Wednesday, February 17, 2010

Michigan Legislature Passes Burden of Raising Revenue Down to Local Communities

Oct. 30th, 2009:

"Those two guys (Dillon and Bishop) got a budget passed," said Bishop's spokesman Matt Marsden. "This was a bipartisan budget. It was voted on by both Republicans and Democrats. It was the best budget that we could come up with that did not rely on tax increases. It's time to move on."

The rest of us are still "moving on" from the fallout of last year's Bishop-Dillon budget, with city leaders across the state now shouldering the burden of having to keep their communities livable and their citizens safe after the Legislature decided to punt on the issue. Joining earlier examples of Troy, Wyoming, Kentwood, Bloomfield Township, and others that we have probably forgotten in the past few months, here are a few more recent examples of Michigan cities that are left to clean up state lawmakers never-ending avoidance of fulfilling their duties to the public.

The city of Grand Rapids, after exhausting just about every avenue they can think of to cut the budget, will ask voters on May 4th for an income tax increase that will go towards recalling laid-off firefighters and police officers, and restore some park maintenance work. An increase in the income tax from 1.3% to 1.5% is expected to raise $7 million, and will sunset in five years. The city commission passed this request on a 6-0 vote.

If city voters approve the increase, commissioners committed to spending some of the $7 million in new money on a downtown fire squad that would serve the entire city and community policing officers for each neighborhood. Commissioners stressed the request was a five-year temporary fix aimed at getting City Hall through a "transformation" process that promises a leaner, more efficient government.

"It gives us a window of opportunity to re-invent ourselves," said 2nd Ward City Commissioner Rosalynn Bliss. "We need to use tax dollars more creatively and we need to find sustainable solutions."

Mayor George Heartwell said the tax increase would be the city's first since 1994 and comes after the city cut more than $100 million in spending over the past decade. Despite sacrifices by city employees, the elimination of hundreds of city jobs, "we are still staring down the gun barrel of a $17 million deficit," Heartwell said.

The local teabaggers are saddling up to oppose, of course, as is the Grand Rapids Chamber of Commerce. Mayor Heartwell called the GR CoC opposition "short-sighted and thoughtless". One might add "hypocritical" as well, for they are yet another business organization who supports a gas tax increase to fix the roads - but suddenly becomes apoplectic about protecting the "taxpayers wallets" when it comes to fire protection and police.

Just to the west of Grand Rapids, the city of Holland is also considering whether to raise taxes to fund public safety. Cuts from revenue sharing are part of the problem.

Councilman Mike Trethewey suggested that if the city raises taxes, now at 13.95 mills, additional revenues go toward public safety services.

Under its charter, Holland could increase its millage more than 3.5 mills without asking for a public vote. However, the council was more open to limiting any increase to 1 mill, which would generate about $1.1 million.

The city is expecting a 10 percent reduction in its tax base during the fiscal year that begins July 1, resulting in a loss of $1.6 million. It also is projecting a $400,000 cut in state revenue sharing, on top of $487,000 lost this year.

There have also been suggestions that they privatize the area's major tourist attraction Windmill Island, which draws thousands of visitors at Tulip Time, but it's doubtful that move would save them money.

Ann Arbor is considering dropping property taxes and replacing them with an income tax, joining 22 other Michigan cities that level a personal income tax. This also would allow them to tax people who work in the city but live elsewhere. Budget cuts have stretched services to the breaking point, with more layoffs predicted.

Already, the city has implemented hiring freezes and asked managers in every department to begin reducing their expenditures to cut a projected 5 percent to 6 percent to balance this year's budget, Fraser said. City officials also have discussed closing the Ann Arbor Senior Center and laying off 14 firefighters.

And one last stop - Flint announced today they are laying off 57 police officers and 23 firefighters, and closing one fire station. The cuts take effect in two weeks. Seems like a huge loss for a city that size.

So, since last year's budget passed, legislators have pushed hundreds of school districts towards insolvency and forced them to make drastic cuts, caused the layoffs of thousands of public safety, city and school personnel, and now are burdening cities and communities with the prospect of having to hold special elections to raise revenue, left to convince their citizens that a fire department really is an important part of quality of life.

Given this stellar track record - since lawmakers have already declared Granholm's fiscally responsible and widely commended budget plan DOA, you just can't wait to see what they come up with this year, can you. The best investment you can probably make at this point is a garden hose that can stretch to the nearest fire hydrant - and pray your city still has water pressure when you need it.