LANSING, Mich. – Vestaburg Community Schools won a round in its battle to put a bond issue before the voters, according to a report in the Greenville Daily News.

A circuit court judge has ordered the Michigan Department of Treasury to prequalify the district’s bonds so that it could place the $9 million request on the May 5 ballot, the Daily News reported. Prequalification is required by law, according to the article.

District voters will be asked to extend an existing building and site millage by 18 years, with a new expiration date of 2044; the money would be used for safety and energy efficiency upgrades to two buildings, according to the Daily News.

The judge ruled that the state’s refusal to grant Vestaburg schools access to a state-guaranteed, low-interest loan program was unconstitutional and denied the district “equal opportunity,” the Daily News reported. The district had alleged that the state arbitrarily changed the way in which it applied the prequalification statutes.

 In a separate report, treasury department spokesman Terry Stanton told the Michigan Information & Research Service Inc. that the department is reviewing its options. The department refused to prequalify the loan based on the district’s borrowing history, MIRS reported. State law requires districts to pay off prior borrowings before borrowing again, but in Vestaburg’s case it had repaid a state loan with a third-party loan, and the original debt was not yet paid in full, the report said.

The Greenville Daily News, “Vestaburg wins millage lawsuit,” March 25, 2009

Michigan Information & Research Service Inc., “School beats Treasury in court on bonding flap,” March 26, 2009
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Michigan Education Report, “School property taxes could increase $5.5 billion over 10 years,” Sept. 8, 2002