the second.
How many of were still tuned in after Biden and Harris’s mind-numbing early argument about the details of their respective health plans is not known.
But I suspect many may be like Amber, a restaurant server in the Detroit suburbs who I talked with the day after the debates ended.“No, I don’t pay much attention to politics until the final, just before the election,” she said, which she thought was months away.
When told that the election was actually in 2020, the server, who recently earned a graphic design degree, was baffled.
“It’s not even this year?” she asked.
