What Are We Doing?
Opposing the hostile takeover of Liberty Apple Valley
By Ron Fonger, JOURNAL STAFF WRITER
Flint likely owes the state of Michigan millions of dollars in industrial facility taxes that haven’t been paid since 1996, a state treasury official said. It’s the latest bombshell to land in the city’s troubled Finance Department and comes on the heels of a Flint Journal report earlier this month that the city may have made more than $1 million in incorrect property tax payments to local entities, such as the Flint School District.
Budget Director Matthew Grady said the industrial facility tax payments — money collected from companies granted tax abatements — have remained unspent in a city account. Thus, Flint
shouldn’t have to approve dollars out of the general fund to pay off the debt, Grady said.
Industrial facility taxes are paid by companies in place of property taxes, said Mark Hilpert, director of the state Department of Treasury’s Bureau of Local Government.
Flint and the state granted 50 separate abatements still in effect in the city, but state officials said none of the industrial facility taxes from those abatements has been forwarded to the state.
We know they owe. We just don’t know how much yet, said Hilpert, who estimated the three-year total is likely millions of dollars.
The examination of Flint’s payments is part of a statewide review by the treasury department over cities’ track records in paying the taxes.
Grady confirmed Monday,
The information coming from the state is correct, but he said the city has no final estimate of how much the state is due.
The state’s claim against Flint is part of a wider tax distribution probe local auditors continue to investigate.
Earlier this month, auditors and Flint officials said the city misdirected some property taxes for several years, making more than $1 million in incorrect payments to local units.
Part of the tax distribution problems also involved the city’s collection of the industrial facility taxes.
Grady said it could be June before a final accounting shows which entities are due money and which were overpaid.
The budget director, who is also serving as interim finance director, said he wants to have a final accounting of the tax distribution problems before presenting a plan to the affected entities.
This stems back a couple of years ago, said Grady.
It hasn’t been done. It should have been done.
City Administrator David Ready said former Finance Director Marc Puckett disagreed with state officials on how much the city owed the state for industrial and commercial facilities taxes in the past.
In 1996, auditors from Dupuis & Ryden determined the city had not paid $12 million in the taxes for four fiscal years. That payment was later made.
Marc was of the impression we had overpaid them (or had the potential to overpay them), Ready said.
That threw a monkey wrench into the works.
Grady replaced Puckett, who resigned in the midst of an investigation over the failure to transfer employee and employer pension contributions to the proper account.
Flint Mayor Woodrow Stanley was forced to order the transfer of nearly $1 million in taxpayer funds to the Flint pension system to make up for uncollected interest that the pension system lost because of the city’s failure to make proper transfers.
The city’s Finance Department was responsible for both the pension transfers and the property tax distribution, city officials have said.
Since Puckett’s resignation, Stanley has ordered
a comprehensive review of practices in … Marc’s department.
City Council President Scott Kincaid, a declared candidate for mayor, said Monday that he will withhold comment until an audit by the auditing firm Dupuis & Ryden is complete.
Kincaid said he believes $2 million to $4 million may have been distributed incorrectly by the city since the 1996 tax roll.
Copyright Flint Journal / MLive Media Group (mlive.com). Used with permission.