CHICAGO — After years of struggling with debt, residents of a small Michigan town voted to bite the bullet and tax themselves to pay off bonds tied to a failed real estate development.

The predicament of Sylvan Township, population 2,833, is far from unique in Michigan. Its residents voted to more than quintuple their local township tax rate for 20 years to pay off $12.5 million of bonds. In so doing they chose the certainty of a higher tax rate over uncertainty posed by litigation over the debt.

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