Donald Trump: the long con revealed

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A number of news stories came out over the past 24 hours about spending by the Trump campaign. It would appear, based on recently obtained Federal Election Commission (FEC) filings, that the New York based campaign, in spite of taking in a great deal more money from Republican Party donors over recent months, is actually employing fewer people than it had previously. And, interestingly, it would appear as though, despite having fewer paid staff, the campaign is actually spending significantly more for office space in Trump properties than it had back when Trump was primarily self-funding the campaign… Here’s an excerpt from the piece which just ran in Talking Points Memo, to give you a sense of how much money we’re talking about.

…Back in March, when he said his campaign was entirely self-funded, Trump paid Trump Tower Commercial LLC $35,458 for rent. That amount was consistent with what he had paid since launching his presidential bid in the summer of 2015. By July, however, once he started raising funds from donors, he paid $169,758 in rent for the same space.

The Huffington Post noted that the discrepancy was particularly striking since Trump was paying 197 employees and consultants in March, compared to only 172 in July. The filings don’t clarify whether Trump is now renting significantly more office space in his midtown Manhattan building or why he would do so given his reduced staff size…

And, as you might expect, some Republicans aren’t happy about it… The following pull-quote comes from the previously mentioned story in the Huffington Post.

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He’s not just drawing more from the campaign in terms of rent, though. Trump is also paying his family members of his family from campaign coffers. While I haven’t found anything recent on the subject, the New York Times reported earlier this summer, “Mr. Trump, whose campaign has just $1.3 million cash on hand, paid at least $1.1 million to his businesses and family members in May for expenses associated with events and travel costs.” They went on to add, “(This) total represents nearly a fifth of the $6 million that his campaign spent in the month.” So, now that his campaign is spending some $18.5 million a month, with less staff, one wonders just how much of that money is finding its way back into the pockets of Trump and members of his family.

While everyone in the press seems fixated on the fact that Trump has apparently begun to divert donations from his presidential campaign back into his own bank accounts, the thing I find more interesting is the fact that, despite saying repeatedly that they’d be building an organization to rival Clinton’s, they’ve actually been cutting staff. This would seem to indicate to me that Trump either doesn’t care if he wins or looses, or that he’s trying to keep overhead low in order to have more money left in the bank when all of this is done.

While someone in the Trump campaign responded today that the candidate still contributes “$2 million per month to the campaign,” which, they were careful to point out, is more than what he takes back in rent paid by the campaign to his various properties, I can’t help but wonder how those payments are structured. In other words, is he donating the money outright, or is he in fact just loaning it to the campaign, as wealthy candidates often do? If I had to guess, having watched Trump operate since I lived outside of New York in the ’80s, I’d say it’s the latter, and I expect he’ll be looking for a payout in November, once all of this is done.

I know there are theories circulating that Trump just entered the race in order to hand the Presidency over to Clinton. Personally, I don’t buy it. In order for it to be true, you’d have to believe that he was setting the groundwork for this at the beginning of the Obama presidency, when he started in with the birther nonsense. No, I think it’s much more likely that he’s just a conman who saw an opportunity to ride a wave of hatred and fear into the general election, where he could raise his Q rating a bit, and bring a few more suckers to exploit his way. I think, however, once he saw the Republican Party begin to collapse around him during the primaries, he saw an opportunity to get his hands on the key to the Republican treasure chest. So, what likely started as a more straight forward con, quickly morphed into something else entirely once he realized that he had it within his power to move into the evacuated shell of the Republican party like a hermit crab and start using it as a tool to increase his wealth and power, regardless of whether or not he really had any interest in winning the presidency. If I had to guess, I’d say that he’d prefer to have the wealth and power without the responsibilities of the office, but I might be wrong. And, who knows, there may be other forces at play. As we’ve discussed before, maybe it’s out of his hands by now. Maybe Putin and the Russian mob, who have invested a great deal in him over the years, are going to push him into office whether he likes it or not. I guess we’ll just have to wait and see.

Regardless of how it plays out, I’m reminded right now of a plot line in The Sopranos involving the owner of a sporting goods store who had made the mistake of borrowing money from the mob that he couldn’t repay. The mob, in response, took over his store and bled it completely dry. They maxed out every line of credit he had, and ordered as much as they possibly could from his suppliers. Shipments of sporting goods came in the front, and were immediately moved out the back, to be sold through other channels. Once they had their hooks in this man, they just bled him and his company completely dry. And that’s what I think we may be witnessing right now with the Trump candidacy. I think, now that he’s got control of the party, he might just be trying to extract as much cash from it as he possibly can before the inevitable collapse.

Here’s the scene from The Sopranos. This particular scam, by the way, is called a “bust out.”

[note: Speaking of Russia’s attempt to influence the 2016 election, did you happen to see the most recent news, that they’ve likely been hacking into the accounts of journalists, ostensibly looking for information that might help them get tiers candidate elected?]

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Trump supporting Republican Senator suggests we learn our history from Ken Burns DVDs instead of those in the “higher education cartel”. Ken Burns obliges with history lesson on Trump.

This past Thursday, Wisconsin Senator Ron Johnson, warning against what he called the “higher education cartel” in an interview with WisPolitics, suggested that we change the college system in the United States so that our students encounter fewer live instructors, and watch more DVDs. Following is a clip from Inside Higher Ed.

…”We’ve got the internet — you have so much information available. Why do you have to keep paying different lecturers to teach the same course? You get one solid lecturer and put it up online and have everybody available to that knowledge for a whole lot cheaper? But that doesn’t play very well to tenured professors in the higher education cartel. So again, we need destructive technology for our higher education system,” he said.

Johnson added, “One of the examples I always used — if you want to teach the Civil War across the country, are you better off having, I don’t know, tens of thousands of history teachers that kind of know the subject, or would you be better off popping in 14 hours of Ken Burns’s Civil War tape and then have those teachers proctor based on that excellent video production already done? You keep duplicating that over all these different subject areas”…

Really, when you think about it, all we’d need is one good math teacher for all the United States, someone to teach english, and a few Ken Burns DVDs, and we’d be all set. Just think of how much money we’d save! Or, better yet, we could just have kids watch those history cartoons made by Mike Huckabee at home. And then we could turn all of our old schools into high-end shooting ranges! Because, really, aren’t the best teachers the ones that don’t take the time to know their students, but instead just shove facts at them?

[note: The above paragraph was mean to be read as satire.]

When I heard about these comments by Johnson, I was immediately reminded of Buzz, the “student-centered learning platform” purchased by our Governor’s Education Achievement Authority (EAA) for use by some 10,000 students in Detroit’s worst performing public schools. This computer platform, we were told, could achieve what teachers hadn’t been able to, saving us thousands, if not millions, of dollars in the process. This, they told us, was going to be the way of the future. Computer-enabled “Student Centered Learning” wouldn’t just give us incredible cost savings, as it would requirer fewer teachers and allow for larger class sizes, but it would also yield superior results. Of course, as we know now, none of that was true. Buzz was a colossal failure, and thousands of Michigan’s most vulnerable students paid the price.

But, in spite of experiences like this, people like Senator Johnson keep right on pushing the same narrative, telling people that teachers are expendable, and that kids can learn more from watching a Ken Burns DVD than they could from an engaging professor, who actually takes the time to know them, challenge them, and motivate them to do better work, think more critically, and grow as human beings.

Randi Weingarten, the president of the American Federation of Teachers, had the following to say about Johnson’s comments. “Leave it to someone from a party led by a reality TV star to confuse videotape with the learning experience of a classroom,” she said. “What Ron Johnson doesn’t get is that education happens when teachers can listen to students and engage them to think for themselves.”

For what it’s worth, I disagree about Johnson not “getting it.” I think he probably gets it just fine. I don’t think he’d consider, for even a minute, putting a child of his own in a school where instructors were replaced with DVDs. He’s smarter than that. He knows that there’s more to education that just reading from a script and conveying facts. But this isn’t about his kids, is it? This is about poor kids in cities like Detroit, who, let’s be honest, don’t really matter. This is just about saving as much as we can on their education before they can be pipelined into the prison industrial complex where they can be paid pennies an hour to pick our produce, sew the clothes that we wear, and staff our call centers.

But maybe it’s unfair to judge all such programs based upon our local experience with Buzz. Maybe we should look at all of the other players in the virtual education field, like University of Phoenix and Trump University. Surely they’re doing good things, right? [note: That was sarcasm. Follow the links for context.]

As Senator Johnson mentioned Ken Burns, and as I just broached up the subject of Trump, here’s a little news item you might not have seen. Apparently, not too long ago, Burns spoke to Stanford’s graduating class and had something to say about the Republican nominee for President. Here’s a taste.

…So before you do anything with your well-earned degree, you must do everything you can to defeat the retrograde forces that have invaded our democratic process, divided our house, to fight against, no matter your political persuasion, the dictatorial tendencies of the candidate with zero experience in the much maligned but subtle art of governance; who is against lots of things, but doesn’t seem to be for anything, offering only bombastic and contradictory promises, and terrifying Orwellian statements; a person who easily lies, creating an environment where the truth doesn’t seem to matter; who has never demonstrated any interest in anyone or anything but himself and his own enrichment; who insults veterans, threatens a free press, mocks the handicapped, denigrates women, immigrants and all Muslims; a man who took more than a day to remember to disavow a supporter who advocates white supremacy and the Ku Klux Klan; an infantile, bullying man who, depending on his mood, is willing to discard old and established alliances, treaties and long-standing relationships. I feel genuine sorrow for the understandably scared and – they feel – powerless people who have flocked to his campaign in the mistaken belief that – as often happens on TV – a wand can be waved and every complicated problem can be solved with the simplest of solutions. They can’t. It is a political Ponzi scheme. And asking this man to assume the highest office in the land would be like asking a newly minted car driver to fly a 747.

As a student of history, I recognize this type. He emerges everywhere and in all eras. We see nurtured in his campaign an incipient proto-fascism, a nativist anti-immigrant Know Nothing-ism, a disrespect for the judiciary, the prospect of women losing authority over their own bodies, African Americans again asked to go to the back of the line, voter suppression gleefully promoted, jingoistic saber rattling, a total lack of historical awareness, a political paranoia that, predictably, points fingers, always making the other wrong. These are all virulent strains that have at times infected us in the past. But they now loom in front of us again – all happening at once. We know from our history books that these are the diseases of ancient and now fallen empires. The sense of commonwealth, of shared sacrifice, of trust, so much a part of American life, is eroding fast, spurred along and amplified by an amoral Internet that permits a lie to circle the globe three times before the truth can get started.

We no longer have the luxury of neutrality or ‘balance,’ or even of bemused disdain. Many of our media institutions have largely failed to expose this charlatan, torn between a nagging responsibility to good journalism and the big ratings a media circus always delivers. In fact, they have given him the abundant airtime he so desperately craves, so much so that it has actually worn down our natural human revulsion to this kind of behavior. Hey, he’s rich; he must be doing something right. He is not. Edward R. Murrow would have exposed this naked emperor months ago. He is an insult to our history. Do not be deceived by his momentary ‘good behavior.’ It is only a spoiled, misbehaving child hoping somehow to still have dessert…

So, yes, by all means, learn from Ken Burns, and destroy these “retrograde forces that have invaded our democratic process.” And, of course, fight your asses off to protect our public schools.

Two more things… One, Ron Johnson says he’ll be supporting Trump for President. Two, it looks as though the good people of Wisconsin are turning on him. [Thank you, Wisconsin.] According to recent polls, the very awesome Russ Feingold may kick his ass come November.

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Tonight, instead of blogging, Mark is…. watching St. Vincent

There’s a ton that I want to write about tonight, but I just can’t do it. I’m sorry. I just need to watch a Bill Murray movie and forget the world for a while… If you’d like to join me, I’ll be starting St. Vincent on Netflix at 10:00 PM. [If you don’t have Netflix, you can also rent it on Amazon.]

Posted in Art and Culture, Uncategorized | Tagged , , | 5 Comments

Talking revolution with John Sinclair, discussing the state of Ypsilanti schools with Superintendent Ben Edmondson, and exploring the bummercore world of Cash Harrison … on this weekend’s edition of the Saturday Six Pack

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After our long vacation, the Saturday Six Pack will be back on the air this weekend with poet, activist John Sinclair, the former manager of the MC5. While I’m sure we’ll talk at length about both his time with the “The Five”, and the ten year sentence he received for selling two joints that made him a household name in the late ’60s, I’m hoping that a good deal of our hour together can be spent discussing the founding of the Detroit Artists Workshop, his work at the Fifth Estate, his co-founding of the White Panther Party, and the evolution of Trans-Love Energies, his commune which moved from Detroit to Ann Arbor in the late ’60s. [The buildings which housed Trans-Love Energies, still stand at 1520 Hill Street, and are now known as Luther House.]

And, of course, I’ll also be sure to ask him about this recent exchange I had with Brendan Toller, the director of new documentary about Danny Fields, the man who signed the MC5 to Elektra.

MARK: In ‘68 or so, Danny became a DJ at WFMU, and it was there, according to legend, that he was told by another DJ that he had to check out the scene around Detroit, setting in motion a chain of events that would bring both the MC5 and The Stooges to the national stage. I’m curious as to what he may have told you about that first trip he took to Ann Arbor / Detroit.

BRENDAN: Danny had actually been out to Ann Arbor previously. He wrote a bad check to follow the Velvet Underground. Danny saw the Velvets play the Student Union Ballroom at the University of Michigan, where, just years later, he would see the Stooges for the first time. He was tipped off by Bob Rudnick and Dennis Frawley, who had a show called Kokaine Karma on WFMU, that the 5 were a hot band. I know Danny was taken aback by the energy and endless will of John Sinclair and the 5; barking orders off the toilet, women serving men food, pounding on the tables like Vikings, printing presses. It was its own self-contained focused, politically-driven, hype machine years before bands did all their copy and publicity..

LeniHillTo give you a sense of what was happening at the time in Ann Arbor, here’s a clip from a September 4, 1971 article written by Leni Sinclair for the Ann Arbor Sun, the anti-establishment newspaper of the White Panther Party. [See right.] At the point this article was written by his wife and collaborator, John Sinclair was a little over two years into his ten year prison sentence. Little did anyone know, just a few months later, thanks in large part to the intervention of John Lennon, who had come to Ann Arbor to appear at the now legendary John Sinclair Freedom Rally, the Michigan Supreme Court would step in and order that Sinclair be released. Here, with more on that, is a clip from a much more recent article, also written by Leni Sinclair on the subject of their legal troubles at the time.

…On December 10, 1971, John Lennon and Yoko Ono came to Ann Arbor to headline the historic John Sinclair Freedom Rally at Crisler Arena. And just three days later, on December 13, 1971, John walked out of Jackson Prison after having served two and a half years already. But he was not yet a free man, because in the fall of 1969, shortly after he was sent to Marquette Prison in the Upper Peninsula to start his 9-1/2 to 10-year sentence, John and two other White Panther leaders were indicted by the Federal Government for conspiracy to blow up a clandestine CIA recruiting office in Ann Arbor. A conviction on that charge could put him back in jail for another 15 to 25 years. And our little band of White Panther hippies on Hill Street, which was just beginning to organize the fight to free John Sinclair from his 10-year marijuana sentence, was suddenly faced with an even bigger Goliath in the form of the CIA, the FBI, the US Justice Department, and the whole Nixon administration.

Paranoia struck deep. We believed that our house was bugged, and that our phone was tapped. So we started holding our important meetings to plan our defence strategy under a tree in the park, thinking that we were safe from the uninvited ear. Only 20 years later did we learn that there was one among us, living with us at 1520 Hill Street, who regularly wrote reports about us to the FBI. To this day we don’t know the identity of that informer. But just knowing that the government planted an informer among us certainly puts a big chill on the idea of ever wanting to live in a commune again.

With the help of some of the best lawyers in the country we won that case in the US Supreme Court, too… The unanimous decision of the Supreme Court in that case ensured that the 4th Amendment to the Constitution that protects citizens against warrantless wiretapping or searches remained the law of the land. This was a pivotal case for the future of American Democracy, because without the protections guaranteed by the 4th Amendment, the Constitution would not worth the paper it’s printed on.

After losing this case, the Justice Department dropped the charges against the indicted White Panther Party leaders, and John was finally a free man. To all the people who lived and worked together in the 1510/1520 Hill Street commune, whether I can remember all your names or not, I want to say that you are every bit as important as John Sinclair and John Lennon. Without you it could not have been done. To you and to all of our supporters far and wide I want to say, “Thank you for helping free my husband and for helping keep our country free.”

So, if you’ve enjoyed my conversations over the years with the likes of Alan Haber, the first president of Students for Democratic Society (SDS), and Tom Hayden, be sure to tune in during the first hour of the show, during which we’ll be going deep on the subject of ’60s Ann Arbor.

Oh, and if you get a chance before then, read Sinclair’s original liner notes from the Kick out the Jams album. Here’s a taste. It should give you a pretty good sense of what his politics were at the time, “mother fuckers”. [Read page one. Read page two.]

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And, during our second segment, we’ll be having a few beers with YCS Superintendent Dr. Benjamin Edmondson, who bet me a six pack during episode 22 of the program that, within a year, Governor Snyder would be visiting Ypsilanti Public Schools. While I didn’t intend to hold Edmondson to it, he called me a little while back, acknowledging that I’d won, and offering to come in and make good on his promise. So, at 7:00, we’ll be catching up over beers, discussing the current state of our schools. So, if you have any questions, please feel free to call in. [The studio number is at the bottom of the page.] I’ve got a few things to ask him about… but we’ve got time to get into a lot of other things.

Then, during our final segment, if all goes according to plan, we’ll welcome Cash Harrison into the studio to play a few songs, and chat with us about whatever it is that’s going on in his life right now. I wasn’t able to attend, but I’m told that he did a great job a few weeks ago at our mutual friend JT’s porch show, and I’m looking forward to hearing him play for myself… As for what his stuff is like, JT describes it as having an “almost old school country singer songwriter sensibility”. Harrison, when asked to describe what he does, refers to it, however, as “bumercome.” I guess we’ll see.

FOR THOSE OF YOU WHO HAVE NEVER TUNED IN TO THE SIX PACK BEFORE, HERE ARE THE DETAILS ON HOW TO LISTEN:

Unless you live inside the AM 1700 studio, chances are you won’t be able to pick the show up on your radio. As that’s the case, I’d recommend streaming the show online, which you can do either on the AM1700 website or by way of TuneIn.com.

And for those of you who aren’t yet familiar with the show, and need to get caught up, you can listen to the entire archive on iTunes.

Oh, and if you’d like to tell your friends and neighbors about the program, feel free to share the Facebook event listing.

And, here, thanks to AM 1700 senior graphic designer Kate de Fuccio, is this week’s poster, in case any of you want to print copies and leave them at one of your favorite highway rest areas.

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And do call us if you have a chance. We love phone calls. So please copy down this number and slide it into your sock – 734.217.8624 – and call us between 6:00 and 8:00 this Saturday evening. The show is nothing without you.

Posted in Ann Arbor, Art and Culture, Civil Liberties, The Saturday Six Pack, Uncategorized, Ypsilanti | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 4 Comments

Just how high are the taxes in Ypsilanti anyway?

193nt5As several people have pointed out over the past few weeks in relation to the Water Street debt reduction millage which was recently defeated at the polls, the people of Ypsilanti already pay a much higher tax rate than those who live elsewhere in the region. In hopes of finding out why that is, I thought that I’d ask a few folks who I thought might be able to offer some insight. What follows is my conversation with former Ypsilanti City Planner Richard “Murph” Murphy, Ypsilanti Director of Economic Development Beth Ernat, and Ypsi City Council member Brian Robb.

MARK: As of right now, what can the typical Ypsilanti homeowner expect to pay in the way of taxes? For the purposes of our discussion, let’s assume we’re talking about a house that someone just purchased this past year for $100,000.

MURPH: A homeowner in City of Ypsilanti pays 35.0727 mills in City taxes. This includes the general operating millage and the dedicated millages: transit, sanitation (trash/recycling), police and fire protection, and local street repair bonds. Ypsilanti homeowners also pay another 32.4252 mills to other various entities including Washtenaw County, Ypsilanti Community Schools (YCS), the Ypsilanti District LIbrary (YDL), the Washtenaw Intermediate School District (WISD), the Ann Arbor Area Transportation Authority (AAATA), Washtenaw Community College (WCC), and the state education fund. [Source: City of Ypsilanti Treasurer.]

MARK: So, when you add it all up, what does that come to?

MURPH: 1 mill = $1 per $1,000 of taxable value. And the taxable value of a property is assessed at half of “market” value. So your hypothetical homeowner, who purchased a property for $100,000, would be taxed based on a value of $50,000… Here’s the math:

$50,000 / 1,000 * (35.0727 + 32.4252) = $3,374.74 in taxes.

MARK: So, if you just moved to Ypsilanti this year, and paid $100,000 for a home, you should expect to pay 3,374.74 in taxes your first year?

MURPH: Yes, and someone who has owned their home longer would pay less, because a property’s taxable value doesn’t rise as fast as its market value… It might also be worth noting that rental property anywhere in the State pays an extra 18 mills.

MARK: And how does that stack up against communities elsewhere in Michigan?

MURPH: It depends on who you’re comparing us with. Within Washtenaw County, Ann Arbor residents pay 16.3003 mills to the city + 25.8754 mills to other entities, or 42.1757 mills total. So, if by some miracle, you found a $100,000 house in Ann Arbor, you’d pay $2,198.79 in taxes. Using Zillow’s numbers for median home value in each city, though, the median new homeowner in Ann Arbor will pay $6,705.94, vs. the median new homeowner in Ypsilanti paying $4,606.73. Saline has 16.28 local mills, and 45.0289 mills total, so a median new homeowner there would pay $5,108.53.

MARK: So, while it’s true that our tax rate is higher in Ypsilanti, it’s also true that, on average, we pay less in taxes than elsewhere in the county, given that houses here tend to sell for less.

MURPH: Yes, but people are right when they say that Ypsilanti has among the highest local millage rates in the state. It’s also true that Washtenaw County has higher than average taxes.

MARK: And it’s not just Saline and Ann Arbor that we’re higher than. Online, in a recent discussion about our Ypsilanti tax situation, someone posted the following: “Not everyone is willing to live in hipsterville if they can move a block out of the city and pay $600 less a year in taxes.” Leaving aside for a moment his comment about “Hipsterville”, the person who wrote this is correct about the significant tax savings that can be had by purchasing a home in Ypsilanti Township, just a few feet outside of the city, right? What accounts for that difference between city and township taxes?

BRIAN: Well, there are structural reasons why the millage rate is high in the city, but the high millage rate is also due to decisions we’ve made as a community.

Somewhere in the distant past, voters adopted a fire and police pension millage that will be 7.8415 mills in FYE 2017. And, in 2001, the voters passed a road millage that will account for 4.5866 mills in FYE 2017. And, in 2010, we overwhelming supported a 0.9789 mill increase for public transit. If we pass the Regional Transit Authority (RTA) and Washtenaw County road millages this November, we’ll be adding another 1.7 mills to our annual tax bills.

Some of those decisions were questionable. For example, back in 2004, City Council adopted new fire and police labor contracts that increased the retirement multiplier from 2.5 to 3. The Council seated at the time made this change retroactive. Not to get into the weeds too much, but, in 2003, the fire and police pension was overfunded by $4.9 million. In just two years, the system was underfunded by $1.6 million. That’s a swing of $6.5 million. Today the pension is underfunded by more than $15 million. That’s the biggest reason our millage rate has increased from 1.7197 in FYE 2005 to 7.8415 in FYE 2017. Given the opportunity, I’d like to think the Council, as currently constructed, would not make that same mistake.

You could also argue the road bond was a poor decision. The local streets were allowed to deteriorate to the point they all needed replacing at the same time. The road bond millage raised $16,930,000. The problem is that money was all in-hand at once, but the construction couldn’t all be done at the same time. As a result, a significant portion of that revenue was used to pay interest on the debt resulting in a higher millage rate. It was important to fix the roads, but the millage as executed was the wrong mechanism. Again, I would like to think the Council, as currently constructed, would not make that same mistake if given the opportunity.

MARK: So it’s not just that we’ve got an aging city, and state revenue sharing is drying up… You’re suggesting that, to some extent, our current tax rates can be attributed to poor decisions in the past.

BRIAN: Right, but it should also be noted that Council has done some good things that are saving us money. The transportation millage of 2010, for instance, was a genius creation thought up by Council member Murdock. It preserved busing and led to the City (and eventually the Township) joining the AATA. And, ultimately, it led to the expansion of bus service throughout the AAATA service area.

BETH: I would also add that, in Michigan, we’re living in an era of al la carte government. With reduced overall revenue sources, city governments no longer determine the types of services that are offered. Instead, the services are dictated by millages decided by the people. As was mentioned earlier, the voters decide what types of transportation services are available, if parks are created, and if recreation services are offered. Voters also decide how they fund employee pensions, as well as what types of police, fire, and ambulance services are available. In the past, when revenues were available, all of these services had been provided for by our traditional cities. That was the main difference between city and township types of government. The urbanized cities had transportation, parks and recreation, libraries, arts and culture, sidewalks and paved streets. In today’s economy, what you get is dependant on how many mills a city or township can change, and what the voters choose when the options are provided.

MARK: Murph, do you have anything to add on the subject of why our tax rate is so high in the City of Ypsilanti? Are there statewide patterns that we should be talking about?

MURPH: Yes, Brian mentioned “structural reasons,” and a lot of this has to do with the dynamics we’re seeing statewide – Ypsilanti is not unique. Look at SEMCOG’s report “Running on Empty” from 2014, or Michigan Municipal League’s “SaveMICity” website, especially the report “Michigan’s Great Disinvestment” by the former head of the Michigan House Fiscal Agency. Both of these outline the fiscal straitjacket that Michigan has put local communities in, especially with the combination of the Headlee Amendment and 1994’s Proposal A. (For transparency, MML is my employer.)

The big takeaway from those is that, no matter how fast home values go up, or how many new businesses open downtown, cities’ property tax revenues can only go up by the rate of inflation every year. Which means, in real dollars, the revenue the city collects from an existing millage never goes up. In a down market, though, it can drop 5%, 10%, whatever in a year – there’s no floor, and then the cap is reinstated at that lower level. The only way around this is new construction, or new millages.

MARK: And this is exacerbated in Ypsilanti because so much of our property is owned by non-tax-paying entities.

MURPH: Yes, we’re hindered by the amount of non-taxable property we have: state and county offices on Michigan Ave, the school properties, the churches, parks, etc. Our taxable value per capita is a lot lower than some nearby communities, so we have to pay higher rates to get the same revenue. And we have to provide services to those destinations (police and fire protection, maintaining roads for traffic to them, etc.) but they don’t bring in income. (The state is supposed to reimburse locals for fire protection to state-owned properties, but they’ve been shorting those payments by about 50% for over a decade.)

Many cities host non-taxable regional destinations, but EMU’s campus is our unique piece, for how big a portion of the city it takes up. In bigger college cities like Kalamazoo or Ann Arbor, the much larger size of the city reduces the impact of campus some. In other small college towns like Albion or Big Rapids (Ferris State) where the campus makes up a similarly large part of the city area, they use income tax to make up the difference.

BETH: Adding on to what Murph is saying, we should also note that EMU is our biggest economic development opportunity. The school creates jobs in the city and region, provides education, and generates traffic All three of those items are necessary when building a business ecosystem in a community. However, EMU does account for 40% of the land area in the city. And, if you include the schools and other non-tax paying entities in the community, the tax base is reduced by another 10%, bringing the total to 50%. All of these entities still require city services, police, fire, roads and plowing. The tax rate is based on the 100 percent of the City, therefore, the other taxpayers have to make up the difference in their taxes. When there are more taxpayers, the tax burden on individuals is spread more evenly.

MARK: Speaking of schools, we should probably acknowledge the fact that home value to a large extent is a function of a school district’s perceived quality, correct?

MURPH: Yes. When the County did their regional equity analysis a year or two ago, and the consultant was pressed about the potential impact of schools, he gave an off-the-cuff estimate that putting Ypsi into the Ann Arbor school district would “overnight” raise the value of every residential unit in the Ypsi school district by $10k-$40k, just from the relative perception of the school districts.

The schools are also a factor in terms of the value of individual properties. Homebuyers pay for perceived school district quality–often even if they don’t have kids themselves. When I try to recruit friends to move to Ypsilanti, local complaints like taxes or crime fears are never the deal breaker for them–they move to Ann Arbor or Saline for the school district. It’s probably the biggest factor in why Saline’s home prices are nearly twice Ypsi’s, feeding that taxable value per capita equation.

MARK: OK, let’s talk a little more about the effects of Proposition A and the Headlee Amendment on aging cities like Ypsilanti.

BRIAN: Prop A and Headlee are killing everyone… not just those of us in aging cities. After the housing crash, the City lost 35% of its property tax revenue in two budget cycles. Even as values continue to rise, our tax revenues barely increases. Taxable value cannot increase more than the lesser of 5% or the rate of inflation. Last year the assessment on my house went up over 10%, but my taxable value only increased by 1.5% (compared to less than 0.5% city-wide). At it’s peak, my house had a taxable value of $60,900 in 2008. If my taxable value increases 1.5% a year, it will take until 2044 until my house has the same taxable value as before the crash.

MURPH: Right, Headlee and Prop A hit everybody, and the only way around those limits without adding millages is new construction. That’s where older, “built-out” cities face an extra challenge: they don’t have farmland to build on in order to add that new construction taxable value; they have to try to upcycle existing properties, and deal with the brownfield and other challenges that come with that. (This is where Water Street came from.)

MARK: As an illustration of that, I’ve heard that property tax revenues only went up something like $11,000 in fiscal 2016, right?

BETH: To start with, property taxes are always calculated one year in arrears. So when we are discussing this year, the 2016 fiscal year, we are working off of 2015 taxes. The tax increases for 2016 are minimal to the City revenue, but they show a better fiscal vision of the future than not. As with any loss, the rebuild will take significantly longer. The 2008 downturn and recession was partly caused by overinflated property values. The creep in tax revenues is a more realistic outlook on where the property tax revenues should be. That being said, it does not help the City and the financial realities of provided services without an increasing revenue stream.

MURPH: And even when a property sells, and the taxable value “pops up” under Proposal A, that doesn’t yield an increase in revenue for the city. Under Headlee, the city’s revenue is still capped, so having properties pop up during sales means the millage rate has to be reduced to keep revenues at the rate of inflation. The good news there is that having property values increasing and lots of properties selling at those higher values will reduce the tax rate…but not increase the city’s budget.

MARK: Let’s jump back for a minute and talk a little more about revenue sharing from the state. How have things changed on that front over the past few decades?

MURPH: Over the years, the State of Michigan has strictly limited local communities’ options for raising revenues; in exchange the state was supposed to provide funding through “revenue sharing”. The idea was that the state would take care of collecting funds and then distribute them out to the locals, and be more efficient than having the locals collect these taxes. Starting in 2002, though, the state has gone back on those promises, and hasn’t paid the full amount in any year since then. From then until 2015, the state has shorted the City of Ypsi by about $10.5 million in total. Currently they’re shorting Ypsi about $1.26 million / year–which would be more than enough to cover the Water Street payments. (MML has a calculator online that you can look up other cities.)

For more on this, see Citizens Research Council’s 2015 report, Reforming Statutory State Revenue Sharing, especially the section “Promises Made” starting on page 15.

MARK: As one of you mentioned earlier, the only real option to increase your tax base in a significant way is through new construction, which Michigan’s older cities, like Ypsilanti, can’t easily do, given that we don’t have a lot green space to expand into.

BETH: Yes, this is true. Ypsi only has about a dozen greenfield sites, if that. We have no room for expansion or mega subdivisions. Industrial parks and properties are also great ways to increase the tax base and diversify the tax base. Cities that have had long term success through many economic downturns tend to have diversified tax bases, that is the right mixture of commercial, industrial, multifamily and single family. However, older cities prided as bedroom communities and communities with industrialized niches have been hardest hit by revenue sharing, reduction/elimination of personal property tax, and Michigan’s overall tax structure.

MARK: And, it’s probably worth noting, this is why, a few decades ago, our Mayor and City Council decided that, as we didn’t have large parcels of development-ready property available, we should buy-out the largely industrial businesses on Water Street with the intention of bringing new, higher-value construction downtown…

MURPH: That’s my understanding, yes – as early as the mid-80s, the city was looking at Water Street as an opportunity to replace blighted, low-value property with higher value development. (See the 1985 comprehensive development plan for that era’s version of the project.) I wasn’t around for the first 20-some years of discussion, though, so can’t say well what other motives were there or how the plan evolved during that time.

Because construction is the only way to grow revenue, and Ypsilanti doesn’t have miles of cornfields to build on, Ypsilanti does need to support “up-cycling” of properties – but Water Street demonstrates the risk in having the city manage land assembly, and in having that done in such large chunks.

MARK: So, where does that leave us, especially relative to the Water Street debt, which is going to require that we start paying something on the order of $700,000 a year. I’ve heard from a number of people that they’d like to support a millage, so that we can pay off the debt, but they’re afraid that, by doing so, we’d discourage new home ownership in the city, as “the taxes are already too damn high.” What’s the solution?

MURPH: Good question. If no new millages, cuts are the easiest fix to think up, and probably need to be a part of a solution. Some things might also be restructured or done differently–there was a discussion of combining police and fire into a public safety department a few years ago, and before that there was an analysis of using the County Sheriff instead of a standalone police department; I don’t know if either of those offered significant savings, but it might be time to revisit those ideas.

I’d most like to see us think about development as a way to increase the revenue per mill, though. Water Street is obviously a big part of that, and the city has other vacant properties available for sale. Somehow finally getting the Ford plant owners to do something with that 80 acres would be good. Getting revenue up and tax rate down probably needs a lot of small projects to happen too, though. The new neighborhood enterprise zone to help support reinvestment in the neighborhood south of Michigan Avenue was a great step in that direction. We’re still limited by lack of vacant land, as Beth noted, and with most of our taxable land area limited by zoning to single-family homes, there’s only so much upcycling we can do – it takes a lot of people doing $50k additions on their houses to create significant new revenue.

[note: If you’re interested, our last conversation about the Headlee Amendment and Prop A, can be found here. And, if you want to make your own “too damn high” image, you can do so with the Jimmy McMillan meme generator.]

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