Judgment imposes levy without taxpayer consent

Chairman Gary WoronchakBy GARY WORONCHAK

When a court judgment against a municipality awards money, the municipality has two choices: Pay whomever filed suit directly, or pass it on to taxpayers by levying a special property tax. It’s called a “judgment levy” and is required by law if the municipality doesn’t pay the bill with existing or surplus funds.

Most dramatically, the city of Inkster recently agreed to pay $1.38 million to a man who had been beaten by a police officer during a traffic stop. Inkster doesn’t have that kind of money to pay out, so the judgment will be put on Inkster’s summer tax bills, costing the owner of a home worth $100,000 about $180.

Every taxpayer in Wayne County may face a similarly unexpected and imposed property tax this summer under the same mechanism, the judgment levy.

Whether it is a judgment for payment on a catastrophic accident involving a county vehicle or, as it is in this case, over a required payment not made to the county pension system, the point is, there is a judgment against the county. At issue is whether the county will pay from available funds, or let the bill be paid directly by taxpayers.

At the risk of further diverting from that bottom line, but in order to clarify points that are distracting on this matter, let’s review how we got here. The county did not make a required $32 million payment to the pension system in 2010. The county had limited the bonus check program for retirees, and instead credited $32 million that was already in that fund as the county’s payment.

Rearview mirrors aside, that was during the height of the property value decline that was crippling the county’s finances. That move with the pension system was to avoid 500 layoffs. The county believed it was on firm legal ground and, in fact, the move was upheld initially by the court, but overturned on appeal. In December, the state Supreme Court declared the county owes the pension system $32 million plus lost earnings to be determined by the local court.  On May 29, the Circuit Court entered a judgment that the county owes $49 million.

Wayne County’s dismal fiscal condition is well known, and $49 million is a big bill. However, there is $78 million in a fund that has not yet been allocated, though it had been expected that it would go toward reducing the county’s accumulated budget deficit.

That’s where a majority of the Wayne County Commission disagreed with County Executive Warren Evans. The executive believes that $78 million should be allocated to paying down the county’s deficit. A majority of commissioners voted to move $49 million of that money anyway, believing that money could go to avoiding the judgment levy.

Of course, we realize that would be $49 million less toward the county’s recovery. But the basic right-wrong of this is whether taxpayers should be forced to pay on this summer’s tax bills when there is another way, even if it would keep the county in a financial hole a while longer.

I’m surprised at how some, including in the news media, think this is just something the taxpayers should eat. It was suggested this is the price they pay for poor performance of the people they elect. First, how does that twisty logic apply to those who voted over the years against the previous administration? Then, are we blaming the housing market crash that had a hand in this case on elected officials?

As the legislative branch of county government, the Wayne County Commission is elected to directly represent the taxpayers of their district. For me, that means protecting the taxpayers, and their wallets, if there’s another way to pay the bill.

Letting this money be taken, without permission, from the pockets of residents this summer would not be keeping faith with, or showing respect to, our taxpayers. If we want taxpayers to assist in Wayne County’s financial recovery, to share in the sacrifice, we should ask them. We should convince them that it’s necessary, and we’ve done all we can on our end. It should not be imposed on them.

Proponents of the tax levy point out the big picture, the long-term consequences of using existing money, saying taxpayers will pay more later if they don’t pay it now. I suggest that message be put in each tax bill mailed this summer; shall we guess how much better that will make the owner of a $100,000 house feel when they pay an extra $50 this summer?

Less facetiously, an imposed tax this summer will make it all the more difficult to convince taxpayers down the line to renew the voter-approved taxes that are expiring, or to authorize new ones to be true and willing partners in Wayne County’s recovery.

I understand and respect the county executive’s position on this. None of this is easy. I’m not claiming he’s taking lightly the imposition of a judgment levy on taxpayers. I’m certain he’s not. Nor are commissioners taking lightly the long-term effects on county finances.

However this matter ends up, I remain concerned that the judgment levy could be viewed as a tool for extracting money from taxpayers. If it goes forward now, I fear it will be less difficult to swallow the next time. And the taxpayers who used to believe they had a say in their property tax rates will realize that, under certain circumstances, they do not.

(Gary Woronchak, D-Dearborn, is in his third term as chairman of the 15-member Wayne County Commission. He represents Allen Park and Dearborn.)