another post on the ypsilanti income tax

71 Comments

1. egpenet
   Posted May 13, 2007 at 12:39 am | Permalink

   Turning up the heat to sweat more soup outta the same pile of rocks doesn’t make sense …

   … in fact, by the looks of the For Sale signs and the growing list of vacant buildings, the pot has fewer rocks this month than last …

   It suprises people when I tell them Ypsilanti meets every target the Governor has established for revitalizing Michigan’s economy … 1) Education … solid local school system AND EMU, 2) Tourism … loads of music and theatrical entertainment locally and on campus, plus more local festivals than any community in Michigan, PLUS a thriving Historic District that many real estate people tell me is “a BIG plus” in this market, 3) An experienced and well-educated manufacturing labor pool, plus a diverse and work-ready pool of younger workers suitable for temporary and full-time service jobs in general business/hospitality/tourism, 4) and we have available to developers and businesses available facilities for both new construction and adaptive re-use … with the majority of the above-mentioned labor pool within 5 to 15 minutes from the heart of the city.

   … soup ready, yet?

   There’s a story to tell here and an audience for that story. What the City needs to do is REMOVE the barriers that exist to entry, NOT put up new impediments.

2. schutzman
   Posted May 13, 2007 at 9:35 am | Permalink

   “I havent made my mind up on the income tax yet,”

   heh. good luck staying on that fence, mark.

   I fully expect to start seeing roving gangs of citizens with torches and pitchforks anytime now, and I don’t think they’ll care much for people who hold ‘nuanced’ opinions.

   egpenet, I don’t see any real ‘barriers to entry’, but rather, a cloud-like aura of complacency that’s been hanging over the city for many years.

3. mark h
   Posted May 13, 2007 at 11:47 pm | Permalink

   I like your idea, Mark, of protesting in Lansing with signs saying “The State is pushing us into Bankruptcy.”

   And I also think it’s a down right shame – but one not unexpected, given the nature of politics in Michigan – that a city like Ypsi cannot tax the incomes of people who work here but live elsewhere without also taxing the incomes of local residents.

4. Ol' E Cross
   Posted May 14, 2007 at 8:38 am | Permalink

   I don’t know how unlikely it is the tax will fail. Ypsi voters overwhelmingly rejected the anti-tax Pierce for pro-tax Mayor Schrieber.

   For most of us, we’re talking about a couple hundred bucks. That in no way would deter my young family from living here.

   Yes, housing values are dropping in A2 but the cheap houses aren’t downtown. I can walk to parks, the river, dinner, drinks and entertainment. A similar walking location in A2 would still be double what I pay here.

   Even without a fiscal crisis, I’d be in favor of the tax. We need revenue from EMU. And, we need our wealthiest residents to pay a fairer proportion. As I’ve said before, there’s folks on the block who have double my income that pay less in taxes because they’ve owned their better homes longer.

   Young families who are just starting out in the job market, shouldn’t be paying more city taxes than folks making six figures.

   If I make a million bucks next year, or if I lose my job tomorrow, I’ll pay the city the same amount I make today. That ain’t right.

5. dan
   Posted May 14, 2007 at 10:21 am | Permalink

   For anyone interested:
   http://www.ypsilanticourier.com/stories/051007/loc_20070510005.shtml

6. Anonymous
   Posted May 14, 2007 at 11:19 am | Permalink

   Hey Ol E,

   I am not too sure where you are getting facts and I would hate to let facts get in the way of a good argument. But here are the election results from the primary 2006

   Schreiber 1041 43.98%
   Pierce 866 36.59% (- 175 votes)
   Richardson 460 19.43%

   Both Pierce and Richardson were very much opposed to the City Income Tax. So, if you were to take last summers vote as a referundum on the City Income Tax.

   For CIT — 1041 (43.98%)
   Opposed CIT — 1326 (56.02%)

   BTW, the City is not going to get revenue form EMU, the City can’t tax EMU, so instead the City is going after the employees at EMU.

   In the City’s zeal to get $700,000 worth of tax from EMU employees to “get” EMU, everyone else is going to pay $3.4 million in new taxes.

   The City Income Tax is expected to raise $4.1 million in new revenue for the city next year. And it keeps going up jumping to $4.5 million in just a couple of years.

   It isn’t the rich people that will get taxed, most can escape the City Income tax by moving their income to other communites or states yet they get a huge bonus from the millage roll back.

   Remember, the rich can’t take their property taxes and deduct them from state and federal taxes. Those deductions are lost as income increases. But the proposed 2 mill or 4 mill roll back is a real bonus for the rich.

   The rich and the absentee landlords are going to love the roll back. They will be able to shelter their income from the City Income Tax and they get a real reduction in proptery taxes.

   Cheers!

   – Steve

7. Ol' E Cross
   Posted May 14, 2007 at 3:55 pm | Permalink

   Steve,

   Richardson received about 43 percent of the vote on her own in the last general election, when CIT wasn’t an issue. She’s got an established base. If you really thought her 20 percent of the vote was voting anti-tax as opposed to pro-Lois, I’m surprised you didn’t run independent in the general election.

   If the CIT is a boon for landlords, why have landlords been its most ardent opponents and among your campaign’s strongest supporters?

   $700,000 is a lot of money. If you’re telling me by my contributing an extra $200 a year in tax, I can be part of a movement to bring and extra $4.1 million to bolster my beloved city’s public services, you’re making the decision all the easier for me.

   For the price of a cup of coffee…

8. Anonymous
   Posted May 14, 2007 at 7:14 pm | Permalink

   Paul Schrieber said on the campaign trail that he was opposed to the property tax roll back. Paul said he was for the 0.8% resident City Income Tax rate with no roll back in property taxes.

   Paul has now flip-flopped on the issue and is now backing the roll back. Remember Paul also said the city was facing a $1.6 million shortfall, that didn’t come true either. There is a budget surplus estimated to be about $600,000 for the coming year. So the Mayor was off by $2.4 million on the revenue side.

   This is all part of the doom and gloom to convince people the only choice is a City Income Tax. This from the same folks that brought you Water Street.

   I can’t convince you to look at the facts and numbers and consider both sides of the argument. For most folks, they have already made up there mind and that is perfectly fair. But if you have made up your mind because of the doom and gloom projections and you are open to learning more, then I welcome the chance to discuss the issue.

   For those that want to learn more about city finance, they should study the budgets, come to the City Council meetings and ask questions of their elected officials.

   The roll back is going to help anyone making more than $80,000 a year. For any high value residents that also own a lot of property in the city or pay high taxes, the property tax roll back is a huge benefit. Also if you are already subject to a city income tax in Lansing or Detroit, the roll back will really help you as well.

   The rich are not going to get hit with this City Income Tax. I said it when I served on the Blue Ribbon Committee and I said it on the campaign trail.

   The rich will not pay the brunt of this income tax, it is the working poor, the middle class, the small business owner, and the union member that is going to get hit the hardest.

   Even EMU employees are not going to pay as big a portion as what the City is estimating. For a number of employees, the simple matter of moving the payroll and other EMU offices outside the city limits will exempt some from any taxes. For many others, reclassifying the employees actual work place to outside the city will avoid the CIT. The City will likely see far less than the expected $700,000 from EMU. Simple things like grading papers at home will exempt that time from the City Income Tax.

   However, Ol’ E and his neighbor will pay more because no matter where you work, inside or outside the city, because Ol’ E is a city resident, you will pay much more in taxes to the city. But the wealthy that live in the city will ultimately pay less with a property tax roll back.

   That $4.1 million in new revenue is going to come from those folks that can least afford the tax.

   Cheers!

   – Steve

9. ingrid
   Posted May 14, 2007 at 8:51 pm | Permalink

   Steve is correct on two points here. The rollback feature in the proposed income tax schemes hurts disproportionately hurts poor people. Also, Schreiber came out against the rollback when he ran for Mayor and for the .8 % resident tax.

   I quote from the Addendum to Final Report to the City of Ypsilanti, Mayor Farmer and City Council From the Blue Ribbon Committee on City Finances July 18, 2005

   Care must be taken to ensure that the proposed income tax does not disadvantage low-income tenants who may not benefit from a property tax millage reduction. A full 44% of Ypsilanti households earn less than $25,000 a year, 24% of households live in poverty, and 21% of individuals live in poverty.1 Moreover, up to 67% of Ypsilanti households rent their homes.2 A roll-back of property taxes in conjunction with an income tax would result in an inequity in which poor individuals in Ypsilanti households pay a greater percentage of their income to the City to maintain city services than wealthier households whose members would benefit from a millage reduction. This feature turns the proposed income tax/rollback into a regressive tax, i.e. a tax that takes a larger percentage from the income of low-income people than from the income of high-income people.

   If you want to see the chart illustrating this point (under Blue Ribbon Committee), its on cityofypsilanti.com. Three members of the Blue Ribbon Committee supported this view.

10. schutzman
    Posted May 14, 2007 at 9:31 pm | Permalink

    If they do go with a tax PLUS millage rollback, then why couldn’t it have some sort of exemption or credit for renting residents, or even better, require landlords to pass the reduced property taxes onto their tenants’ rent?

    Or is there yet another retarded state law that would also prohibit that?

11. Anonymous
    Posted May 15, 2007 at 4:51 am | Permalink

    Hey Brett,

    State law requires any millage reduction must apply to all property owners, not just those that live in the city.

    Same with the income exemption, it cannot exclude those with high income or say for example you can’t exclude those folks that work at EMU but don’t live in the city. The exemption must be equally applied to all taxpayers.

    – Steve

12. Ol' E Cross
    Posted May 15, 2007 at 8:03 am | Permalink

    Sorry Steve. Question was:

    “If the CIT is a boon for landlords, why have landlords been its most ardent opponents and among your campaign’s strongest supporters?”

    Why have Barnes, Maurer, Flo-Mar, etc. all signed the petition to stop it? Why is David Kircher, who’s never been guilty of altruism, handing out your “Stop City Income Tax” stickers?

13. Ol' E Cross
    Posted May 15, 2007 at 8:48 am | Permalink

    Ingrid,

    I want to protect the poor among us, but I don’t want to forget that the poorest benefit the most from public services. Those with means put pools in their backyards.

    In Ypsi, we also have to remember that (according to EMU) 8,000-10,000 students live within a mile of campus, which, like all college towns, skews our data a bit.

    Personally, I’m fine with no rollback. I’m a little worried that those opposed to the tax will play both sides of the fence by opposing a millage reduction as regressive and then opposing a no-reduction plan as too much tax with no relief for homeowners.

    We’ll see.

14. schutzman
    Posted May 15, 2007 at 8:57 am | Permalink

    steve, I understand the millage rollback would apply to all property owners, I was asking why they (we) couldn’t devise a method of also having it apply to renters in the city.

    For example, my wife and i realized for the first time this year that the state taxes have an antiquated exemption called a ‘homestead credit’ that applies to renters, as the state even recognizes that we pay property taxes as a portion of our rent, albeit indirectly.

    my question was if doing something like that in ypsi was actually impossible/illegal for some reason, or is it just too complicated logistically for them to worry about- as it’s obviously not mentioned in any of their plans.

15. brian r
    Posted May 15, 2007 at 9:30 am | Permalink

    Illegal.

    Act 281 of 1967

16. schutzman
    Posted May 15, 2007 at 10:11 am | Permalink

    huh.

    well, in that ponderously obtuse document you linked, there is the part that says:

    “206.117 Property; value, rental rate.

    Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at 8 times the net annual rental rate. Net annual rental rate is the annual rental rate paid by the taxpayer less any annual rental rate received by the taxpayer from subrentals.”

    I guess you could read that a couple ways, some of which would be pretty sweet for us renters. I don’t know though, as I’m not a lawyer.

    However, I’m pretty sure that the city is blowing a couple hundred grand of our budget each year by having lawyers employed on our behalf, so maybe one of them could figure it out, if they’re not too busy with something more important.

17. brian r
    Posted May 15, 2007 at 10:22 am | Permalink

    Ooops.

    Act 284 of 1964

    Still illegal, but this makes more sense. I mistakenly posted a link to the income tax and not city income tax statute.

18. schutzman
    Posted May 15, 2007 at 10:49 am | Permalink

    the only thing better than linking to a long, legalistic document without specifying the important bit is linking to the wrong long, legalistic document in the first place.

    the primary argument of the anti-income tax lobby seems to be that the millage roll-back is unfair, and I personally agree with that part, if renters don’t recieve equivalent compensation, one way or another.

    so, we all appear to sort of agree on something. yay. (hug).

    that having been said, my question is WHY we/they would develop at least four different tax plans and not have some way of making things more equalized be included in at least one of them. Logically, if there’s no legal away around it, then a substantial minimum income exemption needs to be a component, which it is not in any of the plans.

    The basic idea of an income tax is not morally reprehensible to me, but all four ways that they/we seem to be suggesting it would be implemented ARE.

    Let me be the first to say that the anti-tax crowd seems to be picking at the worst parts of some versions of the plan, while in reality they really appear to just be opposed to the entire tax concept generally; At the same time, the god-like management of our city seems to be blundering right into their hands by proposing a cornucopia of deeply flawed plans that absolutely nobody is going to be happy with.

    good job, everybody!

19. Ingrid
    Posted May 15, 2007 at 11:13 am | Permalink

    There are two proposed plans that don’t feature the rollback.
    1. 1% resident, .5% non-resident and $3000 exemption.

    2. .8% resident, .4% non-resident, $1000 exemption.

20. schutzman
    Posted May 15, 2007 at 11:37 am | Permalink

    yes, i saw those, but just assumed that mr. koryzno was trying to be funny.

21. brian r
    Posted May 15, 2007 at 12:08 pm | Permalink

    I apologize for not being more wordy. The question of whether or not the City can develop its own tax code has been asked and answered a lot. Again, I apologize for not being more clear.

    There are four variables the City can control:
    1) tax rate for residents
    2) tax rate for non-residents
    3) exemption level
    4) effective in and out dates (if desired)

    There is no flexibility in the rates. the resident rate cannot be greater than 1%. The non-resident rate can be no more than 0.5% or 1/2 of the resident rate. The exemption must be $600 or greater but not more than the federal level (which I believe is $3300 this year).

    So in the end, I didn’t point out the fancy bit of legal code that said that hoping you would take me at my word when I said what you were proposing was not possible under State law.

22. schutzman
    Posted May 15, 2007 at 12:41 pm | Permalink

    apology accepted, but that still doesn’t really explain the business of millage rollbacks and renters.

    As Ingrid says, the majority (67%) of the citizens rent, so any attempt by the city to “Soften the blow” of an income tax would need to take that into account, but it is not, which is why I admitted that the millage rollback plan is stupid and unfair, as it has been explained to me.

    I would personally say the limit of exemption is ridiculous, when you imagine someone who makes $3001 a year suddenly coming up with $300, but as I suggested above, I fully expected such laws from the same legislature who gave us the headlee amendment and put us in this position in the first place.

    I think the people who want an income tax need to do an infinitely better job of making it fair.

    As of right now, the pro-tax group sounds like a bunch of wealthy property owners trying to cut themselves a break and stick it to the poor people.

    I also think the people opposed to the income tax need to 1) offer some alternatives and 2) failing that, lobby to make the income tax proposed as fair as it can possibly be.

    As of right now, the anti-tax group sounds like a bunch of wealthy property owners trying to cut themselves a break by way of using poor people as an excuse.

    I shall continue to sit on a fence with mark maynard, i guess.

23. trusty getto
    Posted May 15, 2007 at 1:01 pm | Permalink

    “Ypsi voters overwhelmingly rejected the anti-tax Pierce for pro-tax Mayor Schrieber.”

    That’s BS. First, it wasn’t overwhelming. Second, ’twas a primary, and a mostly Democratic one at that. The entire demographic of any tax election will be vastly different, likely drawing voters who haven’t voted for or anything in years. Third, with Paul’s buds running around painting a picture of Steve that involved horns and a tail, I’m suprised he got as many votes as he did. Fourth, when liberal Democrat types finally come around to the fact that this tax disproportionately affects the underprivileged, their sensibilities will never permit them to approve it. You’d pretty much have to toss all sense of equity out the window to approve a tax plan that favors homeowners.

    The real question in my mind is whether the pro-tax lobby has any interest in actually dealing with facts. Your post above, Mark, shows that some of the pro-tax propaganda has already taken hold. When you actually look at the budget, we are years away from “seriously depleted police and fire service” unless our elected councilmembers actively shift priorities away from police and fire, which would be unconscionable.

    I’d be interested in seeing Council put down in writing precisely where all this windfall money will go if voters approve it, and then vote on it — make it law. They ought to draw up a budget showing exactly what parks will be improved, how they will be improved, whether or when the Freighthouse will be re-opened, how many police officers will be hired — you get the idea — and then let people decide whether it’s worth it to pay more taxes. Given my understanding of current spending trends and budget priorities, I have a wee bit of trouble making additional municipal contributions above and beyond those I already make. I don’t trust that additional tax money will actually go where citizens want it most. On the contrary, I believe it will end up in a big crater over by Water Street. Until that nut gets cracked, I’m not likely to support it.

24. trusty getto
    Posted May 15, 2007 at 1:04 pm | Permalink

    And if anyone considers my concerns to be merely hypothetical, see:

    http://www.mlive.com/news/aanews/index.ssf?/base/news-22/1179240032171440.xml&coll=2

25. brian r
    Posted May 15, 2007 at 1:15 pm | Permalink

    The unfortunate thing about the income tax is that writing about it is complicated and boring.

    I’d encourage everyone to attend tonight’s City Council meeting at 7:30PM when we experience the perfect storm as both Water Street and the City Income Tax will be discussed.

    I’d then encourage everyone to join me at The Sidetrack around 11:00PM for happy-hour priced drinks and further discussion with me and my hangers-on.

26. schutzman
    Posted May 15, 2007 at 2:11 pm | Permalink

    trusty getto- I would also disagree with Ol E Cross’s suggestion that it was a landslide, as i think both the primary and regular election was fairly evenly split, with nothing close to a ‘mandate’ being made.

    however, I would also like to point out that Mr. Pierce did in fact ALSO have a couple ‘Buds’ as you call them, painting an alternative picture. I believe it was this behavior that led to ALL of us bloggers being branded “Idiots” by a Mrs. Schreiber, if you recall.

    as for giving the city more money by way of a tax, I agree with you that it would be much more tasteful if we knew precisely 1) where it would go and 2) what other ‘belt tightening’ the city can do in conjunction with it, and 3) what long-range plans they have for overall financial well-being.

    I personally have suggestions for #2 and #3, but nobody’s called me to be on a 20/20 committee yet.

    brian r- I would like to suggest that perhaps the council meetings would be less boring, and more productive, if everyone went to the sidetrack BEFORE they started.

27. Anonymous
    Posted May 15, 2007 at 3:10 pm | Permalink

    Brett, if the exemption is $3,000 and you make $3,001 you only pay the tax on the difference $3,001 – $ 3,000. So you would pay the CIT on the $1. That is why the debate over $600 exemption or $1,000 is sort of stupid.

    The savings in tax you pay as a resident is the difference between $600 and $1,000 is $400 or $4 in City Income Tax.

    If the City doen’t max out the exemption to $3,300 they would be better of not having any exemption.

    A $600 exemption saves you just $6 on your City Income Tax bill. Live outside the city and it only saves you $3.

    That is why a higher exemption can really help especially with dependents. Each dependent gets the exemption. So if the exemption is $3,300, a family of four would exempt $13,200 of their income from the City Income Tax.

    That can really help someone living from paycheck to paychck and making far less than the average income in the City’s example you will see tonight of Joe Average taxpayer.

    – Steve

28. schutzman
    Posted May 15, 2007 at 3:15 pm | Permalink

    my mistake, steve, thanks for clarifying.

    not that, as you say, it makes much of a difference.

29. Ol' E Cross
    Posted May 15, 2007 at 3:17 pm | Permalink

    For the record, welfare, social security recipients, and people on unemployment or disability don’t have to pay the tax. Obviously, neither do the simply unemployed. So they can be removed from the harms-way arguments.

    Yes, highest legal deduction, please.

    Seems like a lot of this comes down to trust. I still trust government to care for the public well-being more than business. I still don’t trust businesses who could have to pay 1 percent of profits (including rental profits and property sales from real estate speculation) when they claim to be lobbying against a tax on behalf of the poor.

    And, I still maintain the mayoral election was a landslide. Schrieber beat Pierce by seven percent and Richardson by nearly 25 percent. Add those together, and he won by a 32 percent margin…

30. Anonymous
    Posted May 15, 2007 at 5:40 pm | Permalink

    Military Income is exempt too.

    BTW, I want to make it clear, the $600 exemption is the minimum exemption required by state law. You can’t have a $0 exemption.

    The point I was making is don’t get sucked into a big debate of $1,000 vs $600 exemption. The difference is only $4 for residents and $2 for non-residents in actual taxes paid to teh city.

    If the goal of the city is maximize tax collections, make the exemption as low as possible.

    Cheers!

    – Steve

31. trusty getto
    Posted May 15, 2007 at 7:43 pm | Permalink

    Anyone can maintain whatever they want, but failing to do the math correctly does not a landslide make. One could just as easily opine that those who voted against Schreiber and in favor of an alternative to him won by a substantial margin as well.

    But then again, I think we all know that spinning the mayoral primary last August into a referendum on an income tax is far too convenient and easy for the pro-tax lobby to pass up. Easy and convenient, however, does not an argument make.

    If the City wants to tax the poorest among us and give exemptions to the well-to-do, so be it. I don’t think it’s likely to pass no matter how it’s put together and no matter how it’s spun. At its core, it’s a bad idea not likely to solve the fiscal problems we face, and no amount of spin is going to change it into a good one.

32. Ol' E Cross
    Posted May 15, 2007 at 11:55 pm | Permalink

    Since my original “overwhelmingly” comment appears to be the primary thing folks are willing to respond to let me clarify beyond math jest. Schrieber won by a decent percentage. (Rightly or wrongly, I assume most hard-core Democrat Richardson voters would’ve of gone Schrieber … I may be wistful.) Ypsi voters tend to pass taxes. Even for roads. I don’t think we can assume the CIT has no chance. The vote was relatively close, but the city didn’t elect the anti-CIT mayor.

    Now, I’m drunk. I’m going to be emotive. Please don’t take this personally. I think I’d like you all if we met. Well, I’ve met Robb, but the rest of you. But spin?!

    For the record, I saw Schrieber at the Corner Brewery once and shook his hand. That is the extent of my connection with anything political in Ypsi. I’m a nobody. I have no connections. I represent no one but me. I’m a resident who reads MM. Speaking of MM…

    Spin? How about a blink after MM mentions CIT Pierce, Robb and Getto crawl out of the blogging woodwork to post talking points regardless of discussion thread?

    (Steve, I didn’t thank you for inserting my name in your 500 word response to nothing anyone said.)

    “If the City wants to tax the poorest among us and give exemptions to the well-to-do.”

    Another nice talking point. Now get specific. How much do we think Schrieber has to gain? Name someone in favor of the CIT who will come out ahead financially. Get specific. I can name a dozen who oppose it who won’t. Can we fairly assume our mayor’s household income is over 100 grand and the tax will cost him? Hell, our city manager works in Ypsi. The tax will cost him. The literal “poorest among us” won’t pay a dime. But, for sake of arguement, let’s say they do. Then lets go for the income tax that has zero millage reduction. How will that benefit your rich? Will you support it? Honest question. Give me an honest answer. Will you support a CIT that has no property tax reduction and, therefore, doesn’t regressively impact the poor?

    If it’s about protecting the poor then let’s do it. I’m serious. Tax me 50 percent. Let’s all get together and lobby around a no property tax reduction CIT that hits us with moderate and above incomes and provides public services to the poor that they can’t get anywhere else in the state. Let’s give our poor pools, parks and transit. Let’s sacrifice our extras so, in one place in the state, the poor can enjoy something approximate to the luxury we do. Let’s tear down our backyard parks and rejoin the public square. Let’s make Ypsi not only the greenest city in Mich, let’s make it the one place where the haves aren’t clenching their purse strings so the haven’ts can’t get in wthout a gun. And, let’s get all your benevolent, rich, anti-CIT campaign funding landlords to promise they won’t raise rent one percent.

    I am not fucking spin. I’m a simple resident who doesn’t love the business interests you’re pretending to not represent as much as I love this odd municipality. And, I’m sick to death of the Libertarian Left. Is there no shelter left from the wasteful-big-government and public-budget-cutting bullshit?

    I seem to recall, last go-round, the CIT would drive away business and new families.

    That didn’t fly. Now the CIT will hurt the poor. Better spin. If only it were true.

    I’m drunk. And emotive. I’m sure you’re all nice fellows. Take my emotion, study it, and formulate into some nice talking points. Next election, I’m sure you’ll reach me.

    Finally, am I really the only one in Ypsi who doesn’t mind chipping in a couple hundred bucks for a well-funded municipality?

33. egpenet
    Posted May 16, 2007 at 9:16 am | Permalink

    Q: Where will the tax money go?

    A: Stand on the bridge where the water flows into Ford Lake, look South, wave good bye to your money.

    It’s already been spent, signed off, sold into bondage, sunk into Water Street, committed to in employe legacy costs. Zip. Wave good bye.

34. mark h
    Posted May 16, 2007 at 10:49 am | Permalink

    Ol’ E Cross –

    As I understand it, the CIT would cost real $ for the city’s working poor – both the residents and the non-residents. Think of the wait staff at the bars & restaurants, and the janitorial and food service staff at EMU and other institutions in town: their incomes will be taxed, right? It’d be a harder hit for them than for EMU professionals like me, and as I understand it, none of the exemptions proposed would exempt them from paying taxes on their incomes. So maybe the very poorest in Ypsi would be untaxed by this, but most poor people have low wage jobs, and they would be liable for the tax.

    Please, if anyone sees a flaw in what i’ve stated here, I’d like to hear the critique.

35. Anonymous
    Posted May 16, 2007 at 11:59 am | Permalink

    Well the new Mayor spoke last night. So did the old Mayor.

    Schreiber proposed the City Income Tax with a 4 mill roll-back and 6 year sunset. They will make the final decsion by the end of the month or the beginning of June.

    The general consensus from those that supported the Income tax, they didn’t really care that renters will pay substantially more in Income Tax to the City than homeowners. IT is homeowners that will save Ypsilanti.

    There was this really wild argument that the larger millage rollback will encourage new home buyers. But then Gawlas went off script and pointed out that everyone pays more taxes under the Schreiber plan, including homeowners.

    What Schreiber could never articulate is how paying more taxes than everyone else in the county will somehow encourage more home ownerhip and attract new young buyers to the City.

    The 4-mill roll-back is an interesting scheme by Paul. To get the property tax passed, Schreiber needs home owners to come out and vote. By increasing the millage roll-back to 4 mills, he hopes that will convince enough voters to vote for the City Income Tax. Remember the Blue ribbon committee said you need 6 or more mills in a roll back to be revenue neutral for residents that already live in the City.

    Paul figures that even though Renters really get screwed in this proposal, they won’t vote in November so they don’t matter.

    He maybe right. Renters don’t normally vote. But the working folks, the union folks, the people living from pay check to pay check, and renters all got a kick in the groin tonight from Schreiber and his supporters.

    So Schreiber made it official, he flipped on his campaign promise of no-millage roll-back and is now backing a millage roll-back that is twice as much as what was recommended by the Blue Ribbon Committee.

    The news on Water Street is even more depressing.

    This whole evening sort of left me wondering. By cranking up the millage roll-back and then add in the incredible ramp up costs for a whole new city tax and revenue department, the actual new revenue coming into the general fund will be between $1.5 million to $2 million.

    Earlier we heard that the City will need between $1.5 and $2 million a year to pay off the Water Street loans and bonds starting in 2010. The city has no developer prospects and is considering selling off some of the Water Street property in hopes of staving off the looming debt crisis.

    We also learned that the city negotiated a bad deal with Visteon/ACH and if ACH asks, the city has to put back the railroad spur with the city paying the full costs. The railroad would run right down Park street right in front of the school and right through Water Street.

    Can you imagine buying your new condo and then a year later, seeing a train come down the middle of your street.

    Is anyone else sort of looking at this and wondering that by the most amazing coincindence the City Income Tax will raise just enough money to build a new tax collections department and make the payments on the Water Street debt.

    I remember EMU saying no student money spent on the President’s House. Then the city saying no general fund money spent on Water Street. Last year over $200,000 in general fund money spent on Water Street. Same again this year.

    Then the City saying “the City Income Tax will only be used to keep vital city services going and to maintain our quality of life.”

    Yet if you watched both the Water Street and then the City Income Tax reports tonight, I think many in the audience had that sinking feeling, the City needs this Income Tax or Water Street is going to bankrupt the city.

    Well there is one other option for Water Street, the head of planning echoed what the City manager said two months ago. Another solution to the Water Street Crisis is to ask for a special millage.

    According to the City finance director the City would need about 3 to 4 mills in a special millage to pay the Water Street debt.

    Hmm, that is by the most amazing coincindence the same millage amount the Mayor is proposing to roll back the millage.

    So they roll back the millage to convince you to vote for the CIT. Then panic will set in at City Hall and they will have to raise the millage to pay for Water Street.

    Despite what the City Attorney is saying, political and governemnt legal experts are saying that to later raise the City Millage, back to the Headlee cap of 19 mills will just take a vote of the Council. It will not require a vote of the people.

    So when the bonds come due in 2009 the city will just tell citizens that they need to raise the millage to pay Water Street. Somehow they will blame the blue meanies in Lansing for the failure of Water Street.

    If they don’t raise the millage to pay for Water Street, the city will threaten to cut cops and fire to pay for Water Street. Either way, we are hosed.

    If the voters approve the City Income Tax and the 4-mill roll back, it will only take four votes on council to undo the millage roll back in order to pay for the Water Street bonds. So if there is no developer by 2009, look for the millage rate to go back up.

    Flip-flop, flip-flop.

    I gotta go,

    – Steve

36. degutails
    Posted May 16, 2007 at 1:35 pm | Permalink

    ol e cross – you’re right. you were drunk. and you’re also right that most of the people involved in this debate (at least the ones i’ve met) are nice people, paul schreiber included. anyone who could raise a son who could write the booty song is not doing too badly, in my opinion.

    but.

    blindly throwing money at a problem generally doesn’t make the problem go away. the objections to the income tax have more to do with a lack of planning, a lack of details up front, than anything else. it sounds sort of unbelievable to anyone who didn’t listen to all of it, but the water street fiasco is as big a fuck-up as it’s portrayed to be. being nice is irrelevant.

    it’s not that i’m opposed to a city income tax, but i am definitely opposed to this city income tax. with no clear plan for using the money and a history of obfuscation, i don’t know why we should do this.

    meredith

37. egpenet
    Posted May 16, 2007 at 4:22 pm | Permalink

    Like I said above, to answer where will the money go …

    Steve giver you all of the math and all of the twists and turns, including the council vote to cancel the 4 mil rollback, when and if needed, and it will be needed, so …

    DO NOT VOTE FOR THE INCOME TAX … VOTE NO

    … or watch your money go down the river and wave goodbye.

38. trusty getto
    Posted May 16, 2007 at 8:17 pm | Permalink

    I’m certainly not opposed to “chipping in a couple hundred bucks for a well-funded municipality.” Trouble is, that’s not what this tax is about. It’s about paying down Water Street debt. Have you seen the bills that will be coming due in just the next few years?

    If this prospective tax money were going to actually fund things we can use, Council would be more than happy to give we lowly citizens an actual budget based on the income tax revenue to be generated, tell us what the benefit actually will be (enhanced parks & recreation, an operating freighthouse, better ordinance enforcement, etc.), and vote on it to make it into law. The only reason for Council to not do that is its own belief that the money won’t actually go where Ypsi citizens want it and instead be used to pay down Water Street debt. If nobody will commit to how it’s going to be spent, I don’t see how it can ask us to commit to making a contribution of even “a couple hundred bucks.”

    As to the poorest among us having to pay, you are correct — those living on benefits won’t. But Mark H hits it on the head: It’s the single moms working three jobs and the students burying themselves in debt while getting an education and working nights that will. They may be a less sympathetic group, but I object to the lack of equity in any rollback proposal nonetheless.

    What commitment will I make? Ole E Cross, If you do want to meet and have a lively discussion of this issue (and no doubt plenty of others), the first round’s on me.

39. Ol' E Cross
    Posted May 17, 2007 at 7:52 am | Permalink

    Um. So where is the money to pay down the water street debt going to come from?

40. Anonymous
    Posted May 17, 2007 at 4:56 pm | Permalink

    Ol’ E wrote:

    Um. So where is the money to pay down the water street debt going to come from?

    Here is what has been proposed so far.

    1. City Income Tax
    2. Raise the Property Tax Millage by 4 to 5 mills (each mill rasies about $500,000)
    3. More praying
    4. Borrow even more money
    5. Buy a Lottery ticket

    Number 1, 2, 3, and 4 have at various times been proposed by City officials.

    I suggested Number 5 a couple of weeks ago on this blog. Because I keep my promises, I bought a $5 lottery ticket when I was in the UP. But it didn’t win.

    I guess the bad Michigan economy and those people in Lansing are to blame for the losing lotto ticket.

    It sure wasn’t my fault, I did everything right.

    Cheers!

    – Steve

41. trusty getto
    Posted May 17, 2007 at 7:18 pm | Permalink

    If the city’s plan is to pay for Water Street by raising taxes, then we may as well lapse into receivership right now. There’s little point throwing money down the toilet to make interest payments only to lapse into receivership in a couple of years having failed to pay down any of the principle.

    It’s obvious that the burden of Water Street is far too great to be carried by citizens. The only options are to sell it, develop it, or lapse into receivership to try and get the debt or a portion of it written off. Merely raising taxes will under no circumstances solve that problem, and the proposed income tax won’t even dent it.

42. trusty getto
    Posted May 17, 2007 at 7:19 pm | Permalink

    Sorry, ’twas s’posed to say “principal.”

43. Ol' E Cross
    Posted May 17, 2007 at 11:51 pm | Permalink

    Anti-CIT friends. Let me apologize for my emotive profanity the other night. Whiskey is a brawler. Tonight, the Piston’s won on CB beer … a natural lover.

    Here’s my frustration. If the issue with the CIT is, say, the millage reduction. Then let’s get together and tell council we’ll all actively support a CIT with no millage reduction. If that’s not the real or primary issue for ya’ll, then let’s get to the root of the matter and engage on that.

    That said, if your solution is the lottery or receivership, then I’d still prefer to buy us some time on the clock with the intentional foul of a CIT.

    If you’re serious that the only actual solution is going into receivership then let’s face up to what that means and make the decisions a receiver would make on our behalf. (Prospect Park would make a nice subdivision.) But, I’m hearing conflicting things from you folks. I’m hearing that the city has “a $600,000 budget surplus” and that “I bought a $5 lottery ticket” to save a city on the verge of receivership. Do we have too much money or too little? Can you see, a bit, where my confusion/skeptism comes from? It doesn’t help that when I ask honest questions, like “If the CIT is a boon for landlords, why have landlords been its most ardent opponents?” I seem to get only blank stares.

    I just want you folks to be straight with me/us. Tell us what the core issue is. Tell us what your alternative solution is.

    Accusations take far less energy than vindications. I can say, “Mark Maynard is a Nazi terrorist” with six words. It’d take MM a lot more words to defend that false accusation.

    I don’t have the energy, or insider trading, to respond to the litany of accusations made. But, I can’t help being suspicious when I read a lot of easy accusations from folks who are offering no hard alternatives. Alternatives, of course, would be subject to scrutiny.

    I’m not trying to be compative. Just honest. Take it for what you will.

44. trusty getto
    Posted May 18, 2007 at 7:14 am | Permalink

    “Then let’s get together and tell council we’ll all actively support a CIT with no millage reduction.”

    The core problem is that an income tax is NOT going to solve our fiscal problems. Even the pro-tax literature admitted that fact during the primary. The lack of equity in a rollback proposal is just a pet peeve of mine. Reasonable minds can differ on that particular peeve.

    Alternative? You can read one above. Actually DO something to a) get Water Street moving and b) get it paying for itself in some way, like generating tax revenue or a sales price to the city.

    I think your optimism that there are all sorts of alternatives conveys a certain misapprehension of the magnitude of the problem that Water Street has created for city finances. I’m for any alternative that actually solves the problem. A CIT does not, and even CIT supporters admit it.

    Since you think I’m not being straight with you, do the analysis yourself. Just run the Water Street numbers yourself. Get the city’s budget, all the Water Street projections, etc. that are floating around and do the calculation of what Water Street will cost if it isn’t up and running within three years. Find out when the next Water Street payments are due, how much is due, and then the next batch of payments, etc. Look at the city’s ever-shrinking ability to balance its budget and ask yourself where that money for Water Street will come from. Add the estimated revenues to the budget, and you will have an understanding of where the city’s focus should be and why a CIT won’t fix what’s broken.

45. egpenet
    Posted May 18, 2007 at 8:25 am | Permalink

    Water Street development … indeed, Downtown, Visteon (ACH), Motor Wheel, The Old Farm Bureau (whatever) on Forest, Barfield on Lowell, the warehouse north of that, the old Peninsula Paper Power Plant (a great restaurant site!), the Old Train Depot and Freighthouse Restoration … plus clean-up and fix-up of our Public Housing, which has languished under several administrations … THESE are the keys. to MAKING MONEY, bringing in the REVENUE the city needs.

    The Thompson Block is slowly but surely on its way …

    Mr. Getto is right. Steve is correct.

    And as I stand on the I-94 bridge over the Huron waving goodbye to my money … swear to god … either I’m getting dizzy or this bridge IS moving and the water is standing still.

46. schutzman
    Posted May 18, 2007 at 9:10 am | Permalink

    Peninsular, eg.

    and i disagree that it would make a nice restaurant site, for several reasons.

    …and, i wonder what you’re suggesting be done with the other locations- they’re all technically abandoned or functionally underused, and I could add a few to your list, but i think it’s a difficult and complicated question to determine how best to develop them and/or the land they sit on, and after watery street and peninsular place, i’m a little hesitant to trust the city’s guidance on the matter, as it would seem you should be to, considering the comments you’ve made about throwing our money away.

47. Ol' E Cross
    Posted May 18, 2007 at 10:11 am | Permalink

    You’re all correct, the CIT won’t fix the problem forever. Nothing will, short of a change in state law. The CIT is a bandage and has always been presented as such. Let’s remember that the blue ribbon tax folks were examining a CIT well before Water Street went to hell. They didn’t come up with it to solve Water Street, but to taper budget shortfalls that promise grow annually.

    But, (re)development is also a bandage. Once we run out of things to redevelop, we run out of the ability, under state law, to increase our income. Look at Dearborn. They completed a huge Water Street style project on Mich. Ave a number of years ago and have been sticking condos wherever they can since. Now, they’re running out of room to grow again and city finances are back in trouble. A redeveloped property gives a nice initial bump, but the taxes earned on redeveloped properties still fail to keep pace with rising expenses.

    Finally, with all the accusations made against council mucking us into Water Street, let’s remember that, initially, most of us thought it was a good idea:

    Here’s a quote from a familiar face (from Ypsi City Council meeting minutes 4/30/02).

    “‘Steve Pierce, I am chairperson of the Downtown Development Authority. I am very enthusiastic about this project’ … Pierce spoke about the traffic on South Street and the surrounding streets, as well as the quality of housing to be developed on the Water Street Project.”

    A few years later, the fellow who enthusiastically supported Biltmore as developer of a residential project on a brownfield site was running for mayor and put on his Web site:

    “…Council is also responsible through their initial promotion of the Water Street project as residential (on a brownfield site!)”

    I won’t say it.

48. degutails
    Posted May 18, 2007 at 11:09 am | Permalink

    the landlord question is a good one, but i don’t think that at this point we’re going to find some hidden loophole or unscrutinized aspect of the income tax that will suddenly answer it.

    my guess is this: rents in the city are really quite high (i rent right now, and came close to moving to ann arbor because rents are lower there, but i love the schools here, so i stayed), and if there’s an income tax here, it might be even less of an incentive to rent here, versus ann arbor or any other neighboring community. and if landlords lose renters, then they’re out of money, no matter what the taxes look like on paper.

    i think that the city’s on the brink of receivership because of the water street bills coming due. the extra money that we have, i.e. we’re not about to lose fire and police services, is enough to keep that going, but doesn’t touch the black hole that is water street. i think it’s like when i don’t have enough money in my bank account to pay a $200 bill, but i have $150. so i’ll eat, but that $200 bill will go unpaid no matter what i do (although if steve would kindly pick up a lotto ticket for me as well as for the city next time, i might be ok).

    people who actually understand these things can pick themselves up off the floor from their dead faints at this time and correct me.

    meredith

49. schutzman
    Posted May 18, 2007 at 11:53 am | Permalink

    degutails/meredith,

    I rent as well, which i think now makes two renters taking place in this discussion.

    As I said above, I’m not morally against an income tax in and of itself- every city I’ve ever lived in previously had one, and we were frankly surprised that ypsi didn’t when we moved here. However, I’m increasingly growing concerned about the whole millage rollback element, as it does seem that ‘our’ interests are being very poorly represented in the discussion, as well as other city issues.

    anyway, to address your point about landlords losing renters due to the income tax, i doubt it will happen based upon renting trends- in fact, from articles i’ve read recently, it sounds likely that many complexes are going to start raising rent (and eliminating move-in specials) as apartments in general (nationwide) are at a very high occupancy rate historically. Thus, especially in an area where there are enough students whose parents are footing the bill, landlords will probably just continue to do what they’re doing, unchecked.

    We need city-mandated rent controls, better rental inspection standards, and better code enforcement. Based on the numbers (67%), i think it’s safe to assume that for every one person in ypsi that thinks their mortgage and/or millage rate is too high, there’s two people who don’t give a damn about any of that and just want a reasonable rent in a safe living environment.

    as Steve pointed out, though, “We” as a collective group don’t vote as regularly as homeowners do. If anyone wants to swing ypsilanti dramatically left of center, I’m confident that all they’d need to do is mobilize the city’s renters.

    easier said than done, though.

50. degutails
    Posted May 18, 2007 at 12:02 pm | Permalink

    schutzman, amen.

    meredith

51. egpenet
    Posted May 18, 2007 at 1:23 pm | Permalink

    We have a bright and solid zoning and planning team in place in the city …

    And there’s much they can do to make the city better prepared.

    The imagination and the creativity is going to come from people who have the resources and ambition to put, for instance, a brew pub into an old factory office complex ….

    Whether the Peninsular Power Plant makes a good restaurant isn’t up to me or you, Bret, we need to look outside the community, I believe, for the entrepreneurs and creative types who can not only “imagineer” but can drive such projects through the necessary channels.

    Adaptive reuse, especially within the Historic District, is the only game. With the other brownfield and empty factories and warehouses … reuse can actually be less expensive. We shall see.

    The new, really new, ideas and the financing is going to come from outside of the city. In my opinion, getting us ready (zoning, land use, all that) to accept the best of those ideas is our first task at this point. A simultaneous task is reaching out for those ideas.

52. schutzman
    Posted May 18, 2007 at 2:13 pm | Permalink

    egpenet, i disagree, respectfully, that we need to look outside the community.

    all the ideas are here, as is the money.

    the people with ideas aren’t being listened to, and the people with money aren’t reinvesting it in their community.

    if you think the power plant’s future should be determined by someone from outside the community, then that’s exactly what we already did with the paper mill itself, right across the river, which some people (besides myself) are beginning to agree was a foolish move.

    believe me, i’m all about adaptive reuse, and i’m just as interested as you are in seeing that happen. If it’s done poorly, though, or if the interest of the community isn’t taken into account, or if the profits all go outside of ypsilanti, then to me that completely defeats the purpose, and it’s better to just mothball structures until something better comes along.

    as for your comment about the “solid zoning and planning team”:

    apartment dwellers i’ve talked to don’t feel terribly safe here, because of the various fires we’ve seen in recent years, and the obvious transgressions of local landlords, and the absentee nature of other landlords. Stricter codes, or better enforcement, would make us feel safer.

    as for the planning department, well, if you’re saying we need outsiders to plan what ypsi will become, then i don’t understand why you’re saying they’re so great. I think planning is required, and they’re the official arm of that, and as such it seems contrary for you to extoll their virtues yet want them superseded by someone else.

53. Hillary
    Posted May 18, 2007 at 2:33 pm | Permalink

    schutzman: The emphasis on homeowners, placing them above both renters and commerce, is probably the single most harmful policy the city has. In a healthy city when the rents are high, the very worst of the student rentals are replaced by new apartment buildings, and historic houses worth saving are moved out of the way. Ypsilanti has done the opposite by declaring the largest historic district in the state and downzoning large areas of the city in the name of home ownership. (Rent controls also discourage investment in apartments, which is bad for everyone involved.)

    trusty: The time to consider the burden of Water Street was before the eminent domain takings. Receivership won’t get rid of the debt. The citizens will have to pay for Water Street by tax judgment. (I don’t understand why the city didn’t shield itself from liability with an EDC.) The ONLY option is to sell it, and that is the first thing emergency financial management is going to do, along with selling the freight house and every other asset the city owns. The citizens can either vote to raise their taxes and accept what is commercially viable on that site, or the state will do it for them.

    Ol’ E Cross: Redeveloped properties often have tax certificates that give away the benefit. One of the early concerns raised by Steve Pierce was that the actual taxes collected would not be enough to pay for the additional burden on city services. Don’t trust anything from the administration. Go to the meetings.

54. egpenet
    Posted May 18, 2007 at 9:07 pm | Permalink

    The above comments by this particular Hillary are correct. The comments by any other person named Hillary should be disregarded.

    Gore-Obama in 2008.

55. trusty getto
    Posted May 19, 2007 at 9:13 am | Permalink

    Hillary’s absolutly correct on when this should have been analyzed, and what the consequences of not solving Water Street will be.

    That said, I’m increasingly getting the idea that very few understand the magnitude of the problem. The situation we are in is akin to purchasing a very expensive home on a 100% mortgage and then losing your job the day after closing with no prospects of employment in the foreseeable future. To make matters worse, it appraised too high, and there’s no way to sell it for what you paid. You can certainly get a lower paying job, but you aren’t going to pay down that debt and hang on to it unless you pull a rabbit out of a hat that alleviates the problem.

    A CIT is little more than a “lower paying job” per above. It won’t solve the problem, just cost residents more. It’s no rabbit. Seems to me that it’s extraordinarily fiscally irresponsible to ask for a tax BEFORE we have a clue about where Water Street is going.

56. Hillary
    Posted May 19, 2007 at 11:50 am | Permalink

    “That said, I’m increasingly getting the idea that very few understand the magnitude of the problem.”

    You couldn’t be more right about that. I sent Mark an e-mail 5 months ago to the same effect.
    http://markmaynard.com/index.php/2006/12/11/for_what_it_s_worth_advice_from_hamtramc

    I agree that an income tax isn’t going to solve the problem. Ypsilanti is probably better off taking a tax judgment on the existing property taxes rather than instituting a new tax with software and administration costs.

57. schutzman
    Posted May 19, 2007 at 11:54 am | Permalink

    Hillary, I really just meant “rent controls” as the best option to giving us a piece of the millage rollback pie, and I would only ask that they be set at a fair level- say that of an average apartment in Hamtramck, for a completely random example. Also, I don’t think there’s a big problem with attracting investment in apartment buildings here, based on the occupancy rates, percentage of citizens renting, and outlook for the economy which, i think, will see less home ownership in the future.

    Otherwise, I agree with your comments; And, as he seems to now be ignoring mine, let me say it’s rather odd for someone on our HDC to agree with your statement that the Historic District is too large.

    I think the rezoning of occupancy that you mention, though, has been more damaging than the historic designation, which in itself is pretty harmless.

58. Hillary
    Posted May 19, 2007 at 1:25 pm | Permalink

    The average apartment in Hamtramck costs far less to maintain than an apartment in Ypsilanti. Setting rent at a rate lower than the cost of maintaining the buildings would have predictable results. Investors would certainly build more apartment buildings in Ypsilanti if they were allowed, which is a more appropriate way to lower rents. The rezoning has only been more damaging because it prevents apartment buildings before they even get to the HDC.

59. schutzman
    Posted May 19, 2007 at 1:47 pm | Permalink

    But, as I said recently, the most recent investor to build apartments in ypsilanti is charging more than nearly anyone else in the city, and they’re obviously not funneling much of the money into maintenance, and on top of that, the new owners are going to raise the rent just because they can, basically.

    so, while i agree in theory with your logic, i see some very illogical decisions being made here (or, technically, in Texas) nonetheless, which go against it.

60. Hillary
    Posted May 19, 2007 at 4:07 pm | Permalink

    The decisions are absolutely logical when viewed in the context of a housing shortage. The apartments built recently are a fraction of the number needed. Rents will continue to rise until the supply meets demand. When apartments go unrented, that is when the price will come down.

    The new apartments are some of the most desirable, given that many of the other rentals in town should be condemned.

61. schutzman
    Posted May 19, 2007 at 4:15 pm | Permalink

    I think that could happen, but not for a long while. In the meantime, just like the case with inflated costs of houses and buildings, I think many people will give up on ypsilanti as a decent place to live, whether they’re renting or buying.

62. Ol' E Cross
    Posted May 19, 2007 at 11:04 pm | Permalink

    Hillary (or egpenet),

    Can you explain what you mean by:

    “The citizens will have to pay for Water Street by tax judgment”?

    signed,

    Clueless in Ypsilanti

63. Hillary
    Posted May 20, 2007 at 12:29 am | Permalink

    Does this explain it?

    http://law.honigman.com/db30/cgi-bin/pubs/WeissA406284.pdf

64. Steve Pierce
    Posted May 20, 2007 at 6:53 am | Permalink

    Penn place got approval from the City to do things no other apartment owner can do. They are allowed to rent each room under a separate lease agreement, no other apartment owner is allowed to do that in the City.

    If I own a three bedroom unit, I can only have one rental agreement. Three people can sign the agreement, but if one moves out, the other two are responsible for the third room. As the owner I can’t just stick a third person in the apartment.

    At Penn Place, each bedroom has a separate agreement. Which means that Penn can put a third person in an apartment that the other two people don’t know and may not even like. So Penn gets to operate more like a Dorm than a true Apartment.

    Penn also got special approval for less parking so they can cram more people in without worry of violating City ordinance. Many other apartment owners have extra bedrooms but zoning prevents them from leasing them because they don’t have the required number of off street parking. Numerous apartment owners have asked for a variance to allow them to rent those extra bedrooms and the City denies the request every time.

    Finally, the new owners said in a real estate journal they are planning to raise rates. The reality is in this market, you may plan to raise rates, but when it gets close to the new school year and you still have vacancies, the deals start to roll.

    Penn seems to charge more because they are providing furnished apartments. When compared with other furnished apartments in the area, they are priced the same.

    So they really aren’t more expensive, but they have a competitive advantage of renting by the room that the City won’t allow anyone else to do and they were allowed by the city to have inadequate parking.

    Most apartment owners can compete with Penn if they are allowed to operate under the same rules. However, the City gave Penn special favors that gives them an unfair advantage in the marketplace.

    Hey that is life and that is business. I am not asking for those rules to be changed, but I think people should understand that A) they aren’t more expensive than other similar units in the area, and b) because of those special favors granted by the city, the City blasted a hole in the rest of the market that has driven up the vacancy rate every where else.

    = Steve

65. Steve Pierce
    Posted May 20, 2007 at 7:48 am | Permalink

    Hillary’s quote is very good.

    http://law.honigman.com/db30/cgi-bin/pubs/WeissA406284.pdf

    In the case American Axle v Hammtrack, it outlines the steps necessary for the city to levy additional taxes without voter approval.

    In the last two months, the Ypsilanti City Manager and City Planner at two different public meetings said that one way to pay the Water Street Debt is to ask the voters for a special 4 to 5 mill increase. But what if the voters won’t approve a millage increase.

    American Axle shows a way to get the millage increase without voter approval.

    American Axle says that if the city has a judgment, the City can simply levy the additional taxes against the citizens, without voter approval, to pay the judgment.

    One way for the city to quickly get a judgment against itself is to default on the loans. The loan and bond holders would immediately get a judgment against the City. Heck the city could fast track the thing by not even opposing any motion or worse even helping the bond holders file suit by explaining the process and telling them why the judgment is needed.

    Once there is a judgment against the city, that would be all that is needed for the City to then levy the additional millage without a vote of the people. (sigh)

    The more we wade out into the mess called Water Street, the more people are going to get mad at our former mayor and council for getting us mixed up in this mess to begin with. Good people with lots of experience warned the mayor and council about these very problems and they were dismissed by the Mayor and Council.

    One City Council member, who has since quit, refused to even meet with neighbors in 2003 about Water Street telling citizens, it was too late, there wasn’t any point in discussing it. That was 2003 folks and Council was already burying their heads in the sand.

    Two developers and four years later, they said this at Council last week about Water Street, “We (the City) need to hold out for the best solution.”

    The best solution in there minds is the taxpayers give the mayor and council an extra $4.1 million in new yearly tax revenue from the City Income Tax and then go away and don’t ask any questions because they know what is best for us.

    We trusted them with Water Street and look what a mess it has become. Can you really trust them with another $4.1 million of your money? They sure haven’t been good stewards of what we already gave them.

    – Steve

66. Hillary
    Posted May 20, 2007 at 11:58 am | Permalink

    To elaborate, tax judgments have been SOP in Hamtramck since the decision I linked to. In another lawsuit, the retirees sued for certain (complicated) benefits and won. The city refused to pay, the retirees won a tax judgment, and the citizens were assessed 49 mills over 3 1/2 years for a total of $8.25 million. The judgment was supposed to be finished last year, but when it came time to pay the retirees their regular payment, the city refused. The retirees got an additional tax judgment for almost 2 mills. I expect this pattern to continue until the original judgment is fulfilled, when the last of the plaintiffs dies.

    In American Axle vs. City of Hamtramck, the city signed a development agreement with Freezer Services for the site of a paint factory. The city was responsible for demolition and told Freezer Services the land would be environmentally safe for their use based on soil tests by a company that was not bonded. The city also hired an unbonded contractor to demolish the building on that site who used the area as a dumping ground. Freezer services sued when they found the land was contaminated, and the city eventually settled with them for $3 million. That’s when the city levied the additional 30 mills. American Axle fought it and won twice, but the Michigan Supreme Court ruled that the tax was legal.

67. egpenet
    Posted May 20, 2007 at 12:01 pm | Permalink

    I will continue to post, dear neighbors, that it is not the end of the world. But each and everyone of us … whether yo’re on a 20/20 commission or not … needs to turn off your TV and get active in your Neighborhood Association and start getting active in local politics. You can start by voting, keeping a closer tab on what’s happening in our schools and with our school boards, at city council and working with the new D.A.Y. (Downtown Association of Ypsilanti) to restock the downtown with the stores and necessaities wee need to live a better life.

    We have let all of this happen and now it’s time we got back into the thick of it. Stop complaining and get to work. Ypsilanti is OUR town. Let’s take it back.

68. Ol' E Cross
    Posted May 20, 2007 at 9:42 pm | Permalink

    Hillary/Steve,

    Thanks for the explanation of tax judgements. I had no idea that was an “option.”

69. JL
    Posted June 9, 2007 at 1:35 pm | Permalink

    “If it’s about protecting the poor then let’s do it. I’m serious. Tax me 50 percent. Let’s all get together and lobby around a no property tax reduction CIT that hits us with moderate and above incomes and provides public services to the poor that they can’t get anywhere else in the state. Let’s give our poor pools, parks and transit. Let’s sacrifice our extras so, in one place in the state, the poor can enjoy something approximate to the luxury we do.”

    If we do that, what exactly is the motivation for the poor to work at all?

    Didn’t this approach fail already in Eastern Europe, China, etc.?

    And by the way, last time I checked, the poor already had parks, transit, and (I believe) even pools.

    Finally, if you give the poor here more services than anywhere else in the state, you’ll likely attract a lot more poor people.

70. egpenet
    Posted June 9, 2007 at 2:29 pm | Permalink

    The economic system we have now is a substitute for keeping the slaves where they belong. When Reconstruction “failed,” folks said … “See!?” Since then the Republicans took back the South and let the Democrats wallow in the big cities … and after the factories failed up North … here we go agin. Very, very rich … no middle class … very, very poor.

    What’s working in China now is construction labor at 40 cents an hour. But you can live ion that for a while. And they’re building entire cities from scratch with jobs for all.

    Lock and load, citizens.

71. JL
    Posted November 2, 2007 at 6:26 pm | Permalink

    “The economic system we have now is a substitute for keeping the slaves where they belong. When Reconstruction “failed,” folks said … “See!?” Since then the Republicans took back the South and let the Democrats wallow in the big cities … and after the factories failed up North … here we go agin. Very, very rich … no middle class … very, very poor.

    What’s working in China now is construction labor at 40 cents an hour. But you can live ion that for a while. And they’re building entire cities from scratch with jobs for all.

    Lock and load, citizens.”

    *lol*

    Gotta love university towns.