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Posted on Sun, Feb 10, 2013 : 5:59 a.m.

Mayor to ask: Will University of Michigan compensate Ann Arbor for lost property taxes?

By Kellie Woodhouse


An aerial image looking north on central campus in Ann Arbor taken on Wednesday, Feb. 6, 2013.

Melanie Maxwell I

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Mayor John Hieftje is looking for a "long-term solution" to a long-held problem of the city losing annual revenue each time the University of Michigan buys a property in Ann Arbor.

U-M's tax exempt status is written into Michigan's constitution, so the school is not required to pay property taxes on any of the property it owns.

When U-M purchases property —as it did recently when it purchased the Blimpy Burger property and neighboring parcel for $1.5 million— that land comes off the city's tax rolls, causing a drop in city tax revenue.


Ann Arbor Mayor John Hieftje

Ryan J. Stanton |

"We do need to have a serious conversation about the future of university purchases of land and what that's going to mean about the city long-term," Hieftje said in an interview.

Since 1999, U-M has purchased 29 properties throughout Ann Arbor, including the 174-acre former Pfizer property, which the university has turned into its North Campus Research Complex. When that property was purchased in 2009, 4.8 percent of the city's property tax base essentially disappeared.

"There needs to be a long-term solution. Otherwise it's inevitable that more and more real estate going off the the tax rolls is going to have a negative effect on the city's ability to fund services," Hieftje said.

The school this year has a $6.08 billion budget for its Ann Arbor campus. Hieftje is hoping a sliver of that money could go to the city. He plans to present a proposal to the city council soon, though specifics of the proposal are still being considered, he said.

One option, Hieftje said, would be to craft a proposal that would ask U-M to contribute a lump sum when it purchases property within the city.

Because U-M is tax-exempt, the city can't force U-M to pay a lump sum. It can, however, formally request that the university consider offering payment.

"I could see this building up to a resolution for council asking for a conversation about the issue," Hieftje said.


University of Michigan community relations director Jim Kosteva

Ryan J. Stanton |

In a few cities, tax-exempt universities will offer municipalities annual financial assistance in lieu of property taxes. Such programs are called PILOT (payments in lieu of taxes) programs. The payments are usually significantly less than the entity would pay in property taxes if it weren't exempt, but are nonetheless able to alleviate financial stress for municipalities.

For example, Brown University, which owns a physical plant worth more than $1 billion, offers Providence, R.I., a $4 million annual voluntary payment and has committed to give the city another $31.5 million over the course of 11 years. Harvard and Boston University give Boston multimillion dollar payments each year.

It appears that Michigan's other two large research universities, Michigan State University and Wayne State University, do not offer municipalities any form of payment in lieu of taxes.

Over the past two decades, city officials have discussed the possibility of U-M participating in a pilot program. Those conversations have been fruitless, involved parties say.

"It never goes anywhere," said Jane Lumm, an Independent council member.

"My sense is they don't see that as part of their role," Lumm said of the university.

Added Hieftje: "I don't think there's any way that the university will ever participate in a PILOT program. It's written into the constitution that they don't have to pay taxes."

However, offering a one-time payment upon purchasing land could be a less onerous burden than offering an annual payment.

U-M community relations director Jim Kosteva said the university has never seriously considered compensating the city for property tax losses incurred when the school purchases property.

Kosteva said the university has never been formally approached by the council, through a resolution, for compensation, although there have been informal discussions.

"Those topics do come up from time-to-time, but there is a difference between casual conversation and a more formal expression of the mayor or council," Kosteva said.

When asked if the university would be open to somehow paying the city in lieu of taxes, Kosteva replied: "Let's address a resolution or proposal if it is ever formally presented, as opposed to offering any speculation at this time."

City council member Margie Teall, D- 4th Ward, said she'd "welcome seeing" a proposal from Hieftje, although she's unsure whether it would gain traction at the university.

When the city sought financial assistance from U-M in paying for the Stadium bridges renovation, the university declined saying it couldn't use tuition dollars on compensating the city.

The solution instead of a payment: The university did allow the city to build easements on its property.

Kellie Woodhouse covers higher education for Reach her at or 734-623-4602 and follow her on twitter.


Gregory Bentle

Mon, Feb 11, 2013 : 5:31 p.m.

Is the city willing to reimburse U of M for all the economic benefits that come to A2 resulting from the growth of the university?

Joe Kidd

Mon, Feb 11, 2013 : 4:19 p.m.

Look at it this way. Your city gets smaller, less to take care of, spend your money on what is left.


Mon, Feb 11, 2013 : 2:37 p.m.

The U SHOULD compensate AA in some way for lost revenue as they continually remove properties from the tax rolls. The local state representatives should be pushing for this in lansing. The Lansing politicians will probably support the proposal out of spite for the U of M.

Patricia Lesko

Mon, Feb 11, 2013 : 2:25 p.m.

"Mayor to ask?" Who writes these headlines? This is not a story. This is not reporting. This is repetition of Hieftje's gibberish. I wrote this is an op-ed published in the Ann Arbor News in February of 2009 ( "In January, The Ann Arbor News reported that: 'The University of Michigan wants to help the local economy, but giving the city an in-lieu-of-tax payment isn't the way to do it, U-M President Mary Sue Coleman said.' Mayor John Hieftje responded to Coleman's comment by assuring taxpayers: 'We're going to continue to work on that.'" He said that in 2009. He campaigned against a PILOT program in 2010. In 2009 Hieftje was working as one of the highest paid UM lecturers in his class, a man with a B.A. from EMU, paid more than Ph.D.s and M.D.s. In the recent AA Observer, Council member Kunselman said he's running for mayor in 2014. Now, Hieftje's wringing his hands over this "serious" problem that could have been resolved a decade ago? For the past decade, our mayor chose to be bought off for $15,000 per course and a job for his wife, as well (both given after he took office). There are cities all over the country with PILOT programs that bring in much-needed millions. It's time for a PILOT program. It was time for a PILOT program in 2009. U of M won't participate? Harvard, Yale, Princeton, UC-Berkeley and hundreds of large universities in the country participate in PILOT programs. They want to close streets for student move-in? No. They want fire protection for free? No. They want garbage collection? No. They want water and sewer services? Not at the current rates. Steve Ranzini offers some great ideas, as well.


Mon, Feb 11, 2013 : 2:20 p.m.

It would be interesting to see a real economic imapct study done that assessed the delta of the cities tax base with and without the University of Michigan. I would bet the fact the Ann Arbor has UM generates substantially more property tax revenue than not having. If you look at the average home prices in other cities in S.E. Michigan, and use that as a proxy for A2 without UM, I bet A2 is better off with UM and its occupying the land it does (even if you assumed there were some number of households that could be built on that land, which I doubt would be the case becasue the demand to live in and around A2 is driven by UM's presence). If you look at the following table ( )you can begin to see the impact (also remember A2 charges higher base taxes than most of these cities too, think you could do that with UM?, just a question). A2 has an average value of $173k, Battle Creek $74k, Saginaw $61k, State average is $95k. Just saying that it is a not a correct assumption to believe that in this state, Ann Arbor would have any where near the same property values it currently has if it didn't have UM. I would also risk an assessment that we would also be more more efficient in how we spent money and ran the government if we didn't have such a large base (e.g. as others noted we wouldn't be buying farmland, investing in luxury libraries, subsidizing public transport, etc., etc. etc.). Let's see some real reporting, some real analysis and then have an educated debate on this topic.

Irwin Daniels

Mon, Feb 11, 2013 : 1:08 p.m.

I took a bit of time and looked at the Ann Arbor City Assessor's site; not including the AA public schools the Ann Arbor City owns and pays NO TAX on over 350 different properties in Ann Arbor. This list includes homes and other parcels. UM also owns a lot of the city - but before the "mayor" cries foul for taxes maybe he should look at his own tally sheet.


Mon, Feb 11, 2013 : 3:25 a.m.

Easy solution! Tax non-resident payroll tax - 1% Bar / Restaurant / Entertainmant - 1% This would solve all problems and bring down the insane property taxes that we all pay! 4K on my Summer taxes alone!

Vince Caruso

Mon, Feb 11, 2013 : 2:21 a.m.

Tax the sports complex and contacts, we all know it is not academic; PILOT or declare the main campus an historic district blocking any changes till funds made available to cover costs of being part of a city. Payroll tax is another option, as proposed by Roger Frazer. The UM should know most of the people who come to UM come not mainly for the UM but for the quality of life in AA. They are biting the hand that feeds them and don't seem to know it.

Joe Kidd

Mon, Feb 11, 2013 : 4:22 p.m.

3rd paragraph: you have it backwards.


Mon, Feb 11, 2013 : 2:09 a.m.

This lively debate is very heartening, to say the least. But, sadly, none of us will be able to decide anything from it. I recommend that we commission a high-powered consulting group--not from Ann Arbor, not even from Michigan!--to spend a few million bucks to sift through the "data," and present their findings to the the venerable City Council, et al. in, let's say, 5 years. By then, we'll all have forgotten what we spent the money on, and the tidal wave we now know as "Big Blue" will be a Tsunami! Gurgle, gurgle . . .


Mon, Feb 11, 2013 : 12:24 a.m.

"For example, Brown University, which owns a physical plant worth more than $1 billion, offers Providence, R.I., a $4 million annual voluntary payment and has committed to give the city another $31.5 million over the course of 11 years. Harvard and Boston University give Boston multimillion dollar payments each year." The monumental hypocrisy displayed by UofM would be hilarious if it wasn't so pathetic. Every time the issue of grossly overpaid administrators, of which Ms. Coleman is just one example, and grossly inflated tuition comes up, the argument is that if we want UofM to"remain" a "world class" institution, one that is on the same level as schools like Harvard, et. al., we have to shut up and pay. When it is suggested that UofM behave in a manner consistent with a world-class organization, the university powers that be display blatant disregard and contempt, like with the Stadium Bridges, or they just run and hide. Nice.


Sun, Feb 10, 2013 : 11:48 p.m.

Let the city first demonstrate its ability to properly manage the money it currently receives before seeking other money it is unlikely to ever receive. Eliminate the "buckets" created over the years and restore funds to essential services. Eliminate unnecessary programs, departments and expenses including forced "public art." Should U of M help pay some of the bills, yes, I do believe they should however, Ann Arbor would need city leadership that is respected by the citizens and the leadership of U of M. Do we really believe Ann Arbor has that leadership at the moment?


Sun, Feb 10, 2013 : 10:31 p.m.

Why so much discussion about the U and fire services? Surely everyone knows by now that the State is constitutionally required to provide Cities funding for fire services for public universities ? It's not up to each University to reimburse their Cities for providing that service since it's a constitutional requirement of the State as has been stated over and over again in various postings on this site. Come on now. Move on and find another topic to complain about ?

Joe Kidd

Mon, Feb 11, 2013 : 4:23 p.m.

Then blame the state and go get it from the state. I highly doubt that fire runs to UM are costly anyway.


Mon, Feb 11, 2013 : 12:41 a.m.

Because the state hasn't paid in years, that's why. Because the fire services are being provided for free. Why is it difficult to understand why this continues to be discussed?


Sun, Feb 10, 2013 : 9:57 p.m.

If the University were to offer a PILOT program, they would only raise tuition and fees or other associated revenues to cover the expenses. The City gets enough from the U via it's return from the 41,000 employed there, the 40,000+ students, their housing, transportation, food, retail, etc. etc. all contributing to the City's coffers. The U also is paying to rent space all over town for various purposes, which is all contributing to a taxable income stream. It goes on and and on ..... The former Pfizer complex that sat empty for two years with nobody buying it, decaying, was depreciating until the State and Pfizer came to the U asking them to buy it and now over 3,000 people and 20 independent businesses work there, innovating and growing.

Jay Thomas

Mon, Feb 11, 2013 : 3:09 p.m.

From the perspective of property taxes the city is still receiving zip, nada, bupkus, from the Pfizer site.


Sun, Feb 10, 2013 : 7:38 p.m.

without the university the city would crumble....fact is, cities like ann arbor and ypsilanti wouldn't exist if it weren't for the local university.

Jay Thomas

Mon, Feb 11, 2013 : 3:06 p.m.

That only tells us HOW ENORMOUS THESE UNIVERSITIES ARE in comparison to the towns in which they reside. Such overreaching comes with responsibilities.

One eyed man

Sun, Feb 10, 2013 : 8:16 p.m.

And as far as ypsilanti goes, is crumbling with them. I find it disconcerting that my alma mater is now referred to as Ghetto U.

ypsi 1

Sun, Feb 10, 2013 : 7:27 p.m.

In a word, No. They don't have to and it would set a precedent for the future. If this needs changing that tax exempt entities need to compensate, it is a national question and would affect churches, schools, and many others.

music to my ear

Sun, Feb 10, 2013 : 7:15 p.m.

sure the U of M is thinking ahead ,by snatching up all the available land, they know they are growing ,buy now the land is cheaper, they are getting grandfatherer in (a k a taking advantage of the tax break.) The city needs to act fast before ,we know it Ann Arbor will be called the U of M city. as it is well on its way it is a coo

music to my ear

Mon, Feb 11, 2013 : 4:15 p.m.

and hopefully relieving the tax payers of using our funds they already own half of A2 now.


Sun, Feb 10, 2013 : 11:50 p.m.

It might be best for U of M to take over the city and then take over running the city services.


Sun, Feb 10, 2013 : 7:03 p.m.

It looks like the university is engaging in its own form of corporate welfare.


Sun, Feb 10, 2013 : 6:26 p.m.

Does anyone know if the City at least gets something from the UM golf course? I would certainly hope so. I do hope that the City at least considers a Payroll tax which in turn will lower property taxes for the residents. I cannot think of one reason "not" to move forward with a Payroll tax. If UM will not help pay for city services, then a Payroll tax will be just as effective, AND as one reader pointed out, as soon as Mary Sue Coleman realizes someone is coming after her 600k a year, she might offer a different perspective on helping the City out.


Sun, Feb 10, 2013 : 9:41 p.m.

The golf course is the "arena" for the Men's and Women's golf teams, so I am sure it is not taxed.

cory k

Sun, Feb 10, 2013 : 6:20 p.m.

The city of Ann Arbor is on the map because of the University of Michigan. They don't owe them anything.

Joe Kidd

Mon, Feb 11, 2013 : 4:27 p.m.

People keep saying the state hasn't paid in years so the city should go after the UM. Go after the state, sue the state. If it is in the constitution they will win. Frankly though I think it is a mute point. The fire department is funded and its job is to respond to fires. If they make a run to UM, everything is paid for already. Very few major fires at UM


Mon, Feb 11, 2013 : 12:28 a.m.

Sparty, the state has failed to do so for years, so UofM is getting fire services for free, and so is EMU. Ann Arbor may be able to absorb the cost, but why should they? Any other service provider that doesn't get paid stops supplying the service. That's what AA fire should do, and so should Ypsi fire. Let "campus security" deal with the problems. At least they are getting paid.


Sun, Feb 10, 2013 : 10:01 p.m.

The State of Michigan is constitutionally required to reimburse Cities for fire services where public universities are located.


Sun, Feb 10, 2013 : 6:28 p.m.

Cory - correct. The City does not owe UM a police or fire response when a mugging is taking place or a Dorm in on fire since UM pays nothing for these services, so yes, you are correct.


Sun, Feb 10, 2013 : 6:16 p.m.

Sorry for the typo's. This along with that "art" in front of City Hall annoys me. That bronze sculpture with the blinking blue lights is awful. I swear, If it had some fur on it it would like like one of the space aliens from that old show, Lost In Space. You know what I mean...


Sun, Feb 10, 2013 : 11:51 p.m.

Please do not insult Lost in Space but connecting it to the "art" in front of City Hall.


Sun, Feb 10, 2013 : 6:10 p.m.

I find this fascinating. The non-profit I work for provides room and board scholarships to about 25 U of M students per year, as well as summer programs for largely high achieving inner city kids from around the country. These kids are very academically oriented and a highly responsible group from all over the world. This federally recognized , tax exempt, non-profit entity had been in operation for over one hundred years and is fully funded by an endowment and some donations. In 2000 when we bought the property the city, despite all of the evidence to the contrary, decided we were indeed a for profit business and has been charging us property tax since. So far with attorney fees to fight this extortion and taxes paid, we're approaching 500,000 in depleted funds that should have gone towards scholarships. I wonder how the much this has cost the city? So, Mayor Hieftje, why not just tell them they are not entitled to their status and move on? Apparently the city has enough money to wear us down but I think the U of M is not be so vulnerable. I wounder how many other non-profits they are doing this to?


Sun, Feb 10, 2013 : 11:56 p.m.

Certainly the city can beat up on a small non-profit but doesn't have the mean or ability to ever win against U of M. Ann Arbor would have no chance against U of M in a law suit with U of M having a law school full of scholars and students who could work on the case.


Sun, Feb 10, 2013 : 5:43 p.m.

Just face it, mayor. The biggest cash rob from the City of Ann Arbor is your giant folly.* Fix the folly. Find a pile of cash. (*Folly refers to: Diversion of dedicated millage funds to non-related endeavors. Use of parkland for anything other than parks, without voter approval. Amtrak stations not paid for by Amtrak. WALLY paid disproportionately by city residents. Countywide bus services paid disproportionately by city residents. Airport expansion. Conference centers subsidized by city residents. Destruction of established and clear pedestrian law. Choices not to enforce established housing code, traffic laws, and other ordinances. Lack of ethics policies for council, mayor, and DDA. Diversion of DDA tax collections from public schools, libraries, and city general fund. Recycling program that is founded on crony no-bid contracts, accepts less material than old program, and then sends much collected material to landfills. General prevailing mindset by elected leaders that basic municipal service provision is no longer required in Ann Arbor.)


Sun, Feb 10, 2013 : 11:58 p.m.

Eliminate all the "buckets" and unnecessary programs/departments would go a long way toward fixing the issues of Ann Arbor. The other fixes will happen at election time each year as citizens become more and more frustrated with the same old ways from city government.


Sun, Feb 10, 2013 : 4:58 p.m.

Income tax is the simplest answer to keeping the small dilapidated roads that lead to UofM open.

music to my ear

Sun, Feb 10, 2013 : 7:17 p.m.

that road on main near the hosp is terrible.

Elijah Shalis

Sun, Feb 10, 2013 : 4:22 p.m.

The real problem is people that work in Ann Arbor but live outside it in a tax haven. We need a city income tax with a property tax credit program.

Silly Sally

Sun, Feb 10, 2013 : 5:52 p.m.

No, keep the tax only on those who make a lot, such as Mary Sue Coleman's $600k a year or football coaches and doctors. Get them mad at Mary Sue Coleman and the cheap regents. Leave the cooks out of it.

Basic Bob

Sun, Feb 10, 2013 : 4:30 p.m.

But your butler, chauffeur, chambermaid, cook, landscaper, and chimney sweeps can only afford to live in Ypsilanti. Your system singles out the poor for taxation. Why am I not surprised.


Sun, Feb 10, 2013 : 4:21 p.m.

Ann Arbor is still lamenting the loss of Pfizer from the City of Ann Arbor, near the east end of Plymouth Rd. Major blame for this revenue loss in property taxes is the City, which gave Pfizer an $84 million tax abatement in 2001, otherwise known as corporate welfare. Six years later Pfizer flew the coop. Today, the University of Michigan is developing Solar Panel City on this choice piece of real estate. Do not expect any financial help from U-M.


Sun, Feb 10, 2013 : 3:42 p.m.

Is the city prepared to pay neighboring townships tax's on land purchased as part of the "Green Mote"? The more money the city gets the more it would waste it anyway


Sun, Feb 10, 2013 : 3:41 p.m.

Seemingly his Lordship is now worried about loss revenue. The same court who saw fit to offer tax dollars for pet projects from installation of art to recycle gimmicks that weren't successful. This same entity that suggested the Pfizer property could be turned into bike parking stations and showers for those riders but while dreaming such a dream, the UM snatched the property up for a steal of a price. The Mayor and council will have to draw up a proposal, form a committee of citizens to draft the language, endlessly meet with the hand picked members of that same committee, debate the language, hold untold public forms before even submitting the request to the university. Meanwhile, UM will have purchased more property. Next should be the row of eyesores on N. Main St. from M-14 to Summit St. Imagine a row of university condo's, housing along the Huron River with garages underneath the units, scenic views of the river, pathways. With this doctors and nurses who work at the hospital could walk or ride their bikes to work.


Mon, Feb 11, 2013 : 3:29 a.m.

Racer X, you are my brother.


Sun, Feb 10, 2013 : 3:25 p.m.

Hizzoner will ask. The university will say no. Then, they will discuss his performance review for his job at the university.

Kai Petainen

Sun, Feb 10, 2013 : 3:21 p.m.

As much as I love the university, I also live in this city. ""We do need to have a serious conversation about the future of university purchases of land and what that's going to mean about the city long-term," Hieftje said in an interview." That is an excellent statement...


Mon, Feb 11, 2013 : 1:02 a.m.

B2Pilot I am all for the city not buying land outside the city.


Sun, Feb 10, 2013 : 3:47 p.m.

As long as that conversation includes the city's practice of buying township lands as part of the green mote that removes land from those townships tax base - Is the city willing to do the same as they are demanding the university do? I don't think so

Silly Sally

Sun, Feb 10, 2013 : 3:02 p.m.

Why not lower city property taxes, and then impose a city income tax, taxing UM employees. Even threatening to tax some of Mary Sue Coleman's $600,000 a year income might change her opinion.

Silly Sally

Sun, Feb 10, 2013 : 3 p.m.

Have the city charge for all fire calls, waving the fee for taxpayers and motor vehicles. That leaves the U. Another tactic is to be real slow in repaving the roads around UM, especially on South U, allowing it be full of BIG potholes. Don't close roads for UM building projects. There are a lot of tactics that can be done. Why should we provide a free service to the state with our hard earned dollars?


Sun, Feb 10, 2013 : 10:10 p.m.

Because that would be illegal, as the State is constitutionally required to reimburse the City for fire service at the University (and similarly at all other public Universities). You do realize that lots of people use the roads around town don't you, Silly Sally? I'm sure that they wouldn't appreciate your suggestion to intentionally NOT repair the roads around the U! How SILLY. ROFL.


Sun, Feb 10, 2013 : 2:42 p.m.

This is the most ridiculous thing I have seen in years. Pretty much had it with and its ridiculous story-inflation just for the sake of causing debate and increasing ad-revenue on its website.

Jay Thomas

Sun, Feb 10, 2013 : 8:50 p.m.

Actually, this conversation is LONG OVERDUE. Kudos to for devoting so much space to it!!

Kellie Woodhouse

Sun, Feb 10, 2013 : 3:13 p.m.

I think most people would agree that the property tax issue has been around for decades, and is not something we've fabricated to increase our ad revenue. It's significant that the mayor is seriously considering a resolution, and I'm glad is able to share the news with readers.


Sun, Feb 10, 2013 : 2:53 p.m.

Does this mean you will not honor us with your comments in the future? I doubt it! Meaningless threats.

Dog Guy

Sun, Feb 10, 2013 : 2:38 p.m.

Formally requesting that the university consider offering payment would involve an obvious conflict of Hieftje's personal financial interests. A wink, nod, and grin will all be required for his delivery of such a request.

Rugeirn Drienborough

Sun, Feb 10, 2013 : 2:25 p.m.

It's time to stop financing the city government by property taxes anyway. Everyone who works here should pay an income tax and property taxes should be abolished. That takes care of the whole thing in a nutshell. That way, as the University payroll grows, so does the tax base.

P. J. Murphy

Sun, Feb 10, 2013 : 11:52 p.m.

Why pay an income tax in the city you work? Because your job and the concern that employs you, are directly supported by city services. The water, the streets, the fire, the police, are direct benefits. Beyond those are many indirect yet bedrock services such as quality schools that attract employers to a community. I know you think this is paying twice, but the reality is to a city resident, out of town workers are getting a free ride. I'd agree that out of town workers should pay at a lower rate, but to let them off completely seems unrealistically generous. Meanwhile Detroit's woes are thankfully not Ann Arbor's. The industrial base of Michigan has significantly declined in the last three decades. Every community in the state that was dependent on the industrial economy has withered. Detroit is just the biggest one. Ann Arbor s economic base is in education, research, and medical services. The economic trajectory of these activities remains upward for the foreseeable future. As long as our overall tax burden, either property based or income tax, remains competitive with other like communities who compete with us, we shouldn't worry.


Sun, Feb 10, 2013 : 3:49 p.m.

Didn't work to well in detroit companies fled it is still an area of contention to get a business to move there. Careful what you ask for


Sun, Feb 10, 2013 : 3:48 p.m.

If i commute into the city to work, why should I pay a tax to subside property owners? What benefit do I receive when your house catches on fire? A thief robs your home I'm to pay my taxes for your police department? When you flush your toilet, I'm to pay to clean your waste? That sidewalk in front of your house?, the maintenance of your street? Streetlights so little Johnny can ride his bike safely at night? Should I continue?


Sun, Feb 10, 2013 : 2:24 p.m.

I find it curious that you omit including the fact that hizzoner is a UofM employee from an article concerning the relationship between the city and university.


Sun, Feb 10, 2013 : 2:23 p.m.

Let's step back from the Mayor's gripe for a moment. The City gets revenue in three significant ways: from fees for services such as parking, permits, recreation, etc., from taxes paid directly by residents and businesses on property in the City and from payments and subsidies by state and Federal government (a la the Stadium Bridges). Let's not forget that the moneys paid by state and Federal gov't are really still tax dollars paid by us. The University gets revenue from tuition fees, from gifts and interest earned from endowments, and from subsidies by state and Federal government (including student aid, research grants, etc.). In no small part, tax dollars paid by us. The question is then where are tax dollars are best leveraged. In other words, does a given dollar paid to the City yield more return than a given dollar paid to the state, or to the Federal gov't? That's a complicated question, of course, without a clear answer. And because of that, it is very difficult to argue that a dollar I've paid to the state should be transferred back to the City. And it is much tougher to argue that a dollar paid by a resident of, say, Bay City, should be transferred to Ann Arbor. As well, it is worth remembering that there are very few homes in, again, say, Bay City, with taxable values like those in Burns Park -- which have that value because of their proximity to the University.


Sun, Feb 10, 2013 : 9:37 p.m.

Well put brimble


Sun, Feb 10, 2013 : 2:17 p.m.

If the university continues to improve the overall health of the region, with projects such as, then they are contributing much more than tax revenue. Coming from a region that was automotive heavy, I can tell you, this area enjoys some of the most stable and lively economic and social environments in the nation. There is a reason your house didn't lose over 50% of it's value like it did in parts of neighboring Detroit, or places Florida, Nevada, and California. The U-M is why Ann Arbor does not look like Flint, Saginaw, Lansing, Pontiac, Muskegon, etc.


Mon, Feb 11, 2013 : 11:38 p.m.

I have never worked for the University of Michigan, however I have been employed by a spin-out of U-M and have worked for an University in another city in Michigan as well as for a non-profit that helped liberal arts colleges. I have also worked at fortune companies and small businesses.


Mon, Feb 11, 2013 : 12:59 a.m.

Sparty The city certainly has the RIGHT to limit the type of traffic on it's streets. And I am talking about city streets not state trunk lines.


Sun, Feb 10, 2013 : 10:16 p.m.

The city could not close the streets to transportation long-term for no reason, in protest - it would be illegal. Suggestions otherwise are childish drivel.

Jay Thomas

Sun, Feb 10, 2013 : 8:47 p.m.

"The U-M is why Ann Arbor does not look like Flint, Saginaw, Lansing, Pontiac, Muskegon, etc." I wouldn't dispute that... but that is NOT the point. We are only talking about how basic city services are funded. When you look at the U's total operating budget, such a payment would be insignificant. UofM employees need to stop with the "sky is falling" already.


Sun, Feb 10, 2013 : 3:53 p.m.

I agree the city benefits 10 fold from building around the university . AA would be nothing without the university.


Sun, Feb 10, 2013 : 2:50 p.m.

sellers Full disclosure! Do you now or have you ever worked for the U of M? I have not.


Sun, Feb 10, 2013 : 2:28 p.m.

It is a two way street. How effective would the U be if the city closed some of it's streets to U of M buses?


Sun, Feb 10, 2013 : 2:14 p.m.

Wrote this to the mayor about the U helping with funding the fire department: The way I understand the issue, and the constitutional issues that come with it is this; State institutions are paid for by the state, which gets money form taxpayers from throughout the state, to benefit the entire state. It is unconstitutional for a select group of taxpayers (ann arbor taxpayers) to be required to fund a state service or service for that state owned entity in order for the benefit of the entire state. The state can say we are required too, but as of now this would not hold up in a court of law. It is quite simple. ( I am a law school student, and I discussed this issue with a constitutional law scholar a few weeks back. I trust him as he is a Yale Law graduate and was editor of their law journal, he also argued constitutional law issues in D.C.) We should not take the approach of setteling this matter through that approach though, because of the other implications of this; that is we do not have to provide fire protection to the U of M. Simply put the state cannot simply force the taxpayers to "foot the bill." It would be as if all roads in Michigan had to come from tax money collected in wayne county. This leaves the city with a couple options (one of which is ask the legislative for the money, but you have said this dosent work) The next approach is to ask U of M directley for the money. That would give them a few options other then saying yes; they could say no; build their own fire services or move to a place that would be willing to subsidize their fire service needs. Continued.

Stuart Brown

Mon, Feb 11, 2013 : 4:47 a.m.

Vivienne, Myself and Deb have been arguing this approach for some time on this site; why are you such an invertebrate when it comes to the arrogant U? What are you afraid of? Afraid the U might huff and puff and blow the city down? It is real simple; tell the U that after a certain date in the near future, no more fire safety services complements of the AAFD unless a mutual aid pact is in place (this would require the U to get its own FD unit.) The onus would be on the U if a building burned down and no safety services were in place to deal with it since the U would have had plenty of time to address the issue.


Sun, Feb 10, 2013 : 5:13 p.m.

Vivienne, Tehy are not obligated to pay, but the city is not obligated to provide without payment. Why not, for once, use the leverage the city has? Hopefully, the U would would be responsive when they are first made aware of situation. The u consistently tells the city what it does not have to do. WHy not tell the U what the city dosent have to do? As for the fire truck and the station (constructed decades ago) those costs are minimal compared with the amount of fire service received.

Vivienne Armentrout

Sun, Feb 10, 2013 : 5:08 p.m.

deb, I don't think we can suggest not putting out fires anywhere in Ann Arbor, whether at the UM or elsewhere. The UM will never pay more than they are obligated to. They did buy a new fire truck a while back, as I understand. But we really need to have our area legislators insist that we are compensated for our fire protection of the UM.


Sun, Feb 10, 2013 : 2:17 p.m.

I believe that option #1 must at least be discussed, especially with fire department #3 going through intermittent closures. It is a hardline stance, but as a home owner on the westside of Ann Arbor (abbott school area) and having watched my neighbors just endure the tragic loss of their daughter as a result of a fire, I cannot see how the local taxpayers can continue to fund fire protection services, that they are not bound to provide, for a entity with $7,000,000,000+ in its coffers, while leaving its westside constituents with no fire station. When times are better we may once again choose to subsidize the U of M's fire department needs, but for now I think you and the rest of the council should think about the other options available before you choose to put the entire westside of Ann Arbor at risk.


Sun, Feb 10, 2013 : 2:15 p.m.

If the university were to say no, I would hope the city would respond by telling them that fire service protection would no longer be provided to university owned entities without the payment. The AAFD would respond only to protect city and privately owned entities. This is a tough position, and if U of M were to lose a building, the city would be faced with the "how could you be so cruel to standby and watch?" questions. However the city would work to shift blame to a large public university that holds over $7 billion in endowmensts and choose not to help subsidize their fire safety needs with approximently $4 million or whatever the acutual number may be( that 4 million is just a pure hypothetical, I believe last I saw is the U owns 40% of washtenaw county (seems high) and our FD budget is around 4 million, so its basically a guess. However I am quite certain the number would more than make up for the entire projected budget defecit) If the university were to counter with the establishment of their own FD, the city would be able to scale back its FD. This being based on the assumption the two FD's would have some sort of arrangement like the one that takes place between the PD's. At least for large operations, the last option is undoable for the universtiy.


Sun, Feb 10, 2013 : 2:06 p.m.

"It's written into the constitution that they don't have to pay taxes."" Or you could amend that and take it way from them....


Sun, Feb 10, 2013 : 10:18 p.m.

We saw recently how difficult it is change the the constitution on State-wide issues, but sure go ahead and try to do something like that for one just one city ... good luck. ROFL.


Sun, Feb 10, 2013 : 2:05 p.m.

Harvard, Brown University and Yale (per Mr. Ranzini) are all private institutions. UM is a public institution. I don't know if there are laws in the states where those private institutions are located or not, but the UM is owned by everyone--even if it appears to be so imperially detached. Likewise, EMU, Wayne State, MSU, etc. Everyone of those institutions are run by an elected Board of Trustees or Regents, etc. Washtenaw Community College also doesn't pay property taxes. In fact, quite opposite, it appears on our tax rolls as a millage. My point is this, if you object to UM's expansion at the "expense" of the city's coffers, then make sure to actively vote for those Regents that seek to make the UM more publicly accountable. Or, organize and push for a candidate to get on the Board. Appear at Regents' meetings. They are regularly scheduled and open to the public (unless held in California!). Voice your positions and concerns. But, keep this in mind. There's an old saying that a rising tide lifts all boats. Absent active involvement of the UM in many parts of the city, local land and real estate values would have declined precipitously. Absent a healthy UM, even more homes would have fallen to default. Plymouth Rd could have collapsed with boarded up businesses. How much income did the city preserve because property values could retain some taxable worth thanks to their proximity to the UM? That's not so easily quantifiable, but it's clear that the UM helped insulate the Ann Arbor area from some of the worst over the past decade.


Mon, Feb 11, 2013 : 4:04 p.m.

No one is claiming that UM isn't a huge boon. But you have to realize the impact it's continual expansion is having on the local tax base. Parks dont (generally) continuously grow. The US Army may grow, but it's not so localized and spreads that growth across the country, minimizing impact in any one location. UM is located here (primarily) and expanding here and while we do benefit from its presence, A2 property owners continue to shoulder a larger and larger potion of the burden of funding this town each time another property is taken off the tax roles. Clearly, a case can be made for this problem getting larger and larger as UM does. They have shown little chance of stopping growth -- in fact, over the last decade, it's accelerating. Good for them, but continual growth isn't sustainable for the A2 property tax payers. There has to be an accommodation.


Mon, Feb 11, 2013 : 1:47 a.m.

Solitude, compare it as much as you want to private colleges, the UM is not a private college. The fact that it was fiscally astute and also draws on a lot of donations from successful graduates only points out that it does it's tasks well serving the community. Also, I would argue the US Military is flush with funds as is the EPA with its large testing lab in Ann Arbor. Using your test of ability to pay would require that the tax dollars funding those operations be redirected to the benefit of the cities they are located in. It's not going to happen and tax dollars that are directed toward certain functions and operations should not, indirectly, fund other governments. Once you break that barrier down, then expect the City of Ann Arbor to have to pay property taxes to the County, the County to city, the city to the State, and on and on and on. There's a fundamental logic to the current system. It may not seem fair, but it is. The UM enriches this town immeasurably. It's a special university with a national reputation that it actually deserves. What would Ann Arbor be without the UM as it is today? Answer that question honestly and look about you as you see high-rise developments, new shops, student apartments, new businesses, new offices that have to inflate the tax rolls. The UM is buying land it needs but no more. Of all the things to worry about in this or any town, I would say the loss of taxable lands on the property tax rolls are not the highest concern.


Mon, Feb 11, 2013 : 1:33 a.m.

No, it wasn't intended as a snarky comment. I appreciate Mr. Ranzini's comments all the time. He just mentioned he was from Yale, which is a private institution.


Mon, Feb 11, 2013 : 12:34 a.m.

Dennis P, your second post ("Point of clarification...") isn't exactly comparing apples to apples, as none of the state or county parks, for example, is sitting on a seven billion dollar endowment. None of them are operating as a "for profit" entity cloaked in "non-profit/public organization" disguise. In fact, UofM itself invokes comparisons with private universities like Harvard every time it tries to justify it's wildly inflated administrator salaries and tuition.


Sun, Feb 10, 2013 : 4:41 p.m.

Interesting points, just not sure why you had to make a snarky comment about another poster---or maybe it just reads as snarky and wasn't meant that way?


Sun, Feb 10, 2013 : 2:16 p.m.

Point of clarification--I don't know if there are laws in the MA, RI or CT (for Mr. Ranzini's beloved Yale) that mandate property tax relief for those universities, but those laws are easily changed at any time so those universities may feel greater compulsion to pay a PILOT fee. There's a difference between a "non-profit" and a public entity. UM is a public entity with elected representatives. This isn't the Salvation Army or the Red Cross or, even, Hillsdale College. The suggestion that the UM pay a fee would be the same as requiring the Army Reserve facility on Industrial to pay a fee, State or County parks to pay fees, or even Ann Arbor to pay a fee. It doesn't make sense and sets a questionable precedent.


Sun, Feb 10, 2013 : 2:03 p.m.

Institute an across the board "payroll tax" of 1% and at the same time reduce property taxes for those of us who pay for the little darlings to have clean streets to walk on at night. UofM and the UofM Health System would generate quite a bit of revenue with a Payroll tax.

Jay Thomas

Sun, Feb 10, 2013 : 8:29 p.m.

B2PILOT, I'm tired of the threats. It really doesn't help your side of this argument either. Anyway, U of M is full of Obama voters who think that only some hypothetical rich person should have to foot the bill (anyone but them). They fail to realize that in this economy... they are the 2%.


Sun, Feb 10, 2013 : 3:59 p.m.

The university won't eat the increase the employees and student would. What if the university just stops local mentoring and studnet teaching sharing? The new medical center is being discussed how about the univeristy just move it out of the county to Wayne or Livingston county. What would AA do with the empty hole and millions that come into to town to visit the U of M?


Sun, Feb 10, 2013 : 1:51 p.m.

You mean the U doesn't help pay for our dreadful roads? Many of its employees (other than well-paid professors) live in other towns and do not pay property taxes here. They don't even shop here: they just commute in and out. U-M should chip in a small percent of their annual budget starting in 2014.


Sun, Feb 10, 2013 : 1:49 p.m.

They definitely should start and should have already been paying some type of revenue to the city of Ann Arbor -- especially now since they seem to be purchasing more and purchase taxable property.


Sun, Feb 10, 2013 : 1:43 p.m.

Lets face it, AA is addictd to free money. Need a bridge for Stadium St? Vote for John DIngell and he will give it to you. Want to expand the airport, the FAA will pay for a study. Want more research $'s ask the Federal Gov, which is $16.6 trillion in debt for more money. Government spending is a Ponzie scheme that would make Mr. Madoff proud. We need to reduce all level of spending to a sustainable level. This will require tough choices and require us to pass on some spending on our favorite "free" project.


Sun, Feb 10, 2013 : 2:57 p.m.

Yes I am. All levels of government need to figure out what its core objective is and get rid of assets, programs that does not support the core mission.


Sun, Feb 10, 2013 : 2:21 p.m.

I agree as long as you are proposing the U cut back also!


Sun, Feb 10, 2013 : 1:19 p.m.

The headline says "Mayor to ask" but I guess I missed the part that describes him actually asking anything. I see "do need to have a conversation". I see "needs a long-term solution". I even see "could see this building up to a resolution for council asking for a conversation". Oh - and a councilperson would "welcome seeing" that. Wow - building up to a resolution asking for a conversation and a councilperson who would "welcome seeing" it. Do we have some great leadership here or what?


Sun, Feb 10, 2013 : 2:19 p.m.

Reminds me of staying up all night as a child hoping to see Santa Claus, or losing a tooth as a child, putting under my pillow and then hoping the fairy godmother leaves a 10 spot behind!:)

Michigan Man

Sun, Feb 10, 2013 : 1:06 p.m.

U of M really enjoys no money at all. It is money of the folks via taxes. If the people did not pay taxes U of M would not exist.


Tue, Feb 12, 2013 : 1:05 a.m.

"@blue85: There is no legal basis for the U to become private. " You apparently have no understanding of the state's constitutional framework, or the university's place within that framework. You are dead wrong. "The people of the state of Michigan built it and it belongs to us." You are wrong. If you understood accounting, inclusive of the concepts of capital investment, you would realized that: the physical plant degrades at the rate of , while the state hasn't invested much more than $20,000,000/year over each of the last 10 years. Over the last 10 years, the university value has declined and state capital expenditures are around $200,000,000 for a net loss of in value. In contrast, donors and other university funding sources paid for $5,000,000,000 of building additions. Over the last 20 years, you will see that state capital investments have depreciated to roughly zero. That is the physical plant. As to tuition, the tuition of out of state students is roughly market. In-state students pay roughly $10,000 and the state used to pay a differential of roughly $20,000/student. However, if you look at the general fund budget divided by cost per student, you see a figure of $39,000/student, which suggests that the state is not fully subsidizing the in-state students...UM is losing roughly /student for each in-state student. In sum, you don't own anything because you are not really paying for either the physical plant or the instructional costs. I bet you think you are a capitalist when you are really a want something for want the halo effect of the university and to claim pride of ownership, but you aren't responsible for any aspect of the university's eminence. " You seem to think that it belongs to the people THAT WORK THERE and you are sadly mistaken about that." Please show me, precisely, where I make that assertion. I'll hold my breath...take your time.

Jay Thomas

Mon, Feb 11, 2013 : 2:54 p.m.

@blue85: There is no legal basis for the U to become private. The people of the state of Michigan built it and it belongs to us. It doesn't matter if we never give as much as another dime because other funding sources exist. You seem to think that it belongs to the people THAT WORK THERE and you are sadly mistaken about that.


Mon, Feb 11, 2013 : 12:55 a.m.

As Sparty notes: 1) Tuition is $1Bn, roughly; 2) Research money is $1.24 billion, with roughly half of that coming from NON-federal (also non-state and non-local) sources, thus NOT from tax revenue; 3) roughly $2.2 billion from the hospitals; 4) roughly $250 million from auxiliary enterprises; 5) roughly $250 million from donors, of whom 2/3 is out of state. The state of Michigan is analogous to a well fare cheat or a father skipping on child support: the people of Michigan want credit for and control of the institution, but provide only about $300MM/year of the institutional support out of a budget of $6billion. That is 5%. If you want to exclude the hospitals, that is roughly 8% of the total budget. If you look at depreciation of $250 million a year, and a capital plan worth $5 billion, and a capital budget of $500MM/year for the last 10 years, and state contributions of $25MM/year, it is clear that any investment made by the people of Michigan has long since decayed below zero and is only kept above zero by alumni donations. In my view, UM should: 1) tell the state to take back their funding and go to hell; 2) privatize and cut the freshman class in half; 3) get rid of the satellite campuses. Steps #2 and #3 would cut costs enough to ensure solvency. Of course no in-state student would be able to apply and receive preference, but the conservative folk of Michigan, and on this board must not want that anyway because that would smack of liberalism and socialism. If you really don't like liberalism or socialism, you shouldn't expect something for nothing and that is what the people of Michigan currently get from UM. Let the conservatives put their money where their mouth is and pay full tuition to a privatized U of M.


Sun, Feb 10, 2013 : 10:24 p.m.

Tuition & Fees? Billion Dollar Endowments? Alumni Donations? State Contributions represent only a small portion of the Universities annual budget. Am I missing something?


Sun, Feb 10, 2013 : 1:01 p.m.

I posted this question in the related article, hopefully getting a thorough explanation: Just throwing this out there: How about a city income tax that also offsets property tax? The net gain/loss to residents would be zero. And have the vote in July when the transient/student population is minimal. I'll let an expert out there give me the legal yea or nay.


Sun, Feb 10, 2013 : 6:50 p.m.

Because the mayor has pretty much kowtowed to e U for years.


Sun, Feb 10, 2013 : 2:21 p.m.

Absolutely! I totally agree. Can you imagine the money from UofM, the Health System, Med & Law Schools, not to mention all of the bars, etc.. downtown. At the same time reduce MY property taxes so that I am not paying 4000 a summer.


Sun, Feb 10, 2013 : 12:59 p.m.

The usual worn out democrat line ...take from anyone more productive than yourself...gotta be " OZ " .....Oh excuse me it is....


Sun, Feb 10, 2013 : 12:57 p.m.

UM is reason AA doesn't have the financial issues of Ypsi to the east and Jackson to west. Most communities in SE Michigan would kill to have this kind of economic engine in their town. Only in AA could this be turned into a "bad" thing. And you know if City Council got money from UM, they'd just throw it down some hole like another underground parking garage or some art no one but city employees will ever see.

buvda fray

Mon, Feb 11, 2013 : 12:12 p.m.

Once in a while people compare Ann Arbor and Ypsi. It's apples and oranges, folks, and the orchard is sweeter than the grove.

Fritz Swanson

Mon, Feb 11, 2013 : 1:20 a.m.

Jackson is the real comparison. They had their pick between Unversity and Prison. They picked prison. It's as close to an experimental control as you will get. UM turned into one do the world's greatest universities, the prison has remained... A prison. Ann Arbor should be thankful that it has weathered a horrible financial crisis in one of the hardest hit states, solely thanks to UM. Ann Arbor and Jackson could trade, I'm sure Jackson would go for it in a heartbeat.


Sun, Feb 10, 2013 : 6:49 p.m.

Craig, I wonder of perhaps you answered your own question. Maybe such a large university in such a small town is Ypsi's problem. But I'd guess there are a lot of other issues at play as well.


Sun, Feb 10, 2013 : 2:49 p.m.

thorj Full disclosure! Do you now or have you ever worked for the U of M? I have not. Great point Craig!

Craig Lounsbury

Sun, Feb 10, 2013 : 1:19 p.m.

"UM is reason AA doesn't have the financial issues of Ypsi to the east ...." I'm not sure I entirely follow your logic there. Ypsilanti is a sixth the size of Ann Arbor and has a public University 1/2 the size of UofM. So why doesn't Eastern have a similar positive effect on Ypsilanti? I realize Eastern is not the academic institution that UofM is but the ratio of population to University size is very much in favor of Ypsilanti/ EMU.


Sun, Feb 10, 2013 : 12:41 p.m.

I agree that the U should make some kind of contribution towards future tax payments that will not be generated. I like the "lump sum" contribution towards future taxes upon sale of a property. I would also like a provisional clause that the "lump sum" payment goes directly to essential city services, such as road maintenance and replacement. This is something that affects how nice a town this is for its own students and faculty.

Macabre Sunset

Mon, Feb 11, 2013 : 3:02 a.m.

Maybe we wouldn't be having this discussion if the city used its money on essential city services. Honestly, I've never seen a group of people so intent on grabbing more and more tax money. Ann Arborites seem to truly believe in a benevolent government. This must be why such an incompetent mayor was elected.


Sun, Feb 10, 2013 : 12:31 p.m.

The mayor can ask, but the answer will be a resounding "No." He'll be reminded that, If it weren't for Blue, There'd be nothin' in A-Two.

Silly Sally

Sun, Feb 10, 2013 : 2:51 p.m.

Be real, real slow in repaving the roads around UM, especially on South U. Let it be full of BIG potholes


Sun, Feb 10, 2013 : 2:48 p.m.

Get real? Full disclosure! Do you now or have you ever worked for the U of M? I have not.


Sun, Feb 10, 2013 : 1:09 p.m.

GetRealA2 You need to Get Real for real! What is the U of M going to take it's marbles and play somewhere else? I am sure Flint would welcome a bigger presence. If the city starts tightening the screws where ever and whenever it can the mighty emperor will see it has no other options but to cooperate! The screw you attitude of the self centered elite at the U will bite it in the butt someday!


Sun, Feb 10, 2013 : 12:44 p.m.

Well, I think he should ask. The U isn't moving anywhere anytime soon, and it is in both parties' interests to keep the town services up to date and working properly. If Ann Arbor has awful roads or can't maintain essential city services, that won't help attract and retain the top talent for which the U is known...


Sun, Feb 10, 2013 : 12:30 p.m.

The U already stopped paying for the fire services they use to pay for years ago. They refused to kick in for a bridge leading to their athletic campus. Why would anybody expect that they'd step up and help out now?


Sun, Feb 10, 2013 : 10:27 p.m.

The State is constitutionally required to pay for fire services to cities where public universities exist, as the U and and Ann Arbor well know.


Sun, Feb 10, 2013 : 12:28 p.m.

UM will most likely tell the city to go to hell, like they did with the Stadium Bridge project.

Stuart Brown

Mon, Feb 11, 2013 : 4:28 a.m.

No, don't close Stadium Street bridge, put a toll booth on it on football Saturdays. In fact, why not close off all streets leading to the Big House with toll booths on football Saturdays! The city could charge $10 a vehicle for passage. If 30,000 vehicles hit Ann Arbor on Saturdays, that is $300K/game or about $2.4 million per football season.


Sun, Feb 10, 2013 : 2:47 p.m.

Let the city close the bridge every Saturday in the fall and then you will know WHY the U should pay!


Sun, Feb 10, 2013 : 1:53 p.m.

I thought Stadium St is owned by the city. Why would U of M pay for the bridge?


Sun, Feb 10, 2013 : 12:22 p.m.

It would be good to see more support from the University for services they need like fire protection and water and sewer.

Albert Howard

Sun, Feb 10, 2013 : 12:21 p.m.

U-M should compensate Ann Arbor for lost property taxes.

Macabre Sunset

Mon, Feb 11, 2013 : 2:59 a.m.

Should churches as well?


Sun, Feb 10, 2013 : noon

My initial reaction is BAHAHAHAHAHAHAHA. Why would the U compensate the City? They've been allowed to operate with very little regulation by the City for years. Now The U owns 8% of the city and now the Mayor wants to examine it? If, by some chance, there is compensation to the city can we lower taxes for residents?


Sun, Feb 10, 2013 : 11:15 p.m.

I love the idea of decreasing redisent's taxes but would that not defeat the purpose? The PILOT would be filling the non-full pot. If you then decreased resident's taxes we would be right back to an non-full pot. Right?


Sun, Feb 10, 2013 : 1:56 p.m.

Good point! Now i fully understand why my summer tax bill is 4k. One thing the City could do would be to institute a "payroll" tax of let's say 1% and at the same time reduce property taxes for those of us paying to keep A2 a top notch city. Can you imagine the payroll tax on UofM alone? Wow.


Sun, Feb 10, 2013 : 11:55 a.m.

I would tell the mayor to take a leap. Either change the rules of the game, which have been this way for many, many years or live with the result. The mayor and his cohorts need to reduce costs to well below revenue so that they will always have a buffer for surprises. Spending equal to revenue, as well as horrible growth projections that never become reality (other than smaller than expected) is a formula for disaster. Go figure!


Sun, Feb 10, 2013 : 3:51 p.m.

Great point !! Live within your means,,,fiscal responsibility is good for everyone... All liberals please take note !!...

Stephen Lange Ranzini

Sun, Feb 10, 2013 : 11:46 a.m.

Ann Arbor is blessed to have hundreds of non-profits. The U-M is just the largest and best. The mayor is correct this is a major long term challenge for the city. One easy option that city council could implement unilaterally is to place a permanent deed restriction in the title of any property the city owns and then sells (such as the downtown lots now proposed for development), that requires a lump sum payment by any non-profit that acquires that property. The lump sum payment would be equal to the value of the future taxes that would be lost. The city could also create model language and encourage all property owners in the city to formally add that language to the deeds of their own properties. U-M has a vested interest in Ann Arbor thriving. I can recall when I attended Yale people would tell me, Yale is a such great school, but it's a shame you have to live in a dangerous town like New Haven. When New Haven was a dump it dragged Yale down. By working with the city (including payment of a voluntary annual PILOT and a homesteading subsidy for Yale faculty & employees) Yale turned New Haven around.


Sun, Feb 10, 2013 : 11:27 p.m.

Silly idea. Small number of properties qualify and most non profits can't afford this tax you propose by another name which hurts the community. That and it may not be legal. But who cares about thinking critically about a problem. Yale may owe you some tuition back.

Stephen Lange Ranzini

Sun, Feb 10, 2013 : 4:46 p.m.

@Silly Sally: An excellent idea I had not previously considered, thanks! One option is to donate it to the pension fund and retirement health care fund until they eliminate their roughly $250 million deficits. It would have the same effect without creating yet another "bucket" that could be manipulated by city insiders.

Silly Sally

Sun, Feb 10, 2013 : 2:46 p.m.

Stephen Ranzini has a great idea, but it needs to go further, A restriction would need to go on a permanent restriction that will stop the city council from spending the windfall all at once on bicycle lanes and instead set it up as an endowment that will pay forever, just as the tax base will have been reduced forever.


Sun, Feb 10, 2013 : 11:44 a.m.

How about defunding the DDA? That would free up some cash!


Sun, Feb 10, 2013 : 11:11 a.m.

I'd be curious to know what the multiplier effect of having U-M in Ann Arbor is. If U-M takes X-amount of direct revenue away here, does the city see an increase in other sources of revenue related to U-M? If the University had to pay property taxes on everything it owned, how much revenue would that generate for the city?


Mon, Feb 11, 2013 : 10:52 a.m.

Yes...1% income tax for non-residents, .25% income tax for residents, and lower property taxes that offsets the increased amount of income taxes. I believe there is already language already written at the state level indicating the offsets. As the university grows its payroll by expanding its hiring from acquiring property, so to does tax revenue for the city. BUT...look at the quality of life in Michigan cities that currently have an income tax. Would you want to live in any of those cities?