CHICAGO -- A Michigan taxpayers group has filed a lawsuit challenging the constitutionality of a new state law that forces wealthy school districts to share a portion of their property tax revenues with poorer districts.
The Macomb County Taxpayers Association in charging that the law, enacted last month, violates the so-called 1978 Headlee Amendment to the state constitution in two ways; it places an unfunded state mandate on the wealthier school districts and creates a new local tax without approval of the voters.
Michael Stella, the association's chairman, said voters in the districts affected by the law voted for property tax levies to fund their local schools. By diverting some of the revenues to other districts, the new law, in effect, creates a new tax without voter approval.
"The people in those districts approved property taxes to fund their own schools, not other schools," he said.
But one of the sponsors of the tax sharing plan, state Senator Dan DeGrow, R-Port Huron, said he was confident the constitutionality of the law would be upheld. He dismissed the claims that the law creates new local taxes or an unfunded state mandate.
"The constitution gives the legislature the power to decide how schools will be funded," he said.
The law requires the 170 richest school districts to share up to half their annual growth in tax collections from commercial and industrial property with the remaining 390 school districts in the state.
The suit was filed last Friday against 12 school districts in Macomb County that were scheduled to remit part of their property tax revenues today to the state so the money could be redistributed to other districts. On Monday, Macomb County Circuit Court Judge Robert Chrzanowski issued a preliminary injunction barring any of the districts from transferring money to the state. No hearing date has been set, Mr. Stella said.
Representatives of the districts found themselves welcoming a lawsuit, said Thomas Dobbs, superintendent of Warren Woods Public Schools, which was named in the suit.
"The result of the injunction is that a certain number of dollars are going to remain in the county," Mr. Dobbs said. "No one is unhappy about that."
Mr. Stella estimated that the 12 school districts would have remitted about $5 million in property tax collections to the state if the injunction had not been granted.
The group sued the districts and not the state to keep all property tax revenues within the county while the case is being decided, Mr. Stella said. He added that the long-term goal is to get the law overturned as being unconstitutional.
The Michigan attorney general's office said no decision has been made, but that it is likely the attorney general will seek to intervene in the case at some point to defend the constitutionality of the law. A spokesman for Gov. John Engler, a supported of the tax sharing plan, could not be reached for comment.
Sponsors of the law said it is intended to narrow the annual per pupil funding differences among Michigan school districts, which the state estimates ranges from $2,500 to $9,000. It exempts property tax levies dedicated for debt service from redistribution.
