Budget challenges topic of Ann Arbor City Council retreat
The Ann Arbor City Council will meet for a special all-day retreat on Saturday to talk about budget challenges facing the city.
Tom Crawford, the city's chief financial officer, said the meeting will include an updated budget forecast presented by City Administrator Roger Fraser. The last time Crawford offered a financial outlook in August, he said the city could potentially face a $5.8 million deficit in the next fiscal year beginning July 1.
Tom Crawford, Ann Arbor's chief financial officer, offered a report to the City Council in August, warning of a looming multimillion-dollar budget deficit. Ryan J. Stanton | AnnArbor.com
The retreat will mark the start of budget deliberations for 2010-11. City officials also plan to discuss priorities for the next year.
"We plan on covering where we are financially, kind of the status for 2010," Crawford said. "I had talked with council back in August about some concerns we had about revenue, so we're going to be updating them on that and giving a status report."
By the second City Council meeting in April, the city administrator is expected to present a proposed budget for 2010-11. The council is expected to act on the budget by its second meeting in May.
Cost-cutting proposals currently on the table include laying off 14 firefighters, shuttering the city's senior center and closing Mack Pool.
Mayor John Hieftje said the loss of pharmaceutical giant Pfizer in Ann Arbor meant the loss of 4.75 percent of the city's property tax revenue, which dealt a heavy blow to the city's general fund budget.
"Ann Arbor is maybe a little better off than other cities in the state, but we're all in the same situation to some extent," Hieftje said. "The combination of falling property values and state revenue cuts are really starting to take a toll over time."
Saturday's retreat will be held in the main conference room at the city's W.R. Wheeler Service Center, 4251 Stone School Road. The meeting is expected to last from 8 a.m. to 4 p.m.
Ryan J. Stanton covers government for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529.
Comments
LT
Tue, Dec 8, 2009 : 9:40 a.m.
It is time that the Finance Director expose the discrepencies and costs for running this town.Now is the time to plan for an aggressive move forward to remedy the picture.
Gill
Fri, Dec 4, 2009 : 1:47 p.m.
Get back to work? Doing what? Where?
HappySenior
Fri, Dec 4, 2009 : 9:30 a.m.
Property taxes are paid by landlords, so if students rent, they pay taxes, too. A city income tax will not pass. Responsible people will not vote for it. Until people in this country, this state, and Ann Arbor get back to work and repay the emergency funds they are living off of now, government must provide the basics and put the unnecessary spending on a shelf.
GoblueBeatOSU
Thu, Dec 3, 2009 : 7:06 a.m.
Thanks Ryan for the additional information. I'm sure Crawford did say property and income taxes are the only options. That was to be expected...and is the problem with Michigan's government. It seems almost everyone in government will only look at ways things use to be done. The people in government will never look at a new approach. Most everyone agrees the current tax collection process is broken, but our elected officials don't seem to want to fix it. Thanks again. I'm glade to hear you approached Crawford with the question, even if the answer was what we expected.
racerx
Thu, Dec 3, 2009 : 2:49 a.m.
Vivienne Armentrout-so council memebers can't turn lights off & on? They need to pay overtime to a Union staff person to do this? What a cheap shot! Oh, and by the way, with a potential deficit of $5.8M and you call this "good value" from council? LOL! If A2 was so "green" you'd think there would be motion sensors already on those lights in the buildings, oh but gee, I've must have said something sinful, since only Union staff can only turn lights on & off. If that's the thinking of your version of council, it's no wonder the city is potentially $5.8M in the hole.
Diane
Wed, Dec 2, 2009 : 11:40 p.m.
In answer to the idea of a tax on students, "since they use city services and should pay for them" - what about those students who DO pay local taxes? I, and many of my fellow graduate students, are homeowners in Ann Arbor. Therefore, we pay property taxes, just like everyone else who lives here. And if you were to say that students who own a home could somehow get out of paying the tax, what about those students who rent off-campus housing? The owners of the residence pay property taxes, which is passed on in the students' rent. As for students who live in campus housing, how many services do they really use? If they don't have a car, they don't use the roads; trash pickup is taken care of by the university, since it's university housing; and campus has its own security people. Perhaps, as a source of income, the city could consider requiring anyone who lives in Ann Arbor for over half the year (e.g., students as well as permanent residents) to register their car, get a sticker, and pay a modest fee. That would help pay for the roads, and place the burden on those who actually do use them. If fire and police services are extended to campus housing, that should be an issue negotiated between the university and the city.
MjC
Wed, Dec 2, 2009 : 5:37 p.m.
Just try and imagine what the City of Ann Arbor would be without the University of Michigan (including the medical hospitals) before you propose a 1% tax on this institution. The Council needs to work harder at attracting new businesses, not focus on punishing the UofM (or any other business in A2) for being successful.
Vivienne Armentrout
Wed, Dec 2, 2009 : 5:29 p.m.
"reality", many city council members have a "day job". Council is not considered a full-time job. I'm not sure of the exact figure, but it pays somewhere between $15,000-&16,000 per year with no benefits. The only cost to taxpayers is overtime for union staff who have to turn the lights on and off. I'm sure that high-level administrators who are present will not be taking overtime, so we are getting good value from them for the week.
reality
Wed, Dec 2, 2009 : 3:50 p.m.
Another part of the problem is the Ann Arbor City Council!! Why do they need a special Saturday retreat??? How much extra unnecessary spending is that costing the taxpayers of Ann Arbor? How about doing your paid job during regular business hours like the rest of us!!!
Eric64
Wed, Dec 2, 2009 : 3:43 p.m.
Well People the city is five point eight million in debt. But The Mayor and city council keep spending money like it is candy.Does it make sense to anyone to spend money you do not have.Come on people the city council and Mayor need to stop spending money the city does not have.
Really?
Wed, Dec 2, 2009 : 10:02 a.m.
I find it intersting that they are facing, I'm sorry... POTENTIALLY facing a $5.8 millon deficit. Although, according to a city hall employee, the city came up with an extra $5 millon for the existing city hall structure. Not the new one, but the existing one for what they called 'last minute updates'. Now, I'm not politician, mainly because I can't lie as well at them. But $5 millon for their pet project... $4.5 Millon for a new recycling center... MILLONS in what the city calls their "rainy day fund" BTW, I'm curious how many are turning in over time for this 'retreat'. Folks, this city is jumping on the band wagoon of cities who are truly in trouble.
tdw
Wed, Dec 2, 2009 : 9:57 a.m.
tax tax tax till everyone leaves
Blue Eyes
Wed, Dec 2, 2009 : 9:51 a.m.
Wonderful idea! In case "blues" hadn't noticed, many high school grads are leaving Michigan anyway. $27 is the cost of a couple of pizzas and if out-state students can afford the tuition, $400 is not going to break them either. I'm sure the seniors, low-income and out of work locals would appreciate any break they can get.
blues
Wed, Dec 2, 2009 : 9:34 a.m.
A tax on tuition - what a horrendous idea. "Students use city services and should pay for them." - When are people going to learn that the question with taxes isn't about what a person's "fair share" is, or what people "should" pay for, the question is about how people will actuality react to it. This is a real good way of encouraging Michigan high school students to leave Michigan and go elsewhere, or discouraging out-of-state students from coming. Apparently, after the vast majority of the economy has died in Michigan, we should go ahead and kill the few remaining things that are doing well, i.e. entertainment and sports through a ticket tax, education through a student tax, etc. The State of Michigan needs more taxes RichRod needs another 3-win season.
Ryan J. Stanton
Wed, Dec 2, 2009 : 8:55 a.m.
I ran the tuition tax by Crawford a couple of weeks ago. His response was that it's an interesting proposal Pittsburgh is reviewing but appears to impose a tax only on students and may not be a legal alternative in Michigan. It sounds like the city of Ann Arbor is still strongly considering going before voters next year with an income tax proposal instead, which needs City Council approval first. "The tax system in Michigan is not working for cities across the state," Crawford told me. "As our community talks about what taxes it's willing to pay for to support the kind of community we have, something that doesn't fall on just one group of people is likely more sustainable. Property taxes and a local income tax are the only two options the state permits cities to implement."
zollar
Wed, Dec 2, 2009 : 7:44 a.m.
Excellent Idea!
Brian Kuehn
Wed, Dec 2, 2009 : 7:44 a.m.
The Pittsburgh idea mentioned by "Goblue" has merit if state law allows such a tax. Unfortunately, right now is probably not a good time to float this concept. The state is going to be cutting back support to state universities and that is usually followed by increases in tuition. Still, this approach represents the kind of creative thinking that is needed to solve our difficult problems.
GoblueBeatOSU
Wed, Dec 2, 2009 : 6:26 a.m.
I am usually against taxes but I like this idea out of Pittsburgh. Pittsburgh is proposing a 1% tuition tax on local university and college students. "The "Post Secondary Education Privilege Tax" or "Fair Share Tax" is justified, the city argues, because the students use city services -- roads, police and fire protection -- and should pay for them. Moreover, the city contends that the tuition tax, which would range from $27 for students attending Community College of Allegheny County to $400 for those attending Carnegie Mellon, amounts to a small charge for services." About 40%+ of U of M students aren't from the State of Michigan. This tax is on tuition so it would add about $150 to an in state student's bill per year, maybe less depending on their actual tuition bill. It doesn't tax room and board. "One of the problems facing Pittsburgh, and other municipalities with a large presence of nonprofit institutions, is that much of the property within city limits is tax-exempt. Pittsburgh officials say about 40% of its property is tax-exempt."..does that not sound like AA. I know this is creating a lot of debate in Pittsburgh. Has AA ever looked at this? Factor in the higher tuition cost for out of state students and over 50% of the tax revenue would come from out of state students. http://online.wsj.com/article/SB125963361940670699.html