LANSING–A state Senate committee heard public testimony Wednesday on legislation that would prohibit court judgments to be levied against school districts for operating costs, said the bills’ sponsor Sen. Jim Marleau, R-Lake Orion.
Senate Bills 442 and 443 are designed to protect taxpayers from financially irresponsible school districts.
“These measures address a gaping problem in the current law, which was exposed by a court decision in my district,” Marleau said. “As was evident from today’s testimony, the adverse consequences of the decision have had a profound effect on people.”
The legislation was prompted by a $7.8 million court judgment against the Pontiac School District for the district’s missed payments to Michigan Education Special Services Association (MESSA), the organization that administers the district’s health and related employee benefit plans.
Responsibility for paying for the judgment will be passed on to taxpayers in the district.
Those who testified Wednesday in support of Marleau’s bills included residents and businesses owners from his district.
“The Legislature passed Proposal A years ago to protect taxpayers from paying for school operating costs, but this judgment puts taxpayers in the Pontiac School District on the hook for such costs, to the tune of nearly $8 million,” Marleau said.
The lawmaker said by law it is too late for his measures to address the situation with Pontiac Schools.
“Unfortunately taxpayers in the cities of Pontiac and Auburn Hills, as well as those in Orion Township, Bloomfield Township, West Bloomfield and Sylvan Lake, will most likely notice a significant increase in their summer tax bills,” he said. “It’s sad that the $8 million levied against taxpayers will pay off the MESSA credit, not to fund our children’s education. MESSA spent 18 months providing a benefit our community could not afford, confident that taxpayers would foot the bill. It remains to be seen if the Pontiac School District will ever recover.”