Staying alive: Ann Arbor's income tax proposal and concerns about it
Ann Arbor City Council appears ready to delay a vote on the proposed city income tax, so we'll have longer than the Aug. 17 deadline to hash out whether it makes sense for the city.
Taking the extra time is a good call. The income tax a complex topic, yet a recurring one in Ann Arbor. This go-round comes up as officials say they can generate a net $7.6 million in additional revenue.
Officials say they may bring it to voters after studying it further - so we still have to brace ourselves for that.
In the meantime, here are my top five concerns as Ann Arbor keeps the issue alive:
1. The townships aren't considering an income tax. We already have a tax rate disparity that makes a difference for some people and businesses. It's time to share services,5 not set the city at a competitive disadvantage - and that's how the average person will consider the tax.
2. It's the municipal version of jumping the shark. An income tax may work on paper, but who sees it distinguishing - in a positive way - Flint? How about Highland Park? Detroit?
3. Do we even want to pay for existing services? We pay more in the city and we're told that covers higher service levels. But residents seem satisfied in the lower-cost townships. Let's evaluate our spending priorities first.
4. It will affect more than the University of Michigan. Getting some cash out of U-M's 37,000 employees may be the underlying driver of this proposal - especially after we all watched U-M buy the former Pfizer property. It feels a little punitive for the rest of us, too.
5. Ann Arbor is uniquely positioned in Michigan to attract jobs. How hard will it be to brand the city as an economic destination while we're charging people for the privilege to work here?
Comments
Ravella Ryder
Sat, Sep 5, 2009 : 5:48 p.m.
It may be fashionable to rag on the U-M but check out the community benefits from the Health System: http://www.med.umich.edu/comben/ These are the programs that will end up at risk if the taxes get too out of whack. You know, University of Colorado moved its entire Medical Campus out of Denver. 17,000 jobs left the city. Ann Arbor, would you miss the Health System if it moved up to Flint or out to Dexter? http://www.ucdenver.edu/about/denver/Pages/AnschutzMedicalCampus.aspx
utownie
Sun, Aug 16, 2009 : 7:11 a.m.
A nice summary of concerns. 1. Other than fire service where payment is based on a state law, what service does UM get from Ann Arbor? 2. UM pays for its own police (50+ members) who serve our community, pays for 25% of the City water system (including exponentially graduated charges for larger piping), has its own bus system free to all of us, pays for City road repair adjacent to UM property, to name a few examples) 3.UM pays the AATA fare for all UM riders ($2 million +). What other employer does that? 4. It was Pfizer who left the community and the property sat vacant for 2 years before UM purchased it to hopefully create jobs where people will buy homes, food, pay property taxes once again, etc. There was no other purchaser that would have used those facilities. 5. When we attend a concert at Hill Auditorium, go to the university library, -- an out of town student or professor pays rent to live in one of our houses, buys food, etc --, we walk through the Arb, use one of the world's finest hospitals, we also receive a benefit in return. The relationship is mutually beneficial.
local
Fri, Aug 14, 2009 : 7:16 p.m.
So people who don't live in Ann Arbor, yet work here will be taxed, yet won't have much say or a way to vote on being taxed. Doesn't seem very democratic to me!!
Paula Gardner
Fri, Aug 14, 2009 : 4:59 p.m.
Here's the AnnArbor.com version of the Chamber of Commerce survey: http://www.annarbor.com/news/government/chamber-of-commerce-survey-reveals-concerns-with-ann-arbor-city-income-tax-proposal/
a2grateful
Fri, Aug 14, 2009 : 4:31 p.m.
This following phrase is so old, and repeated so often, that it may have become invisible; however, it contains an idea that was the basis of the formation of our country: "No taxation without representation."
David Cahill
Fri, Aug 14, 2009 : 3:36 p.m.
The Ann Arbor Chamber of Commerce issued a news release today (which was sent to AnnArbor.com) saying that 74 percent of their members surveyed indicated they would not support the creation of a city income tax. Fifty-seven percent said such a tax would affect their decision to work at a place of employment in Ann Arbor; 62 percent said this tax would impact their decision to operate or expand their business in Ann Arbor.
treetowncartel
Fri, Aug 14, 2009 : 1:31 p.m.
This is the chicken and the egg argument. I could posit that it is the University that made Ann arbor the town it is, and not Ann Arbor that made the University the University it is. What if the U of M actually ended up in Dexter? Which was actaully platted for it and the County Seat. Take a look at the right of ways on the roads out there, they are larger than Ann Arbors, it was supposed to be the hub of the County. I noticed in the article on the Firefly closing that the owner lamented about slow summers and that the money would get better when the students return. Clearly, the city needs the University more than the University needs the city. Maybe the city of Ann Arbor could put a tax on tuition paid by U of M students?
sottovoce
Fri, Aug 14, 2009 : 1:20 p.m.
Defeatist attitudes will get you nowhere. I'm not a city employee, and I am not an expert in city finance, but there is a millage for Parks (1.5748), street repair (1.9944), benefits (2.0560), AATA (2.0560), Refuse (2.4670), and others. None of these will decrease for AA residents, so commuters don't and won't pay for these services. I understand that commuters don't go to schools, go to parks, etc., but there is a reason a lot of businesses are here and a reason the AA economy isn't as bad as other cities (like where they live and can't find a better job). It's hardly quantifiable, so I'll call it "goodwill"...it's the value of AA beyond it's tangible assets. Our taxes help pay for this (social services, arts & culture, high education, low crime), and commuters receive a benefit which they don't pay for. A lot of residents think this is a free ride...it's hard to argue that it isn't.
zack66
Fri, Aug 14, 2009 : 12:58 p.m.
Since the city wants to tax those who work in AA but not live there, us "commuters", will we get to vote on it? If not, then we should not be enforced to pay it. As for the idea that we get all these great services for free, you are out of your mind! I drive in at 7:00am park my car in a paid garage spot, and drive home at 6:00pm. What I am getting, the prividge of walking down a trash strewn, graffitti tagged sidewalk? Wow how nice.
treetowncartel
Fri, Aug 14, 2009 : 11:59 a.m.
Exactly my point Tidge, they come in and out of the city on Roads and maybe they even spend some money at some places in town. I am curious as to how the U of M gets billed for their water/sewer use. Anyone know?
tidge
Fri, Aug 14, 2009 : 11:13 a.m.
I'm sorry folks: Commuters to AA are *not* ditching work to take advantage of Ann Arbor's recreational activities. They are not dropping their kids off at AA schools. Communters are not getting subsidized health care. They aren't getting library books. They aren't living at the Y. They aren't bringing their leaves and Christmas trees to be picked up at the curb. Fire and police protection: I think a slim case can be made there...but that's what BUSINESS (and Property) taxes are for, not personal income taxes. Street Repairs? Again I see a possible case, but only if Ann Arbor isn't using funding from other taxes (i.e. gasoline tax, state/federal income taxes) to repair and maintain roads.
treetowncartel
Fri, Aug 14, 2009 : 11:07 a.m.
How about making all the roads with a highway exit into Ann Arbor a toll road? there is more than one ay to skin a cat.
uawisok
Fri, Aug 14, 2009 : 10:50 a.m.
Midofleft has nailed it...the folks in the burbs want it both ways!! My guess is they are also the majority of teabaggers, screaming for lower taxes and better goverment services!
AAresident
Fri, Aug 14, 2009 : 10:32 a.m.
It's a reasonable idea for the city to tax the U of M. The university and the city share the town. Perhaps the university could contribute more than it currently does if it wishes to maintain services provided by the city. One of the problems in the proposed income tax is the cost of implementing it. Corporations would pay $3 million less, that's about half what they pay now. The city would charge $3 million to administer the tax. And businesses and residents would have to bear the cost of filing forms, bookkeeping, accounting, payroll services, and registration of all business with the city. When you add that up, approximately $6 million in direct costs and millions more for the cost of complying with tax on the part of businesses and residents, it seems a high cost relative to the amount that will go to the city's bottom line. I find it difficult to support the tax in it's currently proposed form.
Watcher
Fri, Aug 14, 2009 : 10:11 a.m.
Midoftheleft makes an excellent point. People are happy to live in the townships and pay low taxes and then work in a city where they pay no taxes. The commuters get city police and fire protection. They get the city street services. And they have access to the city's wonderful park system. All of that is subsidized by city property owners. An Ann Arbor income tax would have a huge difference from a tax in Flint, Detroit and Highland Park. That is because the City Charter requires that the operating millage portion of the property tax be eliminated in any year when an income tax is in effect. This tax cut applies to businesses and homeowners. An income tax is not hostile to the University. It is a matter of basic fairness.
sottovoce
Fri, Aug 14, 2009 : 10:05 a.m.
Anyone know where the $7.6m number came from? I know it's from a paid consultant report, but has anyone really looked at the assumptions and calculations? I'm trying. The model is too simple and doesn't represent a dynamic workforce and business environment, so I don't believe the $7.6m is accurate. Shouldn't there at least be a range of estimates? Best case, worst case, and best guess? Even if you believe the numbers, who are the winners and losers. Please name names (like McKinnley).
Jessica Kerman
Fri, Aug 14, 2009 : 9:18 a.m.
Nice job on the radio, Paula!
clark
Fri, Aug 14, 2009 : 8:43 a.m.
I've never really understood the dislike Ann Arbor politicians seem to hold for U-M and its employees. The latest issue seems to be resentment over the Pfizer property purchase which "removed" the property from Ann Arbor's property tax. Never mind the fact that the building was empty with no other serious buyers for nearly two years. In my mind, complaining about lost income just isn't fair if it's entirely theoretical. Now Ann Arbor wants to tax U-M employees (many of whom commute to town and receive no services at all from the city in return). I'm with Gargoyle: I've been loyal to Michigan throughout the whole decline of the last decade, but more and more taxes with less and less income opportunities for myself and my family year after year means I'm going to eventually jump ship for somewhere else.
Top Cat
Fri, Aug 14, 2009 : 8:23 a.m.
Anyone who walks around downtown Ann Arbor today cannot help but notice the large number of empty store fronts. The only guarantee from a city income tax would be more empty store fronts.
Gargoyle
Fri, Aug 14, 2009 : 8:20 a.m.
With Michigan in decline and my tax bill from all sources rising, this would be the last straw for a lot of people. An Ann Arbor income tax would be all I need to pick up and leave the state for one with no state income tax. Maybe that's the intent, to drive out any remaining small government, low tax individuals and truly make it a hippie, liberal paradise.