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headlee amendment

Brooklyn, past and present
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Cities, towns, and villages across Michigan are struggling to provide basic services, like road maintenance. Local budgets face reduced revenue sharing from the state and are also limited in how much money they can generate through taxes, a result of the Headlee Amendment of 1978.

The Michigan state capitol building
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.

When local governments get sued and lose, Michigan residents can end up paying taxes that voters never approved and that exceed state limitations.

Normally, that can’t happen under the Headlee Amendment to the state constitution. But as the result of a Michigan Supreme Court decision, there’s an exception for court-ordered judgments.

(photo by Steve Carmody/Michigan Radio)

Tomorrow, the Michigan Supreme Court will consider a rule change that could put local governments in a stronger position to challenge unfunded state mandates.  

The Headlee Amendment is a state constitutional amendment meant to reduce unfunded state mandates on local governments, like requiring but not necessarily providing extra money for special education programs.