conan smith on the ypsilanti income tax

Washtenaw County Commissioner and Executive Director of the Michigan Suburbs Alliance, Conan Smith, shared his thoughts today on the impending Ypsilanti City Income Tax. Here’s a clip:

…The City of Ypsilanti will have an income tax proposal on its ballot this fall. Nobody is enthusiastic about increasing taxes in the city (already their property tax burden is the highest in the county), but the city’s basic services are failing under the weight of Michigan’s insufficient municipal finance system. City officials who offered up the income tax option are faced with an unconscionable choice: ask cash-strapped residents to dig a little deeper, or put critical services on the chopping block, including public safety and community health.

No city should need to pose this question. Especially when neither solution is sufficient or permanent.

The budget crisis that state lawmakers recently resolved showcased a lack of leadership and a failure of the governing process that our leaders have got to overcome . . . and soon. A little-noted part of their compromise was to extend the sunset on our revenue sharing law. Like they’ve done all year (and like legislatures before them), they delayed dealing with an issue that defines the quality of life in Michigan. As more cities falter in Michigan’s weak economy — without a set of tools that might allow them to build their own futures — the finger will increasingly be pointed at the State. And rightfully so.

The municipal finance problem is well-documented. The solutions — ranging from technical fixes to whole new tax structures — have been clearly articulated by city leaders. The disaster of municipal insolvency has been dodged repeatedly by savvy managers, but they’re running out of room to run. If citizens feeling overburdened by this economy won’t take responsibility for their cities, Michigan’s emergency financial management law will take effect.

Then Lansing leaders will find themselves with the responsibility of managing not only the state’s business, but the business of local government as well.

That prospect should frighten residents, city officials, and state lawmakers alike.

Of course, he doesn’t come right out and say whether or not he supports the tax. My guess, and I very well could be wrong (I’m sure he’ll let me know if I am), is that he’s in the “vote no” camp. The sense I get is that he’d rather we not draw out the suffering, but, instead, get right to the business of failure. I’m not suggesting that he would take any joy in this, but I do think that he would see a silver lining in the collapse of Ypsilanti as it would help him illustrate the severity of the problem, and perhaps lead to changes in Lansing that could help other cities that, like ours, are teetering on the edge of failure.

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12 Comments

  1. egpenet
    Posted October 12, 2007 at 1:21 am | Permalink

    I’m with Brian. Let’s bite this one NOW. Line by line … council meeting by council meeting.

    For example, AATA is an independent business … why is Ypsi guaranteeing services? We supply passengers from our area, passengers pay the freight … or not.

    AATA is one. There are dozens of examples of governnment (city, county, state, federal) and “entitlements” we have grown accustomed to that have grown WAY out of proportion. This has been going on since Roosevelt!

    And now what does Grandholm do? She raises taxes! At a time when we need the city, the state and the federal governments to CUT taxes and spending by getting rid of Prop A and Headley and going to a uniform system for state financing. She RAISES taxes! Holy Huron! We’re trying to reduce government and she’s expanding the intrusion!

    Screw ALL entitlements! Speaking of addictions … folks in Michigan, as well as in the USA have got to stop government in its tracks and say NO to the non-essential freebies.

    Look at economic history of the U.S. I mean, study the facts and see what economic history has to say about government getting too big and making stupid decisions about OUR money!

    Government has become the public breast from which we all have become addicted. This began with Coolidge and Hoover and has continued through Rooselvelt, Truman, Eisenhauer, Kennedy, Nixon, Johnson, etc.

    Government gets bigger … the Fed goes along and finances more debt and inflation … and we all get giddy about how our homes are worth more. Greenspan is the latest goofy champion, and now Bernacki wants to get into the hero’s chair, so he’s inflating and the dollar is going further into the toilet!

    Greenspan is an IDIOT! And Bernacki is nuts. He will inflate (it’s an election cycle thing) until it kills us! And it kills trade with the rest of the world.

    We have lost value in our currency, value in our homes, our incomes (those who ahve incomes), or our jobs have been eliminated. The Loonie is the local winner (Canadian Dollar is worth more than a US Dollar for the first time in a century or ever)!

    What we need is a solid, but bare bones, functioning government in Ypsilanti, that provides high standard fire and police protection … up to code building inspection and Historic Building enforcement … clean streets … and the lights on at city hall during business hours. Dump the rest.

    Dump public housing. Those PHC commission membwers are virtually stealing from their own folks! It is absolutely disgraceful! It is the most blatant use of government power to hurt people I have ever witnessed. The other side of that issue is that we have created that NEED by getting people addicted to the public feeding trough.

    The County offices … saying they help folks … have also CREATED the need by masking State and County payments too accessible. The Welfare State has grown to the point that welfare employees appear to outnumber the recipents! We have built a monster beaurocracy. Let’s DUMP IT!

    Bottom line for us in Ypsi … let’s look at the City budget dollar by dollar and say … yea … or nay. Line by line.

    First step is the income tax … and I vote NAY. From there, let’s unwind the last few years’ commitments … let’s, if we can, renegotiate with the unions, our banks, our other creditors and say … one year at a time. Beyond that … we’re bankrupt … sue us.

    For other employees, it’s as Nebucanezar said: “Folks, the handwriting is on the wall.”

    Let’s NOT say … we’ll bump taxes (on top of Jennifer’s significant bump) for three or five years … and end up hanging ourselves in Water Works Park in 2013!

    Let’s get the job done.

  2. visitor
    Posted October 12, 2007 at 7:14 am | Permalink

    Actually he is not saying vote no. He is advocating for a restructing of municipal financing at the state level. You do not want to go into recievership, that cannot be stressed enough. Let it be another city who’s collapse wakes up lawmakers. Letting Ypsi go down the drain to set an example for state lawmakers is a stupid idea, almost as stupid as thinking that even talk on an income tax in Ypsi has cause housing prices to “go through the floor boards”, I mean how do you expect anybody to take you seriously with non-sense like that. Its the MICHIGAN economy stupid.

  3. Dirtgrain
    Posted October 12, 2007 at 8:29 am | Permalink

    It’s the idiot city council first and foremost. Then it’s the economy.

  4. Sacred Cow
    Posted October 12, 2007 at 12:29 pm | Permalink

    I don’t doubt that many in the state would stand by and watch Ypsi’s collapse while smiling that it wasn’t their community, and hoping it wakes people up in Lansing.

    What I can’t understand, however, is why some Ypsi residents themselves seem hell-bent on watching our services deteriorate to the point of embarassment. If the choice for a persepctive resident is either a community that has a higher tax rate, or a community with such poor services that they question their safety, not a single one will choose the unsafe community to save marginally on their tax bill.

    I understand outsiders encouraging us to be the sacrificial lamb for the rest of the state, but how our own residents could act the same way is truly depressing. I will not support our city sinking, just for the potential benefit of the rest of the state down the road.

  5. Glen S.
    Posted October 12, 2007 at 1:25 pm | Permalink

    Pontiac has been much in the news lately as an example of a city facing a budget disaster. Despite several rounds of severe personnel (and service) cuts, receivership and/or a state takeover still look likely.

    However, there is a crucial difference between the situations in Pontiac and Ypsilanti:

    Pontiac now finds itself in dire straits because of poor management. Leaders in Pontiac either failed to adequately estimate future revenue and expenses, or lacked the political will necessary to make cuts and/or raise revenues. As a consequence, their mounting budget gap came as a “surprise,” and now, only state intervention may be able to fix the problem.

    Despite what some would have you believe, Ypsilanti is actually well-managed. While our revenues have been shrinking for years, City Council has been anticipating falling revenues and making the cuts necessary to ensure a balanced budget. Consequently, we are NOT under threat of receivership, and we will NOT require state intervention.

    However, because we have been cutting for so long (since at least the late 90’s), we are long past the point of cutting “fat” from the city budget. In fact, soem of the cuts we are now contemplating threaten to seriously damage our community’s health, safety, and long-term viability. In an attempt to prevent the worst impacts of these cuts, City Council has put before the voters a proposal for a temporary city income tax.

    Again, however, unlike Pontiac we do not face an immediate financial “crisis.” No state auditor is coming to Ypsilanti to tell us how pay our bills, and no state official is coming to tell us how to run our city. In fact, because city leaders have acted responsibly by anticipating future revenues and expenses, we have the opportunity to make a CHOICE about how we want to proceed before we reach a “crisis.”

    That choice is either, as Sacred Cow points out, to let our city services deteriorate to the point of embarassement; or to adopt a temporary city income tax preserves essential services while we continue working to revitalize Ypsilanti and waiting for Michigan’s economy to improve.

  6. visitor
    Posted October 12, 2007 at 6:55 pm | Permalink

    Ann Arbor News…
    “A Washtenaw County judge denied an injunction Friday seeking to halt the November vote on a proposed city income tax in Ypsilanti.

    But at the next hearing scheduled Nov. 2 – four days before the Nov. 6 election – Washtenaw Circuit Judge Timothy P. Connors could stop the vote, amend the ballot language, take other action or no action at all, attorneys for both sides said Friday.

    The plaintiffs, which include the local Stop City Income Tax Committee and several current and former Ypsilanti officials, want Connors to declare the ballot proposal invalid.

    The injunction was denied in court verbally and in a short written statement. Cameron Getto, the attorney for the plaintiffs, said he filed the injunction last week to bring the issue before a judge as quickly as possible.

    “The court’s view is that this all could be done later,” Getto said.

    The injunction was denied because it wasn’t proven that the ballot and its language would cause “irreparable harm,” Getto said.

    Getto and City Attorney John Barr said the Nov. 2 hearing is the result of motions filed by both sides, and Connors will make a ruling on the merits of both arguments. If Connors declines to rule and voters reject the income tax Nov. 6, the suit will likely be dropped, Getto said.

    In a lawsuit filed in September, the plaintiffs charge that the income tax language is biased, misleading and violates state election law. The city maintains the ballot and its language are acceptable, was approved by Barr and should be put to a vote, Mayor Paul Schreiber said.

    “I’m glad that as of this time the election is going forward,” Schreiber said.

    The proposal asks residents to vote on a 1 percent income tax on Ypsilanti residents and businesses, and a 0.5 percent tax on non-residents who work in the city. The proposal includes several exemptions, and a clause that the city property tax rate will be reduced by 2 mills if the tax is approved.

    The tax would become effective July 1, 2008, and expire July 1, 2014.”

  7. egpenet
    Posted October 12, 2007 at 7:41 pm | Permalink

    “Here’s another fine mess you’ve gotten us into, Ollie!”

  8. Posted October 12, 2007 at 11:43 pm | Permalink

    Hi all,

    Just to clarify, I fully support the income tax proposal. I support it because I love the city of Ypsilanti. I love what it means to the county. And I believe that the continued decline of the quality of life the city can offer will not serve the residents nor your neighbors.

    I completely understand the worry and stress that residents feel about making this choice. It’s no secret that Ypsi’s citizens are overburdened with social cares and fiscal pressures that others in Washtenaw, for one reason or another, have managed to avoid. Choosing to add to that burden takes serious reflection, and, frankly the specific consequences in either direction are not certain.

    It is undeniable, however, that should the proposal fail, the city will be forced, again, into draconian cuts. Suggestions that Ypsi’s budget woes can be resolved through intergovernmental partnerships or via reductions in city staff or services that will go unnoticed are myths that only serve to distract people from evaluating the real issue.

    Excluding the Water Street debt payment or implementation of the city’s solvency plan, simply continuing the scaled-back services Ypsi is currently providing will result in an escalating debt . . . $250K this coming year and running upwards of $1.5M in 2009. Just to answer this deficit, the city’s looking at losing a dozen public safety officers and completely eliminating EMS.

    None of this is the city’s fault. Michigan’s municipal finance system has put dozens of cities across the state in the same tough situation. Those, like Ypsi, that have depended on the manufacturing industry for tax base have been hit particularly hard. How we answer these challenges today will define our communities for generations.

    I look at Ypsi, at the two dozen other cities I work with that are in the same position, and I can’t help but plead, “Invest.” Invest in tomorrow. It’s going to suck today. No doubt. But the citizenry that chooses to sacrifice self for community in these trying times is the one that will prosper as we make the hard transition to a new economy.

    And we all need Ypsilanti to prosper.

  9. mark
    Posted October 13, 2007 at 9:59 am | Permalink

    Thanks for taking the time to respond to my post, Conan. I’ll move your comment up to the front page.

    And thank you, everyone else, for taking the time to comment. I know it’s a frustrating subject to dig in to, but I really do think it’s necessary, as – believe it or not – several of us are still undecided.

    It was just pointed out to me that MM.com is the first site to come up when “Ypsilanti Income Tax” is Googled. So, like it or not, this is a site where people are getting their information. It’s important for that reason that both sides are well represented.

  10. Union Household
    Posted October 15, 2007 at 10:52 pm | Permalink

    Go to Davis Street, off of Prospect near the old hospital. Turn east, and tell me what you see as you approach Emerick. Nearly every house is against the tax. Why do you suppose this is?
    Then ask yourself, why is the City of Ypsi paying Kirk Profit $40,000.00 a year to lobby for us? Don’t we elect people to do that? That money could have opened the freight house for an entire year! So don’t tell me we’ve already cut to the bone. And another point, if the warnings mentioned in the solvency narrative come true, (i.e. dead animals, piled trash, burning houses, deep snow, etc.), how long do you think the people in charge will be able to keep their jobs before the people rise up and demand a change in personnel?

    Mr. Glen S. is not putting children through college, nor does he experience a raid on his kitchen by famished teenagers. Does he believe that all of those families on Davis Street even have an extra dime? Go over there and sell your nasty tax. All the arguments in the TAX TO THE MAX arsenal won’t change a single mind. Why? because it’s such a lousy, bone headed idea, and the proponents are foolishly committing political suicide! Can’t wait until the next council elections!

    John Delcamp, 32 year resident of Our Still Beautiful City. (An will fight to keep it that way!).

  11. Glen S.
    Posted October 16, 2007 at 7:13 am | Permalink

    Union Household: If Ypsilanti is forced to make deep cuts, guess who’s going to be on the front lines? Our Union police officer, our Union firefighers, our Union DPW workers, and our Union retirees.

    While the anti-tax crowd is working overtime to convince everyone that the problem is too much “administration,” the fact is that the OVERWHELMING majority of the city budget goes to pay salaries and benefits to these dedicated and hard-working people. Salaries and benefits, I might add, that were earned through collective bargaining.

    I come from a blue-collar background. My dad was a proud union man, and my mother belongs to (and benefits from) a union. I was, for 11 years, a union member myself. I have always been a committed Democrat, and like you, I will always support the right of working people to advocate for fair wages, fair benefits, and fair working conditions.

    In fact, I firmly believe the beginning of the breakdown in union power, and the subsequent decline in middle-class living standards began with the rise of the Reagan Republicans (and, unfortunately, Reagan Democrats)in the 1980’s. Ironically, these are the VERY SAME people who who were so successful in convincing the American people that all government, and all TAXES, are bad…

    By the way – you’re right. I don’t have any children. And guess what? Since I’ve lived in Ypsilanti I’ve faithfully voted for virtually every school millage and bond proposal. I never expected to benefit from this directly, but I believe our community’s children deserve a decent education – and I was willing (happy) to help pay for that. I’ve also consistently voted to support millages for parks, libraries and WCC, again — because I thought that was the right thing to do.

    I haven’t yet lived in Ypsilanti for 32 years, but I love and care about this community, too. Like you, I’ve worked very hard to make Our Still Beautiful City even more beautiful — and I promise that I will continue to fight to keep it that way.

  12. Union Household
    Posted October 16, 2007 at 11:13 am | Permalink

    I’m not worried about cutting active Union represented Police and Fireman. As has been shown in the past, the people will not stand for it. As for the retirees, their pensions are funded as required by Sate Law, so they are resonably safe, (as safe as state government mandates, which is scarry). No sir, these threats of essential cuts are just a cheap attempt to sell the tax using fear and intimidation. The “Gang of Four” have effectively wasted eleven months of precious time on this ruse, and should be held responsible for the $20,000.00 wasted on this hopeless cause. Until they learn how to take baby steps, they’ll never get anything done on Water Street, or anywhere else in Ypsi. See you at the polls pal, most of my neighbors will be there as well! JCD

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