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Horn legislation resolving Buena Vista’s debt passes Senate

Sen. Ken Horn

Sen. Ken Horn

LANSING, Mich. — State Sen. Ken Horn’s legislation to assist Buena Vista with an ongoing issue that stemmed from the dissolution of the school district in 2013 passed the Senate Thursday.

Senate Bill 356 provides a mechanism for the Saginaw, Frankenmuth and Bridgeport school districts to start collecting non-homestead taxes for territory that was inherited through the Buena Vista dissolution. All money collected must first go toward paying down the Buena Vista debt, currently estimated at approximately $700,000, until the amount is paid in full.

“This has been a largely cooperative effort between legislators and state and local officials,” said Horn, R-Frankenmuth. “Everyone involved has been diligently working to find a solution to an issue very specific to the Saginaw area. We’re determined to find a compromise that will not only benefit the community of Buena Vista and the receiving school districts, but the state of Michigan as a whole.”

In the specific case of Buena Vista, the annual 18-mill school operating tax generates roughly

$1.6 million in revenue which, prior to dissolution, was used to support the cost of the district’s per-pupil foundation allowance, with the state paying whatever was not covered by the $1.6 million. Until the debt is repaid, the state is indirectly also paying that $1.6 million through higher state share foundation allowance costs paid to the receiving districts since the districts themselves cannot currently collect that revenue.

If the receiving districts had the ability to levy taxes themselves, as this bill would allow, the operating debt held by Buena Vista could be repaid in just one year. The $1.6 million to cover operational costs could then be levied by the receiving districts, thereby reducing state costs in the same amount.

“I hope the state never has to dissolve another school district, but if it does, I want to make sure we don’t run into the same problems that we’re seeing in Buena Vista. There needs to be specific guidelines to facilitate the process,” Horn said. “I am happy that my colleagues on both sides of the aisle were able to see the importance of this legislation and voted to continue progress on this issue.”

SB 356 is now before the House of Representatives Appropriations Committee for consideration.