Judge throws out tax case against DPS- Adverse ruling could have cost DPS $80 million

Thursday, June 22, 2006

Wayne County Circuit Court Judge Isidore Torres yesterday dismissed a case against the Detroit Public Schools stemming from claims that the District illegally collected taxes from businesses over a three-year period.

Last July, the District learned that its authority to levy 18 mills for school operating purposes on non-homestead property had expired three years earlier, under the previous administration. The District immediately went public with this fact, disclosing it to the State Treasurer’s office and to various financial institutions and investors and the public at large.

Several businesses sued the District in Wayne County Circuit Court and the Michigan Tax Tribunal. Judge Torres had previously ruled that claims for three tax years were not filed in a timely manner by the plaintiffs. The judge dismissed the claims for those years, but held open the claims for the 2004 tax year. With his ruling on Wednesday, Judge Torres dismissed claims for that year as well.

In addition to finding plaintiffs’ claims were untimely filed, Judge Torres’ ruling recognizes that the District had the right to collect the tax without returning to the voters for authorization

This latest ruling is great news for the District. An adverse ruling in this case could potentially have cost the District approximately $80 million.

About the Detroit Public Schools

The Detroit Public Schools, founded in 1842, is one of the nation’s largest public school systems. Detroit Public Schools is a school district of choice and is open to children who live outside the city. The District offers numerous competitive academic and career technical programs.

Among these world-class programs are the Foreign Language Immersion and Cultural School, Michigan’s only public school of its kind; Davis Aerospace, one of few college prep high schools in the country where students can obtain a pilot’s license; the Detroit School of the Arts, a multiple award winning performing arts high school; and Crockett Technical High School, a digital technology high school. For more information about the District, visit our website at www.detroitk12.org.