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Ryan Eashoo
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State threatens to yank millions of dollars from Flint School District
Posted by Marjory Raymer and Melissa Burden | The Flint Journal November 29, 2007 21:00PM
Categories: Breaking News, Courts, Flint, K-12 Education
FLINT -- The cash-strapped Flint School District faced the possibility of not being able to hand out paychecks to teachers and other workers because millions of dollars in funding was withheld earlier this month over an old tax dispute, court documents show.
The long-running fight involves the district, the state and the city of Flint, and it could have big ramifications on the schools.
Under orders from the state, the city of Flint withheld nearly $1.6 million in property taxes from the district on Nov. 19.
It planned to withhold another $5.4 million before the district won a temporary restraining order last week. Genesee Circuit Judge Archie L. Hayman ordered the city to immediately repay the $1.6 million.
"It is a deprivation of funds that the school district did not anticipate or budget for. As a result, teachers may lose their jobs, students may go without books, meals may be eliminated, security officials may have to be let go, etc.," district attorney Kendall Williams cq wrote in his request for the restraining order.
He added later that withholding the schools' funding, is "potentially making it unable to meet payroll."
The district received the city payment on Tuesday.
"We couldn't afford to lose the money at this point," said Andrea Derricks, the Flint schools' acting chief financial officer.
The state claims the school district owes it $7 million because the city of Flint sent the schools more than its share of tax revenue from 1994-2000. Derricks said the state instructed the city to withhold the funds over a three-year period.
The error resulted from confusion over Proposal A, passed in 1994, that changed the way schools are financed. It also came at a time when a series of financial missteps plagued the city such as chronically late audits and delayed tax reports.
The state filed a lawsuit trying to recover the industrial facility tax money, collected from companies granted tax abatements.
The state sued in 2004, but the case was dismissed the following year because the state failed to pay a fee. The state attempted to have the suit reinstated but failed.
Now, two years later, it is still trying to collect the funds.
"They are desperate for money and they are doing things that I believe in my opinion areis not appropriate," said Williams, referring to the state's struggles to balance its own budget.
In most instances, the statute of limitations would be six years for recovering money, Williams said.
Flint schools had set aside $7 million years back should it need to pay it over the dispute, but has since spent much of those funds after the lawsuit was dismissed.
Flint Board of Education Vice President Raymond Hatter declined to comment because he hadn't heard about the the case.
The action comes at a time when the school district is already scrapped for money, facing a shrinking raining day fund, and dropping student enrollment. It costs the about 15,300-student district up to $5 million to meet its payroll every two weeks, Derricks said.
A hearing at 3:30 p.m. Dec. 17 will determine if an injunction will be issued to stop the city and state from withholding future school funding.
The Journal could not reach officials from the city of Flint and state attorney general's office, which filed suit on behalf of the state, for comment.
The state Department of Treasury notified the city of Flint in August that it intended to collect nearly $7 million in overpayments of industrial facility taxes made to the district.
The city also gave too much to the Genesee Intermediate School District from 1994-2000, but the GISD already paid the state the $420,000 it received improperly, according to the state Treasury Department. |
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Flint Michigan Resident, Tax Payer, Flint Nutt - Local REALTOR - Activist. www.FlintTown.com |
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Thu Nov 29, 2007 9:53 pm |
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last time here
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jesus keeeerist!!!!!!!!
as if these kids have'nt put up with enough crap.......
isn't this what a school board is for???
i wonder if the mayor would consider taking over the school system??? |
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Thu Nov 29, 2007 10:09 pm |
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Dave Starr
F L I N T O I D
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| Can you spell incompetent, boys and girls? Sounds like somebody needs a whuppin. |
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I used to care, but I take a pill for that now.
Pushing buttons sure can be fun.
When a lion wants to go somewhere, he doesn’t worry about how many hyenas are in the way.
Paddle faster, I hear banjos. |
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Fri Nov 30, 2007 8:15 am |
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twotap
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quote:
Can you spell incompetent
Yes I can Flint City Government for the past 40 years. 
Hey Lt look before ya leap.  |
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Fri Nov 30, 2007 10:21 am |
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