Communities get partial win in court fight over tax dollars

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LANSING, Mich. (AP) – Local governments have won a partial victory in the Michigan appeals court in a dispute over how state government shares tax dollars with communities.

The constitution requires that about half of state revenue be returned to local governments. But when the state makes that calculation, the appeals court says it can’t count money that pays for state-mandated activities.

Attorney John Philo says it likely adds up to hundreds of millions of dollars. He says local governments have been squeezed for years by “accounting tricks” in the capital.

But in the same opinion, the appeals court this week said the state can count aid to school districts and charter schools as payments to local governments.

The court also ordered state government to publish information about the cost of state mandates. The court says the state has undermined the “role of taxpayer oversight.”

There was no immediate comment from the attorney general’s office. A Supreme Court appeal by either side is possible.

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