Utica joins movement to sue state over revenue sharing

By: Sarah Wojcik | Shelby - Utica News | Published May 18, 2016

UTICA — On May 10, the Utica City Council unanimously voted to allocate $1,500 toward legal action that the nonprofit group Taxpayers for Michigan Constitutional Government plans to take against the state of Michigan.

The newly formed movement claims that the state shortchanged local municipalities “by miscounting under the Headlee Amendment the money that constitutes revenue sharing,” Utica Mayor Jacqueline Noonan said.

“I use that verb, ‘constitutes,’ fully intentionally referencing the fact that we’re talking about a constitutional amendment and that, through three governors, it’s been misinterpreted,” Noonan said.

Eastpointe City Manager Steve Duchane, who helped form the group, said that under the state constitution, the state should allocate 48.97 percent of its spending toward local municipalities and public schools. The state has instead been providing closer to 33 percent, he said.

The Headlee Amendment and Proposal A have limited the amount of revenue that taxing jurisdictions can collect from an increase in property values. Duchane estimated that such jurisdictions have been shortchanged $3 billion.

“It’s time to grab the bull by the horns and be the crazy uncle that says we’re not going to take it anymore,” he said.

Duchane said the organization hopes the proposed litigation would force the state government to follow the state constitution and change funding calculations, since previous efforts to negotiate outside of a courtroom have proven fruitless.

Noonan said the Michigan Municipal League hired Plante Moran in the early 2000s to study how local governments — including counties, villages, cities and townships — are funded in Michigan.

“The conclusion of their 18- to 24-month study involving a great deal of expertise was that the Michigan financial or fiscal model was broken, and that part of the cause of that was that the Headlee Amendment is not properly being interpreted,” she said.

Utica City Attorney James McGrail recently attended a Macomb Area Communities for Regional Opportunities, or MACRO, meeting about the proposed litigation. He said it was his understanding that most of the communities in Macomb County are in favor of the movement and have contributed funds toward the cause.

“What we’re really doing is paying an attorney and a firm that specializes in this. Dr. (John) Mogk, (a professor for the Wayne State University Law School), is the leading representative for all of the municipalities,” McGrail said. “I am very supportive of this. I think it is a wise business decision and expenditure.”

Councilman William Osladil made the motion, supported by Councilwoman Faith Terenzi. Osladil said he feels the Taxpayers for Michigan Constitutional Government has a strong and well-documented case.

Duchane said the fundraising goal is $30,000, and at least a dozen communities had given or pledged $19,500 in financial support at press time.

“We’re looking to file in the next two weeks,” he said in a May 12 interview.

The Michigan Attorney General’s Office could not be reached for comment by press time.

Staff Writer Kevin Bunch contributed to this report.