CHICAGO - The Wayne County, Mich. board Thursday rejected a proposal to cover a court-ordered pension payment with a special property tax levy, voting instead to dip into a delinquent revolving tax fund.
A Wayne County Circuit Court judge on May 29 ordered the county, home of Detroit, to make a $49 million payment into the retirement system to make up for money it did not contribute in 2010. The judge agreed that the county could impose a one-year tax levy after top officials said the county cannot afford to cover the payment.
Wayne County Executive Warren Evans, who has repeatedly warned of a state takeover without structural changes, urged the board of commissioners to impose the special levy, which would cost the owner of a $100,000 home about $62, according to local reports.
But the board instead voted 10-4 to tap the Delinquent Revolving Tax Fund to make the payment.
The revolving fund, which provides local governments with funds to cover uncollected property tax payments, has $78 million.
"I believe that it's just unthinkable that it would go on tax rolls because we can pay," Commissioner and board chair Gary Woronchak, D-Dearborn, said according to the Detroit Free Press.
It's the county's latest move as officials struggle to restructure the government and eliminate a $52 million structural deficit. Evans has proposed a recovery plan that balances the annual budget but does not deal with an underfunded pension plan or with a $200 million, bond-financed jail that sits half-built and abandoned in downtown Detroit.
A spokesman for Evans told local reporters that dipping into the revolving fund would hurt Evans' recovery plan and the county's ability to borrow money to deal with the half-built jail.