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Buena Vista voters must repay debt from nonexistent school district

Steve Carmody/Michigan Radio

Buena Vista township has a debt to pay.

Though the Saginaw County community closed its school district last July, the non-existent district still owes more than $6 million to the state.

The district owes more than $2 million on a bond that voters approved in 2005 and more than $4 million on its general operating budget.

How exactly the $4 million from the general budget will be repaid is a question to be decided by voters next year.

The money will likely be paid through a tax on businesses and non-homestead property. That is, unless voters decide not to renew the tax on the defunct school district.

If voters do not renew the tax then the Michigan Treasury Department could issue what's known as a judgment levy against taxpayers to collect the debt, according to Chris Frank, assistant director of finance and business operations at the Saginaw Intermediate School District. 

"Ultimately, they may end up having to pay for it anyway," Frank said.

He added that while voters may dislike the idea of paying for a nonexistent school district, those same voters will soon be paying taxes for their new school district. In other words, these payments are not an additional debt. Rather, they are payments that are still attributed to their former district as opposed to the district in which they currently live.

"It's sort of a levy that's paid to somebody," he said. "It's just a matter of the fact that ... with that millage renewal request, you're asking districts to attribute that money to a district that doesn't exist ... that's obviously why it will be a tough sell."

The current tax expires after the 2014-2015 school year.

- Jacob Axelrad, Michigan Radio Newsroom