Ypsilanti residents react to tax increase proposals
Last week, City Council took the first step toward putting an income tax in front of voters by directing staff to update a study on the issue that was completed before the failed 2007 income tax campaign.
Council members also discussed a Water Street debt retirement millage, though no action or specific directions were given regarding it. The city faces $30 million in Water Street debt and must make payments that will soon grow to $1.3 million annually.
Community members - including former local politicians, business owners and residents - varied in their reaction to the proposals. Many declined to comment until after a proposal is put forth, but several offered their thoughts.
Respondents largely expressed opposition to further cuts, but opinions on the revenue raising proposals were varied.
Rodney Nanney, a local business owner who ran on the Republican ticket for the Michigan House of Representatives in the 54th District in 2010, noted that the 2007 income tax proposal he campaigned against failed by a wide margin. He said he would campaign against a new measure because residents can’t afford to pay another tax in a bad economy.
“Residents of this city are facing disastrous consequences related to the economy, and the city income tax would be the nail that nails the coffin shut,” he said. “I understand this city government is in this city hot water related to Mayor Cheryl Farmer’s Water Street debacle, but the city income tax failed in 2007, and we don’t need it now in 2011.”
He said he also opposed a Water Street millage because he said it would “only delay the inevitable” and the $30 million debt “dwarfs the city budget.”
“I don’t see how the city can tax its way out of that,” he said.
Early discussions indicate council could offer a 5.1 to 5.9 mill tax through 2017. That would mean a property owner with a house with a taxable value of around $50,000 would pay about $250.
Resident Andy Gillman said he would conditionally support a Water Street tax. He said if Mayor Paul Schreiber and Council admitted Water Street was a mistake and put in the city charter that they wouldn't undertake such a project again, then he would be comfortable paying the tax.
But he said he continues to hear council members say Water Street was a good idea.
“If Paul (Schreiber) and the rest of them said ‘We were wrong. We were tricked into this bad idea’ and show some change in thinking, then I’d say ‘OK, now let’s put it to rest. I’m willing to pay for it,’” Gillman said. “But that’s not what they’re saying.”
Gillman said he opposed an income tax because, like Nanney, he said it was a permanent tax but only a temporary solution. He said his house is paid off and he would consider moving if the tax was implemented.
Beth Bashert, who has been active with a number of local campaigns and the Advance Ypsilanti group, supported both taxes and said it will help preserve the city through the economic downturn.
“We’re close to a crisis but not in a crisis yet,” she said. “But if we do not raise revenue, then we will be in big trouble soon. I love my city and I don’t want my city to lose as much as we could lose should we not find revenue to stay solvent.”
“Without these options, we will be in very big trouble, and with these options we will be able to ride through a very difficult period.”
She said further cuts to public safety would lead to higher fire insurance rates that could end up costing more than a tax increase, and the city’s service level has already significantly declined.
“A government needs to have enough staff to function to keep the city’s wheels turning,” she said. “We’ve cut a lot of staff - city hall is a ghost town.”
Bill Nickels, a former Ypsilanti City Council member, also said he supported both proposals.
He said there are ways to structure an income tax or make it more palatable, such as by lowering the property tax millage rate. The Water Street debt retirement millage would eventually expire, albeit it in 2031, but that is more desirable because there is an expiration, Nickels said.
Regardless, the city needs to generate revenue and has already made significant cuts, he added.
“We’re going to get to the point that without any revenue increase we are going to have extremely minimal police services and fire protection,” Nickels said. “Yeah, we can we cut our way out, but we wouldn’t have a functioning city anymore.”
Mark Teachout opened Cafe Ollie in Depot Town earlier this year and is ready to open a new, all-Michigan products store as well. Like several other residents, he said he didn’t have enough information on the situation, but on face value he opposed an income tax because of the impact it would have on his new businesses' bottom lines.
But he said a tax would beat the alternative.
“I would probably pay whatever is asked so we didn’t have to get involved with Snyder’s emergency financial managers, because that is completely out of control,” he said. “I would rather support something local I’m unhappy with to block a statewide measure I hate.”
Council Member Brian Robb and Pete Murdock have pushed hardest for discussions on controlling fixed costs such as health care, which is projected to increase by 15 percent annually.
Ken Hobbs, Ypsilanti Fire Department’s union chief, said he supports the taxes because they save jobs, but said he understands why people might be upset for having to pay for Water Street, which they had no voice in and was out of their control.
He said the union has made health care concessions in every recent contract negotiation, and he offered a new suggestion for saving money. He said all the fire departments across the county use the same insurer and many have already begun consolidating their services. It would make sense for everyone to negotiate for a plan as one, Hobbs said, because it would save each municipality money. But he added he didn’t know if it was possible legally or politically.
Gillman acknowledged the city has made significant cuts and commended City Manager Ed Koryzno for how he has managed the city’s finances in recent years. But he said the hasn’t heard the kind of conversations he believes would solve the city's structural issues, such as those about health care and pension costs.
He also suggested a part time fire department or reducing the police force and having officers focus on more serious crimes.
“Those are the big-ticket items, but you can't walk in there and talk about them without the firemen and police officers sitting in the background saying ‘You’re dead politically if you bring (the cuts) up,” he said.
Nanney also said he thought the city had done a good job making cuts in recent years and didn’t have much more to cut. But he said he favored an emergency financial manager addressing the situation.
“I respect the efforts of the council members to have a local solution, and they have made every possible effort," he said. "The fact that we have a $9 million fund balance is remarkable, but there is no local solution. There is no way out at the local level. The solution has to come form Lansing.”