Survey could gauge support for city income tax in Ann Arbor
City Administrator Roger Fraser says it may be time to conduct a survey to gauge Ann Arbor's feelings about a city income tax or Headlee Amendment override.
Ryan J. Stanton | AnnArbor.com
"It seems to me that if we're going to take such a proposal to the voters, it would be folly to do that without better understanding what the real community attitude was," he said.
Fraser's request to continue exploring revenue-enhancing options came during a Budget Committee meeting prior to the Ann Arbor City Council's regular meeting Tuesday night. Council members gave Fraser their blessing to proceed with further exploring the idea of a community survey.
As the city's budget picture has grown clearer over the last month - particularly with the kinds of draconian cuts now proposed to balance a $5.2 million gap in the fiscal year 2010-11 budget - council members have appeared more willing to consider the idea of asking voters to dig deeper into their pockets.
Tom Crawford, the city's chief financial offer, told council members Tuesday a city income tax could raise about $5 million to $11 million a year, depending on how it's structured. That's a more conservative forecast than one provided by a consultant last summer who laid out a range of $7.6 million to $14.2 million.
Fraser and Crawford agreed it may be less cumbersome to ask voters to approve a Headlee override instead, which could bring in more than $6.1 million a year in additional tax revenues.
The Headlee Amendment limits property tax growth to the rate of inflation, effectively reducing the city's millages each year. For instance, the city's 7.5-mill general operating levy has been whittled down to less than 6.2 mills as of this year.
"The Headlee, if you were to get approval, could be implemented in relatively simple fashion, whereas an income tax would require some time and effort, probably a year, to implement," Fraser said.
Fraser said the city continues to work on a budget scenario for next year that assumes 7.5 percent reductions in each area. But any efforts to make major changes to save money or enhance revenues could offset some of those cuts.
Fraser has laid out two other options for enhancing revenues. The first involves creating special assessment districts to fund street lights, which he said could bring in $1.5 million to $1.8 million. Another option is going to the Downtown Development Authority to discuss a contract set to expire.
"The DDA has been providing to us somewhere around $1.8 million over their contract amount," Fraser said. "Our forecast, because we do not have a contract with the DDA after June 30 of this year, does not include any extra money (the $1.8 million) out of the DDA. That's probably somewhere close to 35 to 40 percent of our shortfall that is reflected in the absence of a commitment on that particular item."
Ryan J. Stanton | AnnArbor.com
The City Council held off on approving a resolution Tuesday night that would have asked Fraser and all other non-union employees to take a 3 percent pay cut next fiscal year.Â
Council Member Stephen Rapundalo, D-2nd Ward, one of two sponsors of the resolution, said he hopes to bring the proposal back March 1.
"A number of council members have just raised a few issues," Rapundalo said. "Not everybody has had the opportunity to provide their comment, and I think Council Member Higgins and I just simply wanted to buy a little more time to get information and perspectives from our colleagues before we move forward on it."
Also Tuesday, the City Council voted to spend $381,170 from parks millage proceeds to purchase a 0.58-acre piece of land at 220 Sunset St. from the Elks Lodge. The parcel is next to the Bluffs Nature Area and will provide access to the park from Sunset Street.
Rapundalo was the only council member to vote against the purchase. He said he thought $381,170 was "excessively expensive" and questioned the city's continued investment into acquiring parkland when it already can't afford the parks it has.
"There's going to be consequence on our operational side," he said. "I think it's really time to sit down and take a look at our acquisitions and the implications on the general fund side."
Another expense that drew some debate was a $21,800 allocation to extend a contract for six months with Katherine Talcott, a part-time consultant hired to help administer the city's public art program. Objecting to that expense were Council Members Stephen Kunselman, D-3rd Ward, Sabra Briere, D-1st Ward, and Marcia Higgins, D-4th Ward.
"I just want to bring to the attention of my colleagues and to the public that the art program is not so benign that it doesn't have an effect on our other funds where we're asking our employees to make sacrifices," Kunselman said. "I'm wondering if, at what point, this council will be asking the art fund to start making sacrifices as well."
Ryan J. Stanton covers government for AnnArbor.com. Reach him at firstname.lastname@example.org or 734-623-2529.
Sun, Feb 21, 2010 : 11:15 a.m.
I am concerned that the focus seems to be on the inevitability of some form of revenue increase. Whenever cutting expenses is discussed, city politicians toss up hot button ideas like police and fire, parks, etc., that have broad community implications. I think they do this to demonstrate increased revenue is essential. What we don't hear is data relating to pay and benefits for city employes, for example. Many of us in the private sector have experienced pay freezes, cuts in benefits, and increased cost sharing, but it is not evident that the city or state governments approach these with the same sense of urgency. We have also seen the city boast from time to time about green/renewable energy initiatives, bicycle coordinators, and possibly other initiatives that may not be fundamental government roles. The city general fund also directly subsidizes AATA beyond the direct millage support for AATA. Is it unreasonable to ask that the subsidy be reduced or phased out? Could this be managed by reducing the subsidy for general ridership and focusing on need based subsidides? Or possibly a reduction in AATA public relations spending (who hasn't heard "ads" on local radio or seen them in local print?). What else is possible? I am willing to accept the fact that public safety consumes a large fraction of the budget. But until there is a more complete discussion of the ways our money is spent, I would withhold support for a permanent revenue increase.
Sat, Feb 20, 2010 : 1:07 p.m.
"You clearly don't know the income level of many of Ann Arbor's residents if you believe there's a disparity between what people in city government make and what their fellow residents are making." So, John, what is the average total annual compensation of Ann Arbor residents?
Fri, Feb 19, 2010 : 10:39 p.m.
"As realization of the large compensation disparity between government and civilian workers grows, it will become even more difficult to increase any taxes." You clearly don't know the income level of many of Ann Arbor's residents if you believe there's a disparity between what people in city government make and what their fellow residents are making.
Fri, Feb 19, 2010 : 5:59 p.m.
It is extremely unlikely an income tax would be approved. As realization of the large compensation disparity between government and civilian workers grows, it will become even more difficult to increase any taxes. Per http://www.annarbor.com/business-review/income-tax/index.php comment 59: Our city employees earn 141% of the national average for government employees, and they earn an astounding 204% of the average for the far larger civilian work force.
Fri, Feb 19, 2010 : 8:54 a.m.
I'm not a Lesko supporter, but I've gotta give her credit for bring the full picture of municipal spending bloat to the fore. Yesterday's post on the golf course and why it loses money is eye-opening. http://www.a2politico.com/?p=3024 We do NOT need an income tax. There's plenty of waste at City Hall.
Thu, Feb 18, 2010 : 2:19 p.m.
"except we want to beat everyone from outside the city half to death with taxes. I guess that means we get double." Iif I thought one half of one percent of their income was beating them to death i would agree with you, but i don't. Everyone that is complaing this much will bankrupt them needs to go back to highschool and take a money managment class.
A Concerned Citized
Thu, Feb 18, 2010 : 8:37 a.m.
It seems several people see UM as this giant entity that takes advantage of Ann Arbor. What you do not see is the University may not pay taxes per se, but they pay in many other ways to support the City of Ann Arbor. The things that University pays for a never mentioned by the City government, why would they, it wouldn't allow them to claim poverty and say that it's all UM's fault. AA.Com - can you give us an accurate reporting of everything the UM pays and has paid for. The City doesn't call it taxing, but they do take alot from the UM to support the City's budget. As an employee of UM and a non-resident (not by choice, I can't afford to live here, I would if I could), I am taxed to death by my county, township, village, the State of Michigan and the Federal Government, several people have tried to say, it would only be about $365 per year (or something like that), but that would be $365 I would have to remove from the budget I currently live by. Continuing to tax the working people of the State of Michigan is not a sustainable model. Hold the elected officials responsible, cut the fat like the rest of us have had to do. I can't get a raise when I want one, why should they. The argument that people who don't live here should have to pay for services, is self-serving. We already pay for many services here, directly or indirectly. We frequent your restaurants, we use local services and vendors and pump lots of money back into the AA economy. A tax is not the answer - fiscal responsiblity is.
Wed, Feb 17, 2010 : 10:17 p.m.
Forget the survey put the income tax on the ballet with a complete explaination and some tax examples. Voters can read. We don't need talking heads to educate us. Just give us the facts in writing on the ballet. Any survey needs to be directed at city voters only. The survey in this article is completely irrelevent due to non voter influence. The taxations without representation arguement doesn't fly because as one contrbuter mentioned implementing a city income tax is legal under state law and besides, we residents don't get to make policy decisions at the U of M even though it's supported by our state tax dollars.
Wed, Feb 17, 2010 : 9:19 p.m.
Not to long ago our Federal Government kept American workers competitive buy charging an import tax on products that were manufactured in places that supported inhumane labor practices. In addition to creating jobs, it produced taxes from foreign companies wishing to sell to Americans. Free trade agreements have forced americans to compete with slave labor, which is impossible thereby creating a huge loss of jobs and a loss of tax revenue used to support government services. Loss of jobs means less tax going to places like the City of Ann Arbor. My point is the problem is with the federal government. Taxing wages isn't the solution. The federal government needs to undue the mess it created with Free Trade. Local governments should be demanding the federal government solve the problem of job loss. The problem with income taxes is they never go away when instituted. Further, the City may claim it is only a small increase, but on top of the federal and state government increases, this tax burden is becoming quite large.
Wed, Feb 17, 2010 : 9:08 p.m.
No on Headlee override. Residents would be crazy to vote for "UNCAPPING" property taxes when we need additional relief from them. Allowing an override on Headlee would be like giving the city a blank check to spend as much as they want. An income tax would reduce property taxes for many, raise them for some, and provide an equalization of the tax burden for those that enjoy subsidized services in the townships they live in while working in Ann Arbor. Just the U of M alone add the equivalent of 48,000 full time non residents to the city with 38,000 employees and 35,000 full time students. U of M employees should be educated on the costs involved for police, fire, water, sewer, and the monies coming out of Ann Arbor going to the communities they live in. Traffic enforcement, actual busing costs (far exceed U of M contributions) and infrastructure costs. Would residents incur as many sewer back ups if the U of M wasn't taxing the infrastructure? What about court costs for processing and reporting of crimes? Yeah, students and employees spend money and contribute to the vibrant economy but rents are determined by fair market value, not property taxes. The value of the U of M is increased because of the city of Ann Arbor's attractions and safety. Make no mistake, your job might not exist if the U of M were located somewhere else so don't be to arrogant with that "Ann Arbor would be nothing without the U of M". The U of M may not be much without Ann Arbor because they've grown together and contributed and piggybacked off of each others sucesses. That relationship is continuing to mature and a city income tax is an element of that maturation process. So before you folks start screaming about taxation without representation you should check to see how much money comes from Ann Arbor taxpayers going into those townships you live in.
Wed, Feb 17, 2010 : 7:43 p.m.
"But, if A2 imposes an income tax, I move my home, my business, and the jobs of my employee-colleagues outside its jurisdiction." Eventhough with your property taxes lowered, from both your home and business, you'll probably end upsaving money? Good choice...take that Ann Arbor! Try to make you pay less money...how dare they!
Wed, Feb 17, 2010 : 7:39 p.m.
I don't quibble with every little expenditure the city makes because I'm not sure I understand the full story regarding every expenditure. I rely on the judgment of the mayor and council for many things. But, if A2 imposes an income tax, I move my home, my business, and the jobs of my employee-colleagues outside its jurisdiction. I will not pay another level of income tax for the privilege of living in A2 or for the privilege locating my company and its jobs there. When we move, we will buy less of everything in A2, eat fewer times in its restaurants, and send our kids to other schools. It will drive out the very people A2 needs in order to stay vibrant and interesting. A third income tax will put Ann Arbor into a downward spiral that we will wish we hadn't started, because once it is started, it will be difficult to get people and companies to move back in.
Wed, Feb 17, 2010 : 7:12 p.m.
"They should then cut their pay and the city administrators pay a percent for every million dollars they are over their budget. This is not rocket science." Wow great idea. Economy in the city/state/world is so rock solid i bet you can get people lined up around the block to take that job. Go ask the residents of the Delonis center if they can start next week.
Wed, Feb 17, 2010 : 6:57 p.m.
Why is everyone talking about whether or not there should be tax increases? The council needs to figure out how to cut spending. I suggest they start with the ridiculous art sculpture the mayor ordered. They could then cut the spending on the new court building. It looks pretty grandiose and over the top to me. They should then cut their pay and the city administrators pay a percent for every million dollars they are over their budget. This is not rocket science. It is called cutting spending and living within your means. If you can't do it then resign. None of us can afford the tax increases that are going to come our way from the city, then the county, then the state and then the federal government. People do not have money to be taxed! You have killed the golden goose.
Wed, Feb 17, 2010 : 6:57 p.m.
ok...I'm going to try this again..yes I know..I am repeating myself but at some point this will sink in. I believe this is a great solution to the City's tax issue. When you read this keep this in mind: A TUITION TAX WOULD BRING IN MONEY FROM OUTSIDE OF MICHIGAN. (Wouldn't we all prefer to shift the tax burden to people out of state rather than continue to hit the current Michigan taxpayers again?) Yes this would hit some AA people and some Michigan residents...but most of the money raised would be from out of state. 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. 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 an update, Pittsburgh decided not to do this for now. The people at City Hall in AA claim the current tax laws don't allow this. Of course those are the same people that are only interested in taxing the hard working people of Michigan.
Wed, Feb 17, 2010 : 6:51 p.m.
"You can always run for council and try to change the service structures, or at least vote in favor of council members that support your position." Yes and no. Although I could run for Council, no one can restrcuture the way property tax is collected right now. The city cannot just decide to lower the 60%+ of prop taxes that goes towards schools (meaning the city never touches it) so they get more monies. That's a state law thing.
Wed, Feb 17, 2010 : 6:17 p.m.
Hey non-residents - this is not being put forward by the residents of Ann Arbor, it is being put forth by government bureaucrats. Save your anger for them. I think the majority of residents will be dead set against this, too. The city government continues to spend unnecessarily while showing little regard for the difficult economic times most people are having. Non-resident workers are also customers and give greatly to this city.
Wed, Feb 17, 2010 : 6:15 p.m.
"I choose to live in Ypsi Township and therefore feel responsible for maintaining our roads, schools, parks, etc." There's the disconnect. Residents in Ypsi Township don't pay for roads. Your police services are subsidized by every taxpayer in the county who has their own police force, like Ann Arbor. You live somewhere that gets a level of service beyond what you pay in taxes. The reverse is true in Ann Arbor where the city residents are subsidizing services in communities whose residents are now protesting that they may have to pay a city income tax.
Wed, Feb 17, 2010 : 6:14 p.m.
"I pay property tax and I don't use most of those services. Some I could and choose not to, others I can't (schools) etc." You can always run for council and try to change the service structures, or at least vote in favor of council members that support your position.
Wed, Feb 17, 2010 : 5:54 p.m.
"I don't know if the University of Michigan contributes anything directly in taxes but I hazard to guess what Ann Arbor would be like without it." That's a moot point. It is here, it isn't leaving, we don't need to pray to it's alter everyday.
Wed, Feb 17, 2010 : 5:42 p.m.
I don't know if the University of Michigan contributes anything directly in taxes but I hazard to guess what Ann Arbor would be like without it. As the city's largest employer, likely many people who work there live in Ann Arbor and pay property taxes either on their homes or indirectly in rent, buy groceries and clothing, go out to eat, etc. because most who work at the U make a decent living wage. That spending in turn allows for the creation of more businesses and thereby more jobs. It is a wonderful cultural area. You who live in Ann Arbor choose to live there and by doing so assume the responsibility of maintaining your city. This is simply being a citizen. I choose to live in Ypsi Township and therefore feel responsible for maintaining our roads, schools, parks, etc. If you choose to come out our way, welcome! I doubt anyone will feel cheated if you use our roads or call our police department if you have an accident or problem on the road. But please don't expect us to cough up for an income tax just because we work in Ann Arbor. That you don't hold your elected officials accountable is not our problem. It would be the ultimate "sin tax".
Wed, Feb 17, 2010 : 5:20 p.m.
For a city taxpayer like me, this is a no-brainer. Why? Because with a city income tax, out-city people who work in the city would pay for our services that they use. With a Headlee amendment, City taxpayers will shoulder the entire increase. Headlee would force many taxpayers to leave the city. Support a city income tax!
Wed, Feb 17, 2010 : 5:12 p.m.
"schools, libraries, pools, shelters, leaf sweeping, X-mas tree disposal, etc. Surely the taxes paid by employers cover police services and the like." 1. If we're talking about UofM, the biggest employer, then there are no taxes to pay for fire services and the like. 2. I pay property tax and I don't use most of those services. Some I could and choose not to, others I can't (schools) etc
Wed, Feb 17, 2010 : 5:08 p.m.
I hear what you're saying Atticus. Except here we are talking about services someone else already gets, and "doesn't" pay for (grey areas abound for sure). So for you it would be more like getting most of Comcast channels for 'free' and then arguing you shouldn't have to pay it. Which I don't completely disagree with. You'd be free to move to another city and not use Comcast, over $6 a month.
Wed, Feb 17, 2010 : 5:04 p.m.
@Atticus: You misrepresented my argument. It's not about students but employees who live outside the city. They benefit from the high property taxes you correctly identified. That is a justification for income taxes on non-residents.
Wed, Feb 17, 2010 : 5:03 p.m.
1) If AA is looking for an income tax to cover a "budget shortfall", there is no reason to expect long-term property tax relief, as far as I can tell. 2) It's highly questionable that non-residents that work in AA are "taking advantage" of AA benefits: schools, libraries, pools, shelters, leaf sweeping, X-mas tree disposal, etc. Surely the taxes paid by employers cover police services and the like.
Wed, Feb 17, 2010 : 4:58 p.m.
Loka, if Comcast or At&t were to offer me some new great service for $6 out of each pay check, I would tell them to get lost. And for me, the income tax would equate to an even greater number than that. I just dont like squandering money on things I dont need. Even if it's only $6 out of each check.
Wed, Feb 17, 2010 : 4:28 p.m.
Still would like to hear more about tax for UofM students.
Wed, Feb 17, 2010 : 4:20 p.m.
"@Lokalisierung - there are quite a few employees at U-M, including myself, that make much less than 65k a year. Fire and sewer are standard operating expenses and are already paid by U-M." Ok say then if you make 30k a year you'll pay $5.76 a paycheck...does that help your point somehow? Tell me how UofM contributes to Fire service in Ann Arbor.
Wed, Feb 17, 2010 : 3:51 p.m.
Brad, The uofM students pay for these services when they pay sky high rent. The property taxes from the rental properties pay for AAPD, Roads, and fire service. So In other words UM-flint student and Wayne state, dont pay as much in rent/property taxes, which in turn is reflected by the quality of the city services in that area. So please dont give me any excuses about how the students are not contributing towards police, fire, and parks.
Wed, Feb 17, 2010 : 3:39 p.m.
@Lokalisierung - there are quite a few employees at U-M, including myself, that make much less than 65k a year. Fire and sewer are standard operating expenses and are already paid by U-M. The campus DPS covers nearly all of the security needs for employees. I personally don't drive into town, since U-M already pays the city $700,000 for bus service. They also help pay for local roads near the campuses ($1.3 million in 2007). I'm already paying a "shopping in A2" tax for all of the overpriced items that filter into the city's coffers. I may be an easy target since I don't get a vote, but I don't want a mandatory $200/$300/$400 charity donation to the city for nothing in return.
Wed, Feb 17, 2010 : 3:38 p.m.
@aachnsed: public safety. Yes, UM provides campus police, but if the city isn't safe, the campus won't be as safe. Think Wayne State or UM-Flint. Associated with public safety is the good quality of life which attracts good quality of people. Art programs, good schools and parks, DDA-sponsored downtown improvements are paid by taxpayers, and UM employees (and employees of other businesses) indirectly benefit from these. Again, think Detroit or Flint.
Wed, Feb 17, 2010 : 3:16 p.m.
My state representative votes on the city income tax?
Wed, Feb 17, 2010 : 2:58 p.m.
Simply moving the business outside the city limits, if this passes (which I doubt). Lower lease rates, easier to recruit talent w/o additional tax burdens for employees, and still close enough to benefit from the metro area. The city will lose tenants, incidental spending of staff (lunches, parking fees, etc.) and new businesses in the future. The city is heading down the road of other overtaxed juristictions (Detroit, etc.) which lost most of their businesses to the suburbs. The city needs to balance the budget by cutting the spending, not trying to squeeze more blood from the citizens (and non-citizens) to maintain the bureaucracy.
Wed, Feb 17, 2010 : 2:56 p.m.
I am stunned by the purchase of half an acre of "park land" for $350k. Stunned. Surely whatever millage was approved for this purpose was not approved with this type of spending in mind. I have to wonder if the whole program is hopelessly corrupt. A newspaper with real reporters would investigate if any of the council members have a connection to the group receiving that windfall from our pockets.
Wed, Feb 17, 2010 : 2:53 p.m.
Here comes the numbers again...Johnny UofM makes 65k a year (nice!),.05%/65000 = $325 a year. $325/26 paychecks a year = $12.5. It it reasonable to charge Johnny $12.50 a pay check for these services?
Wed, Feb 17, 2010 : 2:46 p.m.
"@Lokalisierung - what city services are U-M employees using that U-M isn't already paying for, or independently providing?" Fire, Sewer, Police (they still use city police, Roads (including that great bridge the city is about to cough up 22 million for and the U nothing).
Wed, Feb 17, 2010 : 2:32 p.m.
@Lokalisierung - what city services are U-M employees using that U-M isn't already paying for, or independently providing?
Wed, Feb 17, 2010 : 2:29 p.m.
If non-residents don't like the income tax, they can contact their state representative. The income tax is permitted by state law. There's your representation.
Wed, Feb 17, 2010 : 2:25 p.m.
I have no problem paying taxes as long as I had a legally binding say in how they were spent. For instance, I use Ann Arbor roads every day, but if the coucil decided to spend it on say, the airport, I'd have no way to redress that.
Wed, Feb 17, 2010 : 1:57 p.m.
I guess the question is do you think it's fair for somone working in this town to pay.05% of their paycheck fro the services they use every day? For me i say yes, but not everyone would agree.
Wed, Feb 17, 2010 : 1:44 p.m.
I echo a previous comment about the cost of the.58 acres of land the city agreed to buy for $381k. Was this parcel ever assessed, or did someone just come up with a number. It's been years since land in Ann Arbor has sold for anything even close to that cost per acre. Another example of council being loose and careless with out tax dollars.
Wed, Feb 17, 2010 : 1:41 p.m.
The City Charter says "In any calendar year in which the Uniform City Income Tax Ordinance is in effect on the day when the budget is adopted, the City may not levy any part of the three-fourths of one percent property tax previously mentioned but may still levy such other general tax upon real and personal property as is otherwise permitted by law or by another subsection of this charter." That means an income tax can't be imposed without lowering the property tax.
Wed, Feb 17, 2010 : 1:12 p.m.
An additional comment - I prefer cost cutting first but I still think an income tax is fairer all around. If the place where an non-resident lives also taxes by income instead of property tax, I think law requires a coordination of those so that they would perhaps not have to pay and A2 income tax. I hear the cries of taxation without representation - I agree that is an issue but if your township of city did an income tax as well then perhaps not - I think the city could choose to not tax non-residents (I think the law does not require it)
Wed, Feb 17, 2010 : 1:09 p.m.
"The income tax, despite its greater admin costs, is a fairer tax than a property tax which has no bearing on a property owners ability to pay." Yes you are correct. One group of people think it's a way to gain more money instead of using the money they have wiser...which is a logical point and i agree with. If you want to really tunderstand the other 75% you have to put on your tin foil hat and relate to them. They think magically the rates will increase eventhough thagt would take a vote from residents. They think they will have to pay their prop tax AND an an income tax which isn't true. They think everyone will instantly move out of town and quit their jobs (in the worst economic times of our lives) to save $400 a year. They think how much rent they pay is a mathmatical equation that relates to a landlords income, which it doesn't. They think small business owners will go bankrupt, eventhough this tax has no effect on them. And some other things I can't remember now.
Wed, Feb 17, 2010 : 1:02 p.m.
Ok I'm not good with analogies...I'm guessing that A2 residents are the British, so non residents that work here are going to revolt against us?
Wed, Feb 17, 2010 : 1 p.m.
I still can't understand the amount of objection to an income tax. I think that by law, the income tax for residents is limited to a max of 1% (could be less) and 1/2% to non-residents (could be less) and would definitely replace the city's part of property tax (not the school part or the county part). The largest employer in the City is the U and they won't leave if an income tax is instituted and non-residents employed by the U are not likely quit their job. The income tax, despite its greater admin costs, is a fairer tax than a property tax which has no bearing on a property owners ability to pay.
Wed, Feb 17, 2010 : 12:45 p.m.
"Assessing taxes on non residents causes an old phrase to come to mind. Taxation without representation. Anyone remember that one?" I remember it. It's a slogan and as far as I know not a law or included in any Amercian historical document.
Wed, Feb 17, 2010 : 12:44 p.m.
Fraser and Crawford are always pushing "revenue increasements' rather than quit spending what they don't have. when the 2 top money grabbers take a 15% pay cut then I would beleive they are serious about living within their budget...until then "no more tax monies for them to squander"
Wed, Feb 17, 2010 : 11:58 a.m.
Assessing taxes on non residents causes an old phrase to come to mind. Taxation without representation. Anyone remember that one?
Wed, Feb 17, 2010 : 11:56 a.m.
Allowing them to raise our taxes is the same as enabling an alcoholic. They have negociated their spending habits like drunken sailors.
Wed, Feb 17, 2010 : 11:20 a.m.
Why not just kill all business in AA by levying a city sales tax too? That everyone else pays for the city's extravagant spending. Tink, spot-on.... Here's a novel idea, when/if the income tax passes, why don't you go to your employer and demand that your salary increases to offset the tax?
Wed, Feb 17, 2010 : 11:15 a.m.
My question is is it morally right to tax people who work in Ann Arbor, even though they dont use A2 parks or services. To me it's about right verses wrong. It might be appealing for some A2 residents to force outsiders to pay for their extravigances, but I think it's not fair.
Wed, Feb 17, 2010 : 11:02 a.m.
An Ann Arbor city income tax is an excellent idea! Who needs these upstart companies like Google bringing jobs to the area. I don't know about you but I really don't want new inovative companies considering opening their operations in Ann Arbor! Wow! what a bunch of GENIUSES on ciy council. Stephanie I totally agree with you.
Wed, Feb 17, 2010 : 10:06 a.m.
The income tax would never pass. Citizens have no confidence now that their elected officials are managing their money correctly. They are not about to give them more money.
Wed, Feb 17, 2010 : 10 a.m.
The two methods of increasing revenue have profoundly different effects on individuals. A Headlee increase would cost current taxpayers more money. An income tax would eliminate the general operating millage (according to a summary by the Ann Arbor Chamber of Commerce, this is required by the city charter). Thus, for current property tax payers, the Headlee increase would mean an increase without offset, but an income tax would result in a property tax decrease and an income tax that may or may not offset the decrease. Retirement income is excluded and an exemption level would prevent extremely low income people from paying significant tax. Another important difference is that an income tax expands the tax base to individuals not currently paying tax and the Headlee override limits tax recovery to current taxpayers. I agree with the comments that a survey is not useful. Why not put the measure on the ballot and then let both sides debate the issue? Also, the earliest possible vote would be in August, so none of this can affect the city budget for this year, since any tax changes would take another year to take effect. A question for AnnArbor.com reporters: isn't it true that the city is not charging the full millage amount permitted by law? (Other than the Headlee reduction.) What barriers are there to increasing the millage to its full amount immediately?
Wed, Feb 17, 2010 : 9:52 a.m.
I, too, work at UofM and live in an nearby township. I pay taxes based on the value of my home. If there is a proposed tax increase, I have the right to voice my opinion by voting. Will I have the right to vote on having my income taxed even more? I also pay over $600 per year for the luxury of parking near the hospital. What I find most puzzling in all of this is that there is little mention of what the University of Michigan contributes to Ann Arbor, directly or indirectly. The health system draws people from all over Michigan and other states. These people and their family members spend money in Ann Arbor for food and lodging during their stays. Some patients are here for months so they rent apartments, more monies spent here. Athletic events bring in thousands of people who also eat at your restaurants, stay in your hotels, pay to park, shop downtown. We who work in A2 frequent your stores, restaurants, the Art Fair, etc. The University contributes much money to your transportation system. And on and on. Your representatives voted to spend over #380K to purchase a little over half an acre of land (is there another entrance to this park?), nearly $22K for a consultant. Those are just the antics for this week. And you want those of us who must commute to work in Ann Arbor to subsidize this? Wouldn't it be smarter to vote in some fiscally responsible representatives? Ann Arbor must simply learn to live within its means. If this income tax is approved, I will have to make up the difference somehow. My choice will be to forego spending anything, ever, in Ann Arbor. No more stops at Trader Joe's or Whole Foods on my way home. Sorry Real Seafood, Seva, etc., can't afford you any more. The Art Fair, think I'll skip this year (there is a nice art fair up north in Harrisville Labor Day weekend). I'll choose to keep the rest of my money local or in Canton, which is the same driving distance for me. Maybe the other tens of thousands of commuting workers should do the same.
Wed, Feb 17, 2010 : 9:43 a.m.
@limmy "using all of the facilities absolutely free"... could you explain what facilities I'm using? I take the A2 bus from a park & ride, and U-M already subsidizes my fare. I work on campus which U-M maintains and provides its own services. I'm not understanding why U-M employees should pay any tax directly to the city, other than being caught in the crossfire of a random taxing.
Wed, Feb 17, 2010 : 9:35 a.m.
The council voted to spend $381,170 for just over 1/2 acre, unbelievable!!!!! That's over $750,00 an acre! How can they keep spending our money this? I know about the "buckets", but let's just STOP spending unnecessarily for a year or two.
Wed, Feb 17, 2010 : 9:01 a.m.
racerx - maybe the city should hire a consultant to manage all of its consultants?
A Concerned Citized
Wed, Feb 17, 2010 : 8:55 a.m.
As a UM employee who doesn't live in Ann Arbor (I can't afford to) I am extremley upset that some people see "taxing UM indirectly" as the way to go. You would not be taxing UM, you would be taxing the people that work there. Keep in mind that we also pay taxes where we live. I pay township taxes & village taxes. I pay extra mills to my local school to support their budget because they too can't seem to live within their means. I did not get a raise last year, although all of my benefit costs went up. The year before, when I did get a raise, the State income tax increased and I wound up making less than I did before my raise. I pay extra taxes on the amount of gas I use to make the commute to work, I pay for the "privledge" to park at work. Now you are looking at making me pay for the "privledge" of working in Ann Arbor. Don't tell me to find a job in my area because the unemployment rate in my county is 16%. Your city council needs to stop looking to raise taxes, income, property or otherwise and live within their means like the rest of us. If I don't have the money, I can't buy it. Why should it be any different for them. I can't go to my employer and say you need to give me a raise because I can't live within my means. They would laugh me out of the office. Stop looking for quick and dirty fixes and do the honorable thing, live within your means, do more with less and we'll all be happy.
Wed, Feb 17, 2010 : 8:49 a.m.
I think the income tax needs to be considered. We need more information and some open, honest discussion though, before we take a vote. Based on the accompanying property tax rollback, I think it's not a bad thing for the residents of Ann Arbor. You can only cut expenses so far before you impact quality of life and community.
Wed, Feb 17, 2010 : 8:44 a.m.
Yes to income tax and no to any more property taxes. The property owners are taxed to death. Hundreds of people come into Ann Arbor every day using all of the facilities absolutely free. Living in Ann Arbor no longer means living in the city limits. Why can't you park on the Old West Side streets? Because they are jammed with people coming into the city, parking all day for free and walking in to work. All of the perks of living in Ann Arbor are now available for free without living in the city limits. Things have changed and there needs to be a way to capture revenue from people other than the property owners.
Wed, Feb 17, 2010 : 8:41 a.m.
You can tell the city council is not taking the budget seriously when they vote money for new park purchase and an Art consultant! I so glad I live in LA LA land!
Wed, Feb 17, 2010 : 8:19 a.m.
When one says draconian cuts, what does one think we need "draconian increases", if their is not bias in this article, then we no longer have a constitution! We will not override the "Headlee Amendment" in Fact Mr Headlee's Birthday should be a "Michigan Holiday", as it one of the few things we have left to be proud of in this state. Certainly being the most "taxed" is not a great quality for most Americans, we are still Americans are we not? So when one refers to draconian cuts, make sure you have a crippled audience that can not understand your true inner meaning! Maybe someone had too many donuts yesterday, this is still America like it or not! I remain, as I was before I had to read this ugly story of taxation of my nation!
Wed, Feb 17, 2010 : 8:13 a.m.
Stephanie, You said it all. The city of A2 needs to live within its means. Nothing more,nothing less. They cannot continue to come after taxpayers.
Wed, Feb 17, 2010 : 8:12 a.m.
I'm open-minded on the issue of an income tax. While the University contributes a ton to the local area, indirectly taxing it via an income tax is appealing -- especially if it is offset by lower property taxes. Besides, lower property taxes means Berriz would be all for it, right? On the survey -- it could provide meaningful data, but only if it's done correctly. Respondents would have to choose between various scenarios, and from those choices support for an income tax could be derived. Taxation is not something you can ask about directly and get useful information. Imagine the different responses you'd get for these two questions: Q1 "As you may know, the University of Michigan is exempt from paying property taxes to the city of Ann Arbor. And people who live elsewhere and work in Ann Arbor also pay no taxes to the city. Would you support a tax system that reduced the relative tax burden of Ann Arbor homeowners by shrinking property taxes and replacing that lost revenue with a small income tax?" vs. "Do you support instituting an income tax in Ann Arbor?". The better solution is to ask respondents to make various tradeoff decisions between different taxation scenarios. But those kinds of surveys are costly.
Wed, Feb 17, 2010 : 7:59 a.m.
Don't believe for one second that your property taxes will go down if the income tax is passed. The city is looking to reduce the budget deficit, not give residents a tax break. If anything an income tax will give new companies incentive to locate outside of city limits.
Wed, Feb 17, 2010 : 7:58 a.m.
NO on "override" of the Headlee amendment! Property taxes are already ruinous...the property taxes on our house make my/husband's effective tax rate 40%! Cut spending, tighten your belts, make due. Hey, I'd LOVE to remodel, buy a newer car - but wait, I have bills, loans, debt that I have to pay first. Deal with it like everyone else.
Wed, Feb 17, 2010 : 7:38 a.m.
Please vote YES on the income tax. Taxes on my rental properties are just too high.
Wed, Feb 17, 2010 : 7:27 a.m.
Why is levying a city income tax which will bring in money from non-residents a bad thing?! There will be an offset to reduce our property taxes so presumably each resident shouldn't be affected too much. A Headlee override, even if "it may be less cumbersome to ask voters to approve" means only residents will see an increase in taxes! No one is gonna say they will quit their job in Ann Arbor just because of a city income tax - in this economy there would be hundreds of person applying for that job!
Wed, Feb 17, 2010 : 7:26 a.m.
Surveys are rarely genuine attempts to discover public opinion. Many times, government officials use surveys to advance their own agendas. Council knows the public does not support an income tax. Perhaps Roger Fraser and pro tax Council members hope a cleverly worded survey can be used to try to convince the public that an income tax is a good solution. If you look closely at this tax proposal, I think you'll find that it is a very expensive and inefficient way to raise revenue. Also, it lowers corporate taxes by about 7 million dollars and shifts that tax burden to individuals. True, it does capture some revenue from the U of M, but it's so messy and unbalanced that it turns out to be a bad idea. There has to be a better solution than the proposed income tax. My personal favorite would be to prevent the city from continuing to spend huge amounts for new construction.
Wed, Feb 17, 2010 : 7:20 a.m.
Could someone tell me why a consultant is needed to administer the city's public art program?, and be paid $21K for 6mos.? Isn't there an art committee already? Could the same people who decided the German art for the new Court/City bldg have gave their input?
Wed, Feb 17, 2010 : 6:43 a.m.
Why would you waste more time and money doing a survey? I think that we need a mayor and a city council that learns to live within their means. They have been on a spending spree and now they think the residents are going to bail them out. I think they should all cut their salaries to zero for the lack of responsibility they have shown. Ann Arbor has one of the highest tax rates in the state. In case none of our council members has read the news, the people in Michigan have no money. There is nothing to tax. People are losing their jobs and their homes and our council members think they are going to tax their way out of this mess. I really think they should all resign.