The fight over the Ypsi income tax is now officially on

I disagree. I don’t think the debate starts in earnest until Steve dresses up like a Redcoat and rides one of his Segways through the middle of town, warning people of the impending danger posed by increased taxation. (And, yes, this did happen.)

Being new to Ypsilanti, and being (admittedly) a generally kind person who truly believes in “the golden rule”, this kind of stuff makes my stomach turn. I honestly don’t understand why people feel okay acting like this. I guess I (naively) thought that we were all acting like adults who honestly wanted the best for our city, whatever that might be. It’s fine to disagree, but this kind of stuff is childish and disgusting. Whomever it was that bought the domain for the express purpose of manipulating it, and posted that ridiculous “memo” should be ashamed of themselves. I just feel sorry for you that you feel the need to act that way.

Who announces a web site without actually owning it?

With people like this working for and against an income tax, this town is doomed.

As someone who lives in a Michigan municipality with an income tax (Detroit) I am a little wary of Ypsilanti’s income tax proposal. I know, it doesn’t directly impact me. Not my community. Etc. I do know this. Detroit’s income tax is lamented by many of the entrepreneurs and younger politicos here. It’s also one of the biggest excuses given by suburban business people who want to open or expand a business here but don’t. If I were King of Detroit, I would likely move to get rid of it.

I understand/appreciate the merits of a municipal income tax, specifically those that have been spelled out here and by proponents of this idea in Ann Arbor and Ypsilanti. However, I am leaning toward the idea that it would hurt more than help in the long run. It seems like a municipal income tax would only work on a regional basis where every community buys in. Limiting it to only the inner city communities does too much to balkanize this region and accelerate disinvestment in urban communities. I’m more leaning toward anti-income tax (not that my opinion really matters) mainly because I don’t see how another municipal income tax would push the region in a positive direction.

Steve needs to find a new headquarters also.
His prior ones are shuttered,,,

WL.

There are legitimate reasons to vote both for or against the proposed income tax, and I welcome an open and honest debate. What bothers is that some people would rather obfuscate the facts in an attempt to trick people into supporting their cause. That “win at all costs” mindset, in my opinion, is not good for our city. Sadly, there are some in our community who don’t seem capable of honest debate, relying instead on ridiculously stupid tactics such as these. I’m undecided on the income tax, but I’m inclined to say that I’ll be voting for it, if for no other reason than men like Steve Pierce are against it.

The heart of this issue is being ignored by most here. The only reason an income tax is being proposed is because the city has already levied the state mandated maximum mills in property taxes. So the city has to keep coming up with separate “line item” mills, if you will, to keep taking money from residents and people that actually work in the city.

Why don’t people here see that as an enormous problem? Why do you think this will be the solution to “save ypsi?” They will just ask for another form of tax in a year or so, to cover some other wasteful program/idea.

The heart of the issue is that the city is so mismanaged, that it can’t survive without endless specific taxes, on top of the state mandated maximum for prop. taxes. You guys keep voting to give them more and more money, and they will continue to ask for more and more and more of your money.

the taxes will vary with each home (seems higher on the east side). It depends how long you have owned your home and which neighborhood you live in. My family would see at least a 30% increase between the millage and income tax. Some of us had lower taxes last year and some of us had higher taxes.

Isn’t it interesting that when people actually get educated about the real numbers, and the real reasons for the city’s financial situation, they support the proposals for new sources for revenue?

The anti tax candidates of the past now support these proposals because they have had to get educated and understand the issues. The majority of the anti-tax people simply do not understand what is going on and are falling back on theoretical positions, rather than positions based in reality.

This is not a matter of mismanagement. This is a matter of pension and healthcare costs commitments of the past growing and eating up our current revenues, and of the greater national & state economic situations “trickling down” to us to deal with. Yes, Water Street was a gamble that didn’t pay off, but complaining about that isn’t helping anything. What will help is to get this city through to the other side of this situation so that it doesn’t fall apart before the bigger systems at the federal and state level can change.

Cities will fall apart, that is inevitable. Ypsilanti doesn’t have to be one of them. When other cities start to fall, the state will have to respond and things will change with regard to municipal funding. We just have to hang on while this all happens.

Get educated. Understand this issue as more than theoretical. Our city depends on it. If you aren’t willing to get educated, then do us all a favor and stay home on May 8. If you already understand these issues than I look forward to seeing you down at the polls when you cast you YES votes.

Here is some information about how these exact same issues have impacted other cities (San Jose & Vallejo CA, for example) . If you don’t understand that this is bigger than Ypsilanti, then you don’t understand the issues.

http://www.vanityfair.com/business/features/2011/11/michael-lewis-201111

http://www.nytimes.com/2011/03/06/magazine/06Muni-t.html?pagewanted=all

@Dan, although everyone pays the same millage *rate*, the dollar amount people pay varies, based on the taxable rate of that property. The taxable value of a property is separate (but, of course, related) from the assessed or state equalized value. The dollar amount each person pays is based on the taxable value of their property, not the assessed value or SEV, although the rate remains the same.

If I owned a house in Ypsi, that had a taxable value of 40k (80k market value) and was paying 3200/taxes for what Ypsi offers, I would walk away from my home. On the flipside, if there was no income tax increase, and the police presence disappeared due to budget cuts, and crime significantly spikes, I would walk away from my home. At some point it becomes about providing a quality life to my family, and not about saving a city. Just my own opionion. I live in the twp. I’m sure this issue (and decision) will be coming my way soon.

Finally, let’s also assume that person has an AGI of $75,000.

The median income for a household in the city was $28,610

Jackpot! Math is fun.

How about less fun, more fact.

Brainless,
every town needs, to mention a few things here, a self proclaimed millionaire outspoken guy, riding around on a segway, in a 2 block radias, unsuccessfully runs for mayor, supports another unsuccessful major candidate, wears a red coat, seen around town looking to snap pictures and post them as GOTCHA photos, and surrounds himself with a now defunct local Business Guru as a “PUNCHING BAG.”
Come on this is good stuff.

WL.

Steve deserves better than this. You people are just jealous because you don’t have fleets of Segways that you can give your buddies rides on, and a wife who can bring home the bacon while you sit at home, on a self-wiping toilet, conspiring with the likes of Dave Curtis, on how to ruin your rivals and turn Ypsilanti into an entertainment hotbed of ridiculous Mongolian barbecue joints and full-nude dance clubs.

Let’s sell the parks to a for-profit prison. Then, let’s put the kids to work, fracking along the banks of the Huron. And, those that get sick can work in brothels. Ypsilanti will be flush with cash in no time.

@dragon

If were going to use facts, the 2010 Census told us that if you own a home in Ypsilanti with a mortgage, your median income is $70,462.

Mark’s a freakin’ brainiac! I was truly wondering if he would soon “segway” from one of Ypsi’s hot button topics (Beal) to the other (Pierce) I just didn’t expect him throw them both out there during the same week! Give the man a double-word score….

My point was that the posting was purposely using numbers meant to scare people. Which even you admit to exaggerating to gain this effect. This letter just as easily could have used a renter locked into a new year long lease who made 24k. His/her taxes would go up 1%.
Or we could use fun math and say his/her taxes went up infinitely, from 0 to 1%.

my previous post should start with “a renter’s tax RATE increase”

@j,

good points. Your landlords non-homestead prop tax would go up, and that would no doubt be passed along to you. Add on to that, the 1% of your income that you’d be paying, and you would certainly be paying a large increase.

OK WL, you win this round…

Looking through the comments, it seems the golden rule for many folks here seems to be: “Whatever saves me a buck is automatically good – whatever costs me more is automatically bad.”

Meanwhile … barely a mention about what’s best for the community in the long-run, what will help to keep Ypsilanti to remain financially solvent and stable, what will help us maintain our police and fire protection, etc.

There is no doubt that this is a complex issue and — if anyone feels the need to lay blame — there is certainly plenty to go around: Wall Street, K Street, Washington D.C., Lansing … and yes, perhaps even here in Ypsilanti.

My point is this: None of that really matters right now. Our community is facing an unprecedented threat … and we are faced with a one-time opportunity to maintain essential public safety services we all depend upon, while also making sure that control of local decision-making remains in the hands of locally-elected (and locally accountable) officials — instead of an unelected, accountable “Emergency Manager.”

If that means paying a little bit more (while, in the mean time, my property tax bill continues to plummet every year), then, by all means, count me in!

@anonymous666

Touche.

@j

The “Yes” folks spout the constant refrain that municipal bankruptcy is not an option for Ypsilanti. No matter how many times they say this, doing so will not make it true.

Municipal bankruptcy is part of the federal bankruptcy code, and most certainly an option. It does require a level of cooperation from the Governor, and Rick Snyder is on record strongly discouraging it in favor of appointment of an emergency manager. That does not make it “not an option,” just difficult.

ex-Mayor Farmer’s $30 Million folly hasn’t left the city with easy options, despite the best efforts of Pete Murdock, Mike Bodary, and Brian Robb to rein in spending since 2008. A managed bankruptcy process (possibly facilitated by the appointment of an emergency manager) will allow the city to settle its massive debt under terms the city can actually afford without destroying itself and the few remaining residents who cannot get out.

In all likelihood a managed bankruptcy would include:

(1) a write-down (forgiveness) of more than half of the debt (perhaps as much as $15-$20 Million, with

(2) an immediate payoff to creditors of a portion of the remaining using the existing cash reserve (perhaps $5 Million if done soon) and

(3) an extended payment arrangement for the balance ($5 – $10 Million or so) over 20 years (probably funded by a debt millage).

It can be done, and the sooner the better. The city’s own experts have indicated that the income tax and debt millage only by some time, leaving the city in the same hole down the road. That is the definition of an insolvent debtor. Bankruptcy is our city’s only reasonable chance of actually having a healthy financial future within our lifetimes.

Mayor,
are you speaking on a mega-phone on a segway right now in downtown Ypsi, on Michigan ave?

WL.

What will the millage rate be at the end of that 5 year plan, and how much of the Water St debt will be paid off by then?

@anonymous666
Wow and thank you for that.

@J
Can you explain why renting in Ypsi is a bad idea right now? My only evidence is to the contrary but it is also anecdotal. My girlfriend and I are renting a comfortable two bedroom house and it is very affordable. We also have a small number of friends who rent around town and have yet to hear complaints. I suppose there might be issues among student housing landlords but I get the impression in general renting in Ypsi is a good option.

What the pro-tax people don’t want you to consider is that a business can locate a block outside city limits, where there is an excess of undeveloped property and empty storefronts, and pay half the millage with no municipal income tax and yet still be within walking distance to any amenity that the city has to offer. Higher taxes will discourage business and further depress the value of homes in the city. The quality of life is enhanced with more disposable income.

Does anyone know if small businesses or corporations also have to pay this income tax or is just individuals?

If/when property values go up… is there a plan to get rid of the income tax or will it stay around forever?

The plan is to pass a ballot initiative for twice the rate as needed today to facilitate the future doubling of the income tax.

Looks to me that Steve got his 30% number from Brian. Maybe they aren’t on opposite sides of the debate this time after all.

the 30% number looks reasonably accurate to me, even for renters who dont actually pay property tax directly, but their rent will increase due to landlord’s increase.

Thats a pretty striking figure. ~30% tax increase on the people paying by far the highest tax rates in the county.

What do you think Pete- should the city spend hundreds of thousands of dollars annually to provide recyclable materials for Ann Arbor to sell, especially since more than 90% of recyclable materials collected in our nation ultimately ends up in landfills anyhow?

Thank you, myheart claps. That was beautiful.

@ Pete Murdock

“The tax impact will impact everyone differently BUT the inability of the City to provide a safe and decent community will impact everyone.

The larger question is what kind of community do we want and are we willing to pay for it. …”

I couldn’t agree more.

Thanks for adding some logic and common sense to this discussion.

Mayor Schreiber’s five year plan does not solve the problem; it delays the inevitable. Despite the pro-tax side’s wonderful assertions that they will impose only 1/2 of the debt millage they are asking for in May, the plan’s details show that the millage must rise during the second five years and beyond.

Brian Robb is the only honest councilmember commenting here, as he quite rightly asserts that the scope of the financial mess should compel the city to impose the entire debt millage right away if city officials were being honest with the residents.

Instead we have the same sad and discredited argument from the 2012 pro-tax side that we saw in 2007: Vote for these taxes and we promise we won’t whack you with all of it at once! Ludicrous.

Mayor Screiber’s comment that the city isn’t broke illustrates the same attitude as the person who, upon receiving a blizzard of “insufficient funds” notices, perplexedly responds with, “But why? I still have checks left!”

Mr. Mayor, a city can be insolvent with a $7 Million cash reserve. The $30 Million debt plus the massive interest costs equal out to many times the entire annual budget of the city. Even if both tax proposals pass in May, your own experts have reported to you that all of the new revenue that may be generated will not be enough to retire the debt long-term.

That is the definition of insolvency, and this alone is an excellent reason to begin the conversations now with the Governor’s office to look for a viable alternative to this slow death spiral.

Council’s five year plan is based on both of these taxes passing. They have no plan for what they will do if they do not pass. I do not understand how people can say what will and will not be cut if the taxes don’t pass, there is no public plan that I am aware of. Even with both taxes passing we are again in the negative in five years. The city has millions of dollars in reserve. They have enough to spend whatever a special election costs to have the vote in May instead of adding it to another scheduled election. The situation is not that desperate…

@ Emma

Sorry, but the “millions of dollars in reserve” bit is nothing less than a red herring argument being propagated by tax opponents.

The City does have funds in reserve — but that does not mean there is a big pile of cash just waiting to be spent however we wish.

In addition to having a certain “balance” that is kept on hand to cover an emergency or major unanticipated expense (as per standard practices in municipal accounting) much of that money is already committed to pay for existing obligations that will come due in the coming years.

In reality, claiming that there’s no problem because we have money “in reserve” is like thinking you’re “rich” because you have money in your checking account — before you’ve written checks to pay your monthly bills.

And, even if these reserves really *were* a slush fund we could use however we wanted … they pale in comparison to the estimated $24 million dollar cumulative budget hole we will face by the end of the five-year period — unless we develop new, sustainable sources of revenue.

I just read the FAQ’s for city income tax available at cityofypsilanti.com. One seems a little strange:
“5. Am I allowed a deduction from income for each personal and
dependency exemption I claim?

There are personal exemptions and dependency exemptions. A taxpayer
and spouse may claim personal exemptions. A taxpayer may claim one
dependency exemption for each dependent meeting the rules for claiming
an exemption under the Internal Revenue Code. As currently proposed, a
taxpayer will be allowed a deduction from income of $1,000 for each
personal and dependency exemption (as determined under the federal
internal revenue code). ”

Does that mean a single Ypsilanti resident with no children would have to make more than $100,000.00/year to be affected by this tax? A single person with one child would have to make more than $200,000.00? How many people in the city of Ypsilanti would really be contributing and how were the projected income tax figures in the five year plan determined?

@Emma,

no, it means that if you made 50,000 and had one exemption, you would be taxed on 49,000. (so youd pay $490 instead of $500)

I know I’ve said it before, but I feel it needs repeating. It does not make any sense why Ypsilanti has experienced such long suffering. Its a cute little town with good bones (if you look past all of the blight, crime, shitty schools, horrible tax rate/base.) It has a university. It is surrounded by prosperous cities/villages. It has a major hospital. It has different pockets of neighborhoods, with distinct houses. Everyone is pleasant, even if they don’t put an emphasis on bathing. It has a lake. I repeat, IT HAS A FUCKING LAKE.

Ypsi is the way it is because it has been horrible mismanaged. Propery declining values and business flight affect everywhere. We are no different. It’s so hard to understand why we should give more money to those that obviously have a horrific track record of managing it. I think I’m a pretty smart guy who thinks reasonably and logically. I can read, write, drive a car, and cook my own meals. What the fuck am I missing?

@Rodney Nanney – Once more I will try to dismiss the myth of bankruptcy as a viable option, or even an option at all. But, alas, I think it is to no avail.

Yes Chapter 9 bankruptcy exists but our ability to use it as viable as winning the lottery which also exists.

Section 109(c) of the Bankruptcy Codes sets forth four additional eligibility requirements for chapter 9:
1. the municipality must be specifically authorized to be a debtor by state law or by a governmental officer or organization empowered by State law to authorize the municipality to be a debtor;
2. the municipality must be insolvent, as defined in 11 U.S.C. § 101(32)(C);
3. the municipality must desire to effect a plan to adjust its debts; and
4. the municipality must either:
• obtain the agreement of creditors holding at least a majority in amount of the claims of each class that the debtor intends to impair under a plan in a case under chapter 9;
• negotiate in good faith with creditors and fail to obtain the agreement of creditors holding at least a majority in amount of the claims of each class that the debtor intends to impair under a plan;
• be unable to negotiate with creditors because such negotiation is impracticable; or
• reasonably believe that a creditor may attempt to obtain a preference.

First, once again, the Governor must approve any Michigan municipality declaring Chapter 9 bankruptcy. Governor Snyder has repeatedly stated that no municipality will be allowed to go bankrupt on his watch. I have personally met with State Treasury officials who have repeated the no bankruptcy pledge and removed it as an option for us to pursue.

Second, the municipality must be “insolvent” defined as:

(32) “insolvent” means….(C) with reference to a municipality, financial condition such that the municipality is – (i) generally not paying its debts as they become due unless such debts are the subject of a bona fide dispute; or (ii) unable to pay its debts as they become due;

We are not insolvent. We are trying to prevent that. We are not Highland Park that has no money to pay teachers or Detroit which has borrowed money to pay operational costs and will run out of money this spring.

Third, the end result of a chapter 9 bankruptcy or default would – after going through all of reserves and reducing municipal services to pay the debt – most likely be a court ordered millage to pay the debt obligation. Bankruptcy courts in municipal cases have almost always protected the bond holders.

That is what we are proposing now. As was done with the street paving millage, this debt should have been originally secured with a debt retirement millage with voter approval and a full discussion of the merits of Water Street project and its debt implications. The
The Water Street portion of our plan is remarkably similar to what you have proposed.

1. Restructure Loan for longer period of time – Several years ago the City refinanced these bonds by “capitalizing the interest” that delayed the payment schedule from the City and extended the length of the bonds out to FY 30-31. It added $3M plus interest to the bill. Because we have recently done that, there is no benefit to extending out a couple of years more.

2. Use Fund Balance to pay off some of the bondholders – What we have proposed is to use $3.8M of fund balance to pay off the debt. As to buying out bondholders, we have looked at that possibility, but there are no bonds callable (bonds that we can buy out) until five or six years from now. We will look at that when the opportunity arises – but without the debt millage and CIT there will be no surplus to buy them out in five or six years…

3. Extend the payment schedule over 20 years – See No. 1 but we are already at 20 years because of an earlier extension.

4. Use a millage to pay the balance – that is what we propose

So other than trying to get some relief from our obligation through a bankruptcy we cannot do and– I think we are on the same page with Water Street Debt.

I am unwilling to bankrupt the City and eliminate our ability to provide a safe and decent community to end up with a Water Street Debt millage anyway.

Now that we resolved the Water Street Debt situation – let’s move to the loss of revenue implications to the City’s ability to provide basic services. Tax Revenues have already declined $2M annually. After all the cuts and savings we have done over the last three years, we still are faced with about a $10M shortage over 5 years. Lacking revenue what operating expenditure would you suggest to cut or eliminate?

@ Burt Reynolds

“What the fuck am I missing?”

For starters — any degree of understanding about how the situation Ypsilanti is facing has way more to do with global economics, national politics, zoning and other policies that favor new developments in cornfields over supporting existing urban communities, and Michigan’s completely broken system of funding local government — than with Ypsilanti being “horribly mismanaged.”

Don’t you all wish we could just say what we all are constantly thinking, but can’t? That Ypsi will never be nice until all the ghetto blacks and trashy whites leave?

A new site called Found Michigan has an article today on Ypsilanti which makes it sound as though everyone in town is behind the tax increase.

http://www.foundmichigan.org/wp/2012/02/29/ypsilanti-back-from-the-brink/

@ Demetrius

Some of the proponents for the tax increase are the same group of people who thought that the Water Street project would be a boon to the city. Why follow their advice about getting out of debt when it was their advice that lead the city to this disaster? Current residents are paying for their own mistakes – electing the wrong individuals as stewards of the residents tax dollars.

meant “many more residents”

I think you should just have WoodStock III on the Water Street property to pay it off… or maybe get Glenn Beck to come and rant about how poor people are destroying Ypsi.

i live in the community, not the city limits. Your policies and actions still affect me. When you guys were about to deny the rec center on Water St, because it didnt fit in your “grande plan” it would have meant a new rec center for one of the surrounding communities. If/when you enact an income tax, it will most likely mean companies that want to open in the area will open in the surrounding communities instead. These are just a few ways how your policies affect the rest of us.

But mostly, I just want to understand why so many people are so willing to keep giving money to the city. It really is crazy. You’re talking about millage rates approaching 70 for a city with a half vacant downtown that cant attract business, and people here are still ready to open their wallets and give more to these people.

Its a 0.5% income tax for people employed in the city. Additional 1% income tax if you live in the city. I don’t believe the compnay pays any more than they used too

@Demetrius,

Because an income tax affects more than just the residents of the city. Those who work in the City, and already pay taxes in the communities where they live, will be unfairly burdened and don’t even get a chance to vote on this issue. Because higher taxes merely exacerbates the problem, accelerates the downward spiral, and impacts neighboring communities.

The city has lost about $2 million in revenue per year, in the last 4 years. That’s the root of the fiscal crisis facing Ypsi.

And the Governor will block any attempt to go bankrupt. So, it’s not an option. And yes, the $30 million debt for the Water Street fiasco is a huge liability, and it was a terrible mistake; but it is one that the courts and bondholders will force payment of. (Few if any of the original proponents of the Water St project are still in any decision making position, by the way).

The way I understand the law, if we try to go bankrupt, we’ll lose, but spend lots of time and lots of city dollars on lawyers.

So, clearly, things have changed since 2007. I was against a city income tax then, and am for the proposed city income tax now, and the Water St mileage too. Nearly all current members of Council were AGAINST a city income tax last time, but not they all (or all but one?) favor a city income tax. They changed their position because the facts changed: $2 million a year less in revenue is a serious fact.

Typo above!!! Sorry! that “not” four lines up from the end of my previous comment should be “now” !!

Dan,
Complex question, but here’s a partial answer that I think explains most of it: The townships you name aren’t in the same depths of fiscal crisis in large part because their infrastructure isn’t as old as ours (old stuff costs more to maintain), and they have much greater land area to tax, without the population density of a city. Apples and oranges.

@Mark Higbee,

You shouldn’t have to spend more money policing 3.5 sq. miles than the township pays for 27 sq. miles just because the city has older infrastructure. 20,000 people in a small area is easier to police than 50,000 spread out over a large area. I don’t think your answer explains it at all.

@ Dan. There is no way that anyone could have planned for a 35% reduction in revenue that no one knew was coming until at least 2007 or later.

We may be the first community in this area to face such difficulties, but the other communities that you mention will face rough times ahead as well.

We had a boom time in the 1970s/1980s when we had a lot of city staff and public safety and we felt secure due to the revenue brought in by Ford and other manufacturing and industry which has since dried up. In those days, no one understood the long-term consequences, no one thought that people would live as long or require such high health insurance costs, etc. You seem to think that the people of the past should have been smarter than anyone and everyone else in the country, and you seem to like to Monday morning quarterback this whole thing. This is a problem of world wide proportion, and it is hitting nations, states and cities in succession as the problems trickle down. The townships will feel this too, just give them a little more time.

I’m ignoring the nay sayers and doom and gloomers. Water Street could have worked out quite nicely had the bottom not fallen out of the housing market. LET IT GO!!!!

We are not declaring bankruptcy, and I, for one, give a shit about the city. That’s why paying extra each year to make sure we don’t fall under an emergency dictator doesn’t happen is ok with me. I, for one, am willing to make that sacrifice for my city.

The rest of you, who are anti-tax and feel it will drive people out the city. You first.

as I’ve said Erika, all of the surrounding communities have seen similar declines in tax revenue from the housing market collapse. Only one municipality is attempting to add an income tax and “debt retirement” millage to an already astronomical tax rate.

Therefore, it is impossible to say that the housing market collapse is the “root of the fiscal crisis.”

the problem Megan, is that the citizens of Ypsi did not make that financial mistake.

Just to clarify, I left long before Water Street.

First, I find it fascinating that we hear again and again from many of you how this income tax will replace lost property taxes as a result of the drop in property values. Does it not occur to anyone that our houses will now plummet yet again in value in response if this passes? Nobody wants to live here even now. If they did, they would, but there are cheap houses everywhere that stand unsold. Extra tax isn’t going to help. So, before you all get excited by this “extra” revenue, it’s going to go away just as quickly. It’s basic economics. The market here will only bear so much tax. If property values have to give to get them in line, they will.

Second, two income households are getting screwed sideways by this income tax proposal. We get double-taxed here. Nobody has mentioned this (because I’m sure it’s uncomfortable for proponents to talk about). This whole thing is so very loathsome to the very people you need in this city: growing families. So, thanks for trying to screw us everybody. Hope all you singles can hang down at all the new hipster bars in town and pat each other on the back for dropping this in our laps. Must be nice to be able to bug out when you feel like it. The rest of us are stuck here with our houses.

Last (to Megan), I think your little screed on debt is cute. “What kind of responsibility are you teaching your children, that when you make a financial mistake and you should just walk away and say fuck it to your debt.” This is called “business” and that’s exactly how it works and that’s exactly what rich people teach their children. There is no moral imperative to debt. It’s a risk taken on by the lender and they know what they’re doing. It’s not like they don’t have a recourse here. If they don’t want the risk, they should stay out of the business – and yet they flock to it in droves. I would hope my own children would have the good sense to walk away from a shitty financial deal that is killing their long term prospects.

Thats all part of the master plan, Brainless. You see, when the property values keep falling, citizens wont mind paying higher and higher tax rates, since you will basically be paying the same amount anyway!

Millage rates will hit 100, but hey, your house is only worth $25k now, so you’re tax bill stayed the same!

@Dan,

Glen was a big supporter of the Water Street fiasco.

Murph,

#1, my issue is with people claiming the fall of property tax revenue is the “root” of the cities crisis. As mentioned several times, all of the surrounding communities face the same loss in revenue. None of them are asking for an income tax and a “debt retirement” millage. It’s 100% impossible to claim a water street debt retirement millage isnt the result of mismanagement.

#2, where did you get your data from? The state website (which has thus far only posted up to 2010 rates) does not jive with your numbers.

http://www.michigan.gov/taxes/0,1607,7-238-43535_43540—,00.html

Dan, Gawlas shows up here to say some sarcastic-ass bullshit on a regular basis. I imagine his property investment skills hover somewhere around that same level. He probably makes some coin and he’s still a resident, so at least he’ll have to pay out the ass for his own errors here. Small comfort.

By the way, to all of the “this will drive business away!” folks: certain businesses depend on being in the city, near EMU, near the hustle and bustle. They aren’t going anywhere. The others may choose to leave, we can’t stop them. What will make EVERYONE leave is a community that is dangerous, dirty, and hard to deal with due to understaffing and lack of basic services.

Also, all of these retorts are really just ways of saying “I don’t want to pay”. That’s fine. You have to do what you have to do, but for those of us who are willing to pay to keep this city worth living in, it’s getting really frustrating to hear you repeat the same red herring arguments when what you should be saying is simply “I don’t want to pay”.

I am willing to pay. I am going to step up and keep this city whole. I am going to vote YES on BOTH on May 8.

Talk of “driving business away” from Ypsi is laughable.

Farmland doesn’t generate tax revenue to the same extent as a densely populated city. Ypsi City is closer to 4.5 – 1 = 3.5

Will the city be able to hire more people, or will it just keep in place the skeleton crews of lean efficiency?

Dan – the State’s site has the 2005-2010 numbers; I had to go scrape the more recent few years from the Counties’ election results websites. Admittedly, there’s some margin of error in some of those–for example, there are some millages structured like “3 mills in first two years, 5.5 in each following”, and I didn’t bother to figure out which year of those we were in. This also doesn’t include any millages that cities have raised the rates of w/o going to the ballot (if what they were levying was below their cap, and they raised it within the cap, or auto-increases like Ypsi’s police-fire retirement line).

You’re welcome to spend time figuring out whether Ferndale’s increase was actually 20, 22, or 25%, but I wasn’t going to put quite that much effort in–it doesn’t change the fact that voters in cities across the region are approving 3, 5, 8 mills at a time, because they understand there are Real Problems here.

Brian’s comments were early in the process and before we reduced costs by adopting an 80/20 split on health care premiums and moved up the effective date of the City Income Tax by placing it on the May ballot. The prime reason for having a May election was to collect revenue earlier if it passed or if it failed know how much we would have to cut to balance the two year budget to be adopted in June. The five year plan if it passes stabilizes services over those five years with a deficit free budget.

Many of those advocating higher taxes seem to have professional positions and no kids. They can easily afford another $1000 a year in taxes. However, passing these proposals is a real financial burden for many families who are already struggling to pay rent and feed and clothe their kids, much less save for college. There are plenty of areas that can be cut out of the budget and a number of services that the city provides that other struggling communities have eliminated. You shouldn’t increase taxes in the city to a point where working class people suffer.

Can someone answer me? Will we be able to hire more people or not?

kjc,

don’t forget that EOS also expects working class people to educate their kids at home.

@Pete Murdock

“The five year plan if it passes stabilizes services over those five years with a deficit free budget.”

How do these 2 proposals address the steep rise in F&P pension millage that is due in a few years?

@Glen, I couldn’t agree more. Those of us with any means at all will do what we need to do to either protect ourselves or get out. The people that can’t afford to leave or hire private security companies will suffer. Where’s the social justice in that?

Thank you, Lisele, for bringing the conversation back full circle. Everything Save Ypsi Yes has done has been in good faith and conscience. This website tactic was not in good faith or done with good conscience. It was a dirty trick and shows the character of the person(s) involved.

To those involved: shame on you.

You’re killing me EOS. You can find the budgets and annual reports here: http://cityofypsilanti.com/Government/Departments/FinancialServices/Accounting/BudgetAuditReports

Instead of vague “non-essential areas”, pick a line item or three to cut and try to come up with the couple million we are losing in revenue. It can’t be done without cutting police and fire since there’s not much else left.

I think reasonable people can disagree about the correct level of policing and fire protection. What is not open for debate is that a “no” on either tax proposal will lead to significant cuts to the police and/or fire department. That is fact and it is not helpful to obscure our problems and the decisions we have to make with generalities and financial wishful thinking.

For the record, I think we have more police and firefighters than we need. I understand there is a very real lower limit to how many police and firefighters can safely work any given shift (I understand that 4 firefighters are required to attack a fire), but we aren’t there for police anyway. We all complain about annarbor.com’s crime coverage, but I’ve noticed a pattern that all the Ypsi crime stories are about arrests and convictions while the A2 crimes are mostly perp at large. This is a good thing and a credit to YPD, but maybe closed cases are a luxury we can’t afford.

Right now I’m thinking “no” on income, “yes” on water street, but I’m not certain just how deeply we can cut public safety without going full Mad Max Beyond Thunderdome.

When getting advice from tax virgins and tax celibates on fiscal matters, I always ask myself, are these really the people who should be speaking on subjects they obviously know nothing about? Or are they confusing millage with molestation?
Either way, I think their advice should be viewed with caution.

Walt
Posted March 2, 2012 at 12:37 pm | Permalink

“Property values are so low because Ypsilanti schools suck so much. The people who can afford to send their children to private schools do. Fixing the schools really help fix this financial problem.”

I agree with Walt. Ypsi schools do many things well, but have always been under financial threat as a result of the way in which the state school aid formula works. When the Water Street development was proposed, the future demographic’s of the school district were well known. We knew then, that unless the future city population of school age children grew, our local school district would become unsustainable (the City of Ypsilanti School District will have an EFM within two years—nothing about the Cities “mismanagement” will have anything to do with that event). This was the primary motivations behind many of us who supported the Water Street development, ie. a townhouse development full of young families raising children repopulating the school district. The intent was to help stabilize the school district thus eliminating the problem that Walt identified.

Water Street is a failure—and as predicted the school district is in dire straits—and despite the school closings and constant cuts, we once again see, you cannot cut your way to prosperity. The redevelopment of much of Ypsi’s public housing will bring new families into the district–but the damage is done, and the rehabilitated units won’t be on the market soon enough to alter the districts current trajectory.

One view of the short term future–two tax increases, a failed school district, declining property values, provide new incentives for people to not buy homes in Ypsi, only poor people moving into the city, while anyone with any resources moves away. BUT because of the tax increases, bond holders get paid and we have an adequate public safety department to keep the poor folks in line, and put out the fires of the absentee landlords tenements (and our pensioners get paid at least for the next 5 years).

An alternative view (held by many who opposed Water Street and the last income tax proposal)–Ypsi would become Ann Arbors Brooklyn, a “Cool City”, a low cost haven for creative and enterprising folks. This vision does not need a functioning public school district–charter and private schools fill the void (so its failure is relatively unimportant). Nor does this vision need many of the services that growing families need or desire (drive to the township to participate in little league or soccer, let the county provide a rec center etc).

I see both of these visions as essentially the same. The only difference will be, what part of town you live in.

As a 25 year home owner of the city I have a different vision. One built around concepts like “Friends of Rutherford pool” and “Friends of the Freight house” , “Project Grow” our neighborhood associations, etc. Our elected officials, (in the time remaining before the imposition of emergency measures, whether that is an EFM or measures they take “democratically” ) should be doing everything they can to empower the active citizenry. Assets that are likely to be sold off to satisfy debtors under emergency circumstances, that ownership should be transferred to our community non-profit organizations. Perhaps the formation of a community “non-profit corporation” in which living within the city limits makes you an automatic member–could become umbrella an organization that we could begin transfer our assets.

@ j,

Privatize garbage collection and make recycling volunteer effort
– savings $1,065,037
Eliminate city council pay
– savings $89,082
Hire new city manager with 50% reduction in salary
– savings $103,532
Charge fees for building inspection at a level that pays for total cost of inspections
– savings $279,576
Eliminate development authorities and add business taxes to general fund – savings $535,173

There’s a couple million dollars saved annually even before reducing police staffing to a more appropriate level.

@EOS WTF are you smoking?

“Privatize garbage collection and make recycling volunteer effort
– savings $1,065,037”

The City’s trash collection is already privatized with Waste Management – the same firm the Township contracts with. The City’s entire Solid Waste Budget is slightly more than your $1M+ “savings” you project. We would have to eliminate virtually all solid waste services including trash, recycling and yard waste pick-up as well as litter barrel collection in parks and streets. In addition solid waste services are funded with a dedicated millage for that purpose – again as in the township. We could eliminate the entire budget and services, but it would not free up any money to provide other services. The solid waste fund is meant to be self-sufficient.

“Eliminate city council pay
– savings $89,082”

The total pay for mayor and council is $ 38,658. It hasn’t been increased in over 15 years and was reduced 5% the year before last along with all the other administrative staff.

“Hire new city manager with 50% reduction in salary
– savings $103,532”

City Manager’s salary was less than $100K. We would unlikely be able to attract a city manager for a salary of less than $50K.

“Charge fees for building inspection at a level that pays for total cost of inspections
– savings $279,576”

We review the City’s fee schedule every year and adjust fees to cover expenses. We will be doing that again in June. If there is a gap it is nowhere near $279K and we will fix it.

“Eliminate development authorities and add business taxes to general fund – savings $535,173”

If we eliminated the DDA, the 2 mil DDA tax assessment would disappear with it and isn’t transferrable to the City. The Tax Increment Finance (TIF) funds that come from other taxing jurisdictions would also disappear. The remaining TIF dollars are committed to Bond payments incurred by the DDA and payments for some services that the City performs already, (Police, Trash collection, financial administration). Assuming those items would still have to be funded, the net Savings is closer to zero.

“There’s a couple million dollars saved annually even before reducing police staffing to a more appropriate level.”

Not really. Not even close….I do appreciate that you put some ideas out there, but honestly there is little savings if any of your suggestions and nowhere near the numbers we need to eliminate our five year projected deficit.

As to the police department, we need a department with an appropriate size, to serve a high density urban community like ours. Our staff has been reduced from a high point of 50 to today’s 35. We think that is a significant downsizing which we wish to avoid more of. As to costs, I’ve seen four proposals to provide police service from four different Sheriffs, over the last 30 years and comparing apples to apples there just wasn’t the cost savings there.

Some of the cost cutting measures undertaken by the City has been the reduction of employees from 139 to 93 – a reduction of one-third. We have instituted some changes in our Health Care and Prescription Drug plans that have saved us nearly $2M. We now have instituted an 80/20 employer/employee cost share of premiums to further reduce City costs. Pensions and health care benefits have been changed for new employees that will reap savings in the future.

Pete,

Smoking? I just looked at the reports J linked to. I used the wrong jargon, but the numbers are from the city’s own budget. Eliminate solid waste collection as a city function and let citizens contract for services themselves. $1,065,037 p.17

Expenditures for city manager and council p.19. I wrote salary, and you cite salary, but expenditures are for salary and benefit packages as well as travel, training, laptops, etc. I agree that you could hire a new city manager for about 50K salary with 50K benefits which would be a 50% reduction from previous manager.

Development authority revenues p.27
Building inspections p.19

Nice attempt to obfuscate the issues though.

Peter,
“I don’t know why, but I think it would.”

Another brilliant example of your high standards of rhetoric! You add so much to every discussion. Calling me a bigot and attributing comments to me that I never made also don’t help you win any argument.

@EOS & @DAN
Pete is correct about the net figures. You picked up the expense side but not the revenue side that offsets these line items. Building and rental inspections DO get billed to the owners. We do adjust the fees to cover the expense. The requirement of the charter is balance the revenue and expense to zero.
Solid waste is also already paid in a seperate millage and not through the general fund. It has included curbside recycling. However because of cost increases in the fees from our contractor for the refuse part, Waste Management, we (council) will have to look into how to address this shortfall soon.
When I ran for council I soon became aware of all the complexities and difficulty to make easy solutions to such complex problems. I just wish everyone would familiarize themselves with the facts of why we are now asking for what we never thought we would be asking. Thanks Pete, Erika, Murph, and all who have put out the reasons for these ballot requests.

This is one of the most short sighted discussions I’ve ever seen

@ Emma

Five years ago, virtually nobody could have predicted the Great Recession or the resulting housing market/taxable value crash — nor that we would have a Governor and State Legislature that are openly hostile to the needs of older, urban communities.

In the next five years, the economy will continue to change (and hopefully, improve); and our State and Federal elected officials (and corresponding economic and tax policies) will likely change, as well.

Nobody knows what the future holds — so the best any community (or individual) can do is to take the best information they have available, build in some reasonable assumptions, and try to plan as best they can.

Ypsilanti City Council’s 5-year plan is fairly conservative in that it assumes the economy will continue to struggle, and that property values will continue to fall for the foreseeable future. If the economy begins to improve significantly and/or property (and taxable) values begin to stabilize, things could turn out differently: For example, the Water Street debt retirement millage could end up being less each year than is being projected …

My point is this: Just because nobody can predict the future doesn’t mean we don’t need to try to plan for it.

@ Pete Murdock
Why is council asking for a rate that is charging more than 2 million beyond what is needed? What is council doing to prevent similar issues besides hoping things get better? Why is there no end date to the income tax if we’ll be stabilized with a surplus in five years? Why is there not a second five year plan and third and fourth based on no taxes passing or only one of them passing and why are you wasting money on a special election in May to vote on this? Again, the whole thing seems short sighted and borderline fraudulent.

@ Emma: $15,000 for a special election is not a large amount considering the values of these proposals (millions). To wait until November would mean losing out on 1/2 a year of income because the fiscal year starts July 1, so a May election lets the proposals begin then if passed, rather than waiting. It also allows for a 2013 budget to come together in earnest because the figures will be based on whether these pass or not.

Where are you getting the idea that they are asking for over 2 million above what’s needed? Any surplus from the income tax will go directly to paying off the water street debt, reducing the millage.

City council is simply trying to get us through this potentially devastating time in one piece. City staffing has been reduced to the point of subsistence level functioning – what do you want them to do? Lock up city hall and go on a trade mission to China? Do you know that city council members make something like $9,000/yr, so they can’t do this full time. Frankly, I’m surprised that Pete and others have been able to devote as much time to answering all of your questions as they have. There comes a point when you need to just say “I don’t want to pay these taxes” and leave it at that – stop trying to pose new versions of your attempt at “gotcha” questions.

FYI: The City of Ypsilanti will hold community presentations/forums on the proposed city income tax and Water Street debt millage proposal as follows:

– Thursday, March 15 at 6:30 p.m. at Parkridge Community Center, 591 Armstrong, Ypsilanti

– Monday, March 26 at 6:30 p.m. at Adams Elementary School, 503 Oak Street, Ypsilanti

– Thursday, March 29 at 6:30 p.m. at EMU Autism Collaborative Center(formerly Fletcher School) 1055 Cornell, Ypsilanti

– Thursday, April 12 at 6:30 p.m. Estabrook School, 1555 West Cross, Ypsilanti

I asked Brian if he was for or against the income tax above, and he didn’t answer. Today, however, he answered in the Ann Arbor News. He’s for it, and against it!

Council member Brian Robb has been the only council member not to come out fully in support of the measures.

“Picking between astronomical taxes or big cuts in service is a no-win proposition,” he said. “I’m reluctant to tell people they don’t pay enough in taxes, but I’m also reluctant to tell people they need a smaller public safety department. When people ask me questions I give them answers.

“Just like the last election, this election will divide the town and pit neighbor against neighbor and I’m not interested in being a part of that.”

http://annarbor.com/news/two-sides-seek-to-educate-voters-on-tax-proposals-as-campaign-season-begins-in-ypsilanti/