LANSING – School districts across the state could expand the use of sinking funds to cover their bus and technology purchases under legislation that cleared the House Tuesday.

HB 4313 passed the chamber on a 74-35 vote after House Republicans challenged that the bill increases the statutory limits on ad valorem property taxes levied for school districts, which would require a three-fourths vote of the House to pass, or 83 votes.

But Rep. Pam Byrnes (D-Chelsea), who was running session at the time, rejected that argument and her parliamentarian ruling stood on appeal, a party-line 66-43 vote with one Democrat absent.

Republicans tried to amend the bill before the final vote, exempting commercial and industrial property from the sinking fund millage, requiring spending from the fund to be posted online, lowering the number of mills that could be assessed and moving the millage election to August and November. But those attempts failed.

House Education Committee chair, Rep. Tim Melton (D-Auburn Hills), said the legislation allows school districts more leeway to make spending decisions with their sinking fund dollars. Many districts currently bond to pay for these purchases, but it will be less expensive to use sinking funds, he argued.

But the lead Republican on that panel, Rep. Phil Pavlov (R-St. Clair), said the legislation would create more of a disparity between school funding because some communities can support more millages while others can’t.

Pavlov added, “How can raising property taxes on declining values be an end to better education?”

Under the bill, school districts can levy up to 5 mills for 10 years for the purpose of purchasing buses and technology. Under current law, sinking funds could only be used to buy real estate and construct or repair existing facilities.

Voters in the school district would decide on millage requests in the May and November elections under the substitute.

About half of the state’s school districts have a sinking fund, but most levy two mills or less and not the full five mills, according to the House Fiscal Agency.

Twelve school districts already at the 5-mill maximum would not be aided by the bill because they can’t go higher than the cap and they couldn’t shift revenue and use it for these new purposes.

As passed out of the House, the bill garnered support from 11 Republicans: Rep. Dick Ball (R-Laingsburg), Rep. Darwin Booher (R-Evart), Rep. Goeff Hansen (R-Hart), Rep. Matt Lori (R-Constantine), Rep. Paul Opsommer (R-DeWitt), Rep. Tom Pearce (R-Rockford), Rep. John Proos (R-St. Joseph), Rep. Tory Rocca (R-Sterling Heights), Rep. Tonya Schuitmaker (R-Lawton), Rep. Paul Scott (R-Grand Blanc) and Rep. Sharon Tyler (R-Niles).

Three Democrats opposed the bill: Rep. Martin Griffin (D-Jackson), Rep. Robert Jones (D-Kalamazoo) and Rep. Jim Slezak (D-Davison). Rep. Shanelle Jackson (D-Detroit) was absent from the vote.

REFUND LOANS: The chamber also passed legislation requiring more disclosure to customers taking out refund anticipation loans during the tax season.

HB 4166 (106-3) and HB 4607 (106-3) would allow consumers the right to return a refund anticipation loan if they changed their mind. The legislation requires tax preparers to disclose that the loan is just that and that if their tax refund from the government doesn’t cover the loan’s cost, including fees, that person is liable.

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