Ann Arbor city and school officials weigh in on possibility of two tax proposals on November ballot

"We should not let something that does not affect the underlying substantive rationale to affect our own, or citizens', perceptions of the worth of the investment," said Ann Arbor school board Trustee Glenn Nelson, one of the leaders of the enhancement millage drive.

Nelson said the returns to Ann Arbor residents from investing in education will hold true regardless of whether the city income tax appears on the ballot.

"The communities with high-quality schools will be the ones that experience job growth by attracting well-educated people and attracting high-tech companies," Nelson said. "The children and young people who receive an excellent education will be better prepared for productive, satisfying lives."

Ann Arbor City Council members received the final draft of a feasibility study Friday outlining the city's potential to generate an additional $7.6 million a year in revenues from a city income tax. The council is expected to decide Aug. 17 whether to put the question on the ballot to have commuters to Ann Arbor pay a 0.5-percent tax and residents pay a 1-percent tax.

Property taxes in Ann Arbor would come down by nearly 15 percent if an income tax is enacted, offsetting the cost of the new tax for many people, city officials say.

"Certainly our preference going on the ballot would be to be the only revenue question," said City Administrator Roger Fraser. "We think that they're quite different issues and how people perceive that, we don't know. But the fact is that, even if this is approved, it's still almost 18 months after it's approved when we would begin to see any of the revenues."

City Councilman Stephen Rapundalo, D-2nd Ward, said he has no hesitations about putting the income tax question side-by-side with the school millage.

"I personally would prefer to have it on the November ballot so as to maximize the number of people who can come out and speak to the issue," he said. "Quite frankly, I think Ann Arbor voters are smart enough to discriminate between various proposals and understand what one is for and what the other is for, and not necessarily tie any of them together."

City Councilman Leigh Greden, D-3rd Ward, notes the differences in the two proposals.

"I think the key distinction between them is that the school proposal, as I understand it, would be for a 2-mill property tax hike, which would apply to everyone who pays property taxes, and there would be no corresponding reduction in some other tax," he said. "Whereas, here with the income tax, if you are a property owner, you would by law have a 14 percent reduction in your property tax bill."

If the income tax doesn't go on the November ballot, city officials could take a chance at it early next year.

"Under state law you can have an election four times a year and the next election would be February," Greden said. "I don't think there's anything else on the ballot in February. There's a May election, which is a school election and so those would be the next options if council were to not choose the November ballot."

Ryan Stanton covers government for AnnArbor.com. He can be reached at 734-623-2529 or ryanstanton@annarbor.com.

David Jesse contributed to this story. He covers K-12 education for AnnArbor.com and can be reached at 734-623-2534 or davidjesse@annarbor.com.