$1.8 million repayment to state becoming a bitter pill for school district

Sunday Times Newspapers

WYANDOTTE – Wyandotte Public Schools has found a way to slowly pay off part of its balance with the state.

After the state overpaid the district $1.8 million in taxes between 1995 and 2000, it demanded over the summer that the funds be repaid immediately.

The district had questioned state officials about the additional funds before, but were told there was no problem. To be safe, the district stored $800,000 in its debt fund and $1 million in a liability account.

District officials said the state refused to deal with the district, but went to the city for a resolution instead. The city and school district are separate entities with separate budgets operating on different fiscal calendars. The district’s fiscal year begins July 1, while the state and city’s fiscal years begin Oct. 1.

As with any budget, an unexpected $1.8 million loss is not something that can be accounted for easily, and the district is unable to pay it back in one lump sum as the state would prefer. The fact that the state refused to deal with district officials only complicated matters further.

In order to collect funds of some sort from residential taxpayers, the state withheld $99,890 from revenue owed to the city in July. Since the city budget and the district budget are separate, that complicated things further and forced the city to be a part of the situation.

The district paid the city the nearly $100,000 difference out of its debt fund and will chalk the payment up as if it had paid back the state, enacting a cycle of payments to one group on behalf of another.

The repayment circle struck again early in September, when the state withheld $251,514 from the city. At that point, the district planned to pay the city that amount, but also considered paying the city the remaining portion of the original $800,000 stored in the debt fund from the state’s overpayments that occurred more than a decade ago.

However, the $1 million liability fund is protected, and the district cannot simply distribute those funds to the city or state. That leaves the door open for when the remainder of the $1.8 million balance will be repaid.

District Business Manager David Gutenschwager and Supt. Patricia Cole did not respond to messages left seeking comment last week, but have previously said they hope to sit down with state officials and schedule a repayment plan.

(Contact Chris Jackett at cjackett@bewickpublications.com)