Lawsuit: State shortchanging locals by $4 billion a year

Sep 7, 2016

Credit Thetoad / Flickr - http://j.mp/1SPGCl0

A lawsuit filed today threatens to blow a $4 billion hole in the state budget.

The legal action says that’s how much the state shortchanges local governments every year.

The lawsuit says the state’s been playing a shell game with local revenue sharing payments.

John Mogk is a Wayne State University law professor who filed the lawsuit. He says the state has been improperly claiming payments made to school districts, charter schools, and for road repairs against local governments’ share of sales tax revenue.

“Accordingly, revenue sharing to local governments is going down in violation of the state constitution."

Mogk says that amounts to an illegal tax shift under the state constitution’s Headlee Amendment.

The lawsuit was filed in the Michigan Court of Appeals. There’s no word from the state budget office on how it will respond to the lawsuit.

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