Is it time to start thinking about a city income tax? Ann Arbor council members weigh in
Talk of implementing a city income tax in Ann Arbor has reemerged in budget discussions lately as city officials find themselves grappling with the formidable challenge of addressing a $5.2 million deficit.
Mayor John Hieftje said he's never personally been a fan of a city income tax, but it may be worth exploring as an option.
Ryan J. Stanton | AnnArbor.com
But even if an income tax was implemented this year, city officials say it's not likely to impact the budget for another year. For that reason, they say it's probably not the answer to today's problems, but it could arguably stabilize the budget in the next few years.
A feasibility report presented last July showed a local income tax could raise $7.6 million to $14.2 million in new net revenues for the city, depending on the level of tax. That's after factoring in expenses and a 15 percent drop in property taxes that - per city charter - must go hand-in-hand with any income tax.
The leading option discussed in city circles has been to tax residents at a rate of 1 percent of their income and non-residents at a half-percent.
City officials acknowledge it will take a hard-fought campaign to educate voters about the benefits of an income tax. For instance, they stress, it would shift a portion of the city's tax burden off residents and onto the estimated 75,000-plus commuters who work in Ann Arbor but don't live here or currently pay taxes.
The tax question ultimately would be up to city voters to decide, but the Ann Arbor City Council first must act to put the question on the ballot.
AnnArbor.com put the question to City Council members this week: Is it time to start thinking about an income tax again?
A majority of them said yes.
Sandi Smith, D-1st Ward - 'a city income tax needs to be considered'
Sandi Smith
It is time to consider everything. Even if we can cut enough to balance the FY10 and FY11 budgets, we cannot cut our way to prosperity. A city income tax needs to be considered, as does a Headlee rollback. We also need to look at all of our fees for service and opportunities to expand our tax base, both of which are extremely difficult in these challenging economic times. Ultimately, I would hope that we can get structural changes at the state level through a Constitutional Convention, but that is another conversation.
Sabra Briere, D-1st Ward - 'not convinced that an income tax is the best income generator'
Sabra Briere
I have looked at the other cities that implemented income taxes years ago. Ann Arbor is, I believe, the only Michigan city that would have to offset an income tax with property tax relief. Right now, at least one city is returning to the voters asking for an income tax increase because incomes are down. I'm not convinced that an income tax is the best income generator, but I am convinced that it would be a mistake to look for new revenue without a public discussion that results in setting clear priorities and long-term goals for services and capital expenditures. The discussion (Monday) night at council was unusually frank, but still had little momentum. I trust the council will find more creative solutions than an appeal for taxes without the administration committing to a clear change in the way the city does business.
Tony Derezinski, D-2nd Ward - 'it's time to look at it for Ann Arbor'
Tony Derezinski
The city's present and dire financial situation must prompt us to consider equally substantial changes in our service costs, but also in our revenues and their sources. And that includes consideration of a shift from use of operating revenues generated by property tax, which would be eliminated if we restructured to use of a city income tax. State law and our charter would allow us to impose an income tax not only on residents, but also a portion of it on those tens of thousands of non-residents that work and earn their livings in Ann Arbor. I previously worked in Grand Rapids, and paid its income tax even though I lived in Muskegon, with none that time, and worked in Lansing and paid theirs, while living here in Ann Arbor. I felt that the $300 or so dollars I paid respectively was quite fair and equitable for the munical services I received from those cities. It's time to look at it for Ann Arbor.
Stephen Rapundalo, D-2nd Ward - 'there's a lot to be said in favor of the city income tax'
Stephen Rapundalo
I think we have to be thinking about all possible alternatives, including a city income tax. So I think we need to understand the current model and implications, we need to understand the Headlee Amendment override and the implications of that, and we should look at a city income tax model and the implications of that and educate the public on those three scenarios. And I would definitely support putting either of the last two on a ballot for the residents to consider. I think it would be irresponsible for us, in dealing with this whole budget, to not explore all possible options, make the case very clear as to what each of those options will mean to the public, and then put it out there and let the public speak. I think there's a lot to be said in favor of the city income tax. There's certainly some things to be said for the Headlee, but I personally don't care which one of those it is, so long as everybody understands that whatever path we take, that's what we're going to have to live by.
I think we're going to have to give direction to Roger Fraser and Tom Crawford to say, 'Look, develop these scenarios under each of those models and make a presentation to us as part of the budget deliberations and make us understand what each would involve.' And then it would have to be up to us to move something forward or not for a ballot consideration. But I would agree with many of my other colleagues that we, at the very least, owe it to the public to explain to them what the possibilities might be. We should at least have a dialogue that's out there in the community. I think we'd be selling ourselves and the public short if we didn't fully explore everything.
Stephen Kunselman, D-3rd Ward - 'opposed to a city income tax'
Stephen Kunselman
I have always been, and continue to remain, opposed to a city income tax that is premised on transferring the tax burden from commercial property owners to resident and non-resident working families. Furthermore, I do not trust the administration’s grossly exaggerated income tax revenue predictions as they are based on the administration’s assertion that over 70,000 commuters work at jobs within the city. This assertion is clearly flawed as it is based on extrapolated data from the year 2000 and most obviously does not account for the significant loss of jobs resulting from the closure of Pfizer or the state’s worst recession since the Great Depression.
While I understand the dire fiscal crisis our city faces, I have little faith in the administration’s proselytizing that a city income tax will be the great savior of the city’s general fund. This administration promoted a fiscal policy of "borrow and build” that has led to the largest public debt our city has taken on in my lifetime - only when the administration preaches a “stop the spending” fiscal policy will I begin to think the administration is serious about the city’s financial future.
Christopher Taylor, D-3rd Ward - 'we need to have an informed, wide-ranging community conversation'
Christopher Taylor
As we all know, declining property values, the drop in state revenue sharing and the university's purchase of the Pfizer property have contributed to the city's structural and unprecedented multi-million revenue shortfall. The city has reduced its workforce by 25 percent over the past eight years and made other substantial efficiency improvements, but the time of easy cuts is over.
I believe that we need to have an informed, wide-ranging community conversation about our options - about what kind of city services residents want and what kind of city services residents are ready to support. I believe that the citywide conversation needs to include the possible outsourcing of city services, a possible Headlee override referendum to increase property taxes, and the possible wholesale elimination of some services/amenities. It should also include discussion of a possible citywide referendum on whether to restructure Ann Arbor’s tax base to reduce property taxes by 15 percent and implement an income tax of 1 percent on residents and 0.5 percent on non-residents who work in Ann Arbor.
None of this is easy and there will be good, deserving people whose quality of life and pocketbooks will suffer no matter what we do. This is what happens in difficult times. Our job is to ensure that the decisions we make as a community balance present day expectations with our obligation to serve as stewards of the city for future generations.
Margie Teall, D-4th Ward - 'in favor of putting the question to the voters'
Margie Teall
My neighborhood has been having an active discussion about this online, and it is my belief that as residents begin to learn the facts regarding such a proposal, they are generally in favor of bringing the conversation back and putting it before the voters. I have always been in favor of putting the question to the voters, but I recognize that this would require spending some dollars to get the facts about it out to them. This includes letting them know about possible exemption rates and exemptions for senior citizens and other vulnerable populations in the city. Many people don't realize, after all of the talk that we have had about doing this over the past six or seven years, that according to our own city charter we have to eliminate the operating property tax millage (6.1682 mills) if we implement an income tax. As Mr. Fraser pointed out (Monday) night, no other cities in the state have to operate under this restriction.
So, as much as the severe cuts to the city's budget might make people more open to considering a city income tax, they equally need to understand what it is that we could consider. Otherwise, the rhetoric from those who automatically oppose any tax at all becomes the story, and those voices tend to disregard how careful we would want to be in the implementation of a city income tax.
Carsten Hohnke, D-5th Ward - 'I don't think the income tax is a good solution for us'
Carsten Hohnke
I think we need to follow a two-step approach. I've been having a vigorous and constructive conversation with Fifth Ward residents about the type and quality of services that we want the city to deliver. That conversation is being reflected at council working sessions like the one we had last night. Once the community works through that, we'll have to tackle whatever gap between expenses and revenue there might (or might not) be. I don't think the income tax is a good solution for us, but I'm eager to listen to input from Fifth Ward residents. If we put the question to the voters, we have a responsibility to pose it clearly.
Mayor John Hieftje - 'it should be discussed'
John Hieftje
For the next few months our focus needs to be on balancing the budget that begins on July 1, 2010, because even if council decided to put something on the ballot and voters approved it, new revenues would not arrive until July of 2011.
Many Michigan cities have already put a revenue increase on the ballot or they are talking about it, so it would not be a surprise if council debated this at some point. Giving the voters a choice between continued cuts or a revenue increase option is something I have been hearing about from residents. It should be discussed at some point.
If/when revenue enhancement is discussed, there are two options for cities in Michigan, both would need voter approval. Our charter requires a roll back of the property tax should an income tax pass. Because of this many residents would break even or the increase would be moderate. Others would pay more and some would pay less. Business would pay less due to the property tax break but their employees who live outside the city would pay more.
The amount of increased revenue would be influenced by several factors but the level of the exemption would be the most important. The overall millage rate for the city portion (28 percent) of property taxes is lower today than it was in 2000 because of the Headlee Amendment to the Michigan Constitution. Each year the city's millages go down a little. If voters approved a Headlee override, the millages would go back to where they started. This would result in new revenue of $6.1 million but there would still be a problem in subsequent years because property taxes and other revenue sources are expected to continue to go down in 2012. Revenues from an income tax are projected to be better able to meet funding need in future years.
Council members Mike Anglin, D-5th Ward, and Marcia Higgins, D-4th Ward, could not be reached for comment on Tuesday. In past interviews, Anglin has acknowledged opposition to the income tax proposal and Higgins has been in favor of putting the question on the ballot for voters to decide.
Ryan J. Stanton covers government for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529.
Comments
JE
Sun, Feb 21, 2010 : 3:15 p.m.
This is a slippery slope. What about long-distance telecommuters? Never set foot in AA but are taxed for "working" there?
AlphaAlpha
Sat, Feb 20, 2010 : 6:29 p.m.
Hello Bruno - The 4% compensation you mentioned would save over $3.5 million per year: $89,513,489 times 4% = $3,580,539.56. The source of the $89 million is described several comments above. A 5.8% reduction would eliminate the entire $5.2 million deficit. A 29% reduction would align city compensation with national averages, saving $25 million per year. Reductions should be uniform and across the entire workforce. AAFD has begun this process; they deserve commendation for that.
AlphaAlpha
Mon, Feb 15, 2010 : 9:13 p.m.
Moose - Thank you for the excellent link to the City of Ann Arbor Position Summary by Fund. It contains much compensation related minutia, but only summarizes small units of labor at a time. Their use of the word Summary is a bit misleading: broad summaries (such as total city wide compensation) are excluded, at least from the 107 pages cited, so this document is problematic for determining the average wage earned by our city workers. Thankfully, the 2010 Budget Book does provide totals, and those totals are the ones used earlier to determine total annual average compensation. Perhaps you (or someone) could tally the 107 pages of compensation subtotals? That would be helpful-for a number check. One would only need to add the values shown in the 'Total' column, which includes all the various other compensation types also shown. We could compare that tally with the 2010 Budget Book tally. And have a good double check of the calculations already presented. Regardless, at first glance, your link and the data in it seem to reinforce the validity of my calculations. Many compensation levels exceed $100,ooo per year. Too many? I will ask again, if anyone can run the numbers better, please do. Just show your work and cite your sources. Thank you.
AlphaAlpha
Mon, Feb 15, 2010 : 6:23 p.m.
Let's be clear everyone. Total compensation = total earnings = salaries plus benefits. Total compensation is the key number. Discussing income without discussing benefits is misleading and should be avoided.
AlphaAlpha
Mon, Feb 15, 2010 : 6:05 p.m.
Hard to believe Moose said: "Still waiting for Alphax2 to do some real reading about wages in the city budget instead of just spinning statistics to suit a political agenda that wants to cut down working people's wages and health care benefits." without actually adding any facts to the discussion. I showed my sources, calculations, and results. Can you do likewise? Show us your numbers. Show us your sources, calculations and results. Thank you.
Awakened
Mon, Feb 15, 2010 : 7:08 a.m.
Thanks for the correction, Moose. My position is that I am skeptical of the agenda anytime professional politicians give statements to the press. I am concerned that they highlight cuts to essential services to make a pitch for a tax. I am concerned that they have created or pushed for some of these "buckets" so that they don't have to make hard cuts. They just have to ask for more. I am worried that we are all getting spun.
bruno_uno
Sun, Feb 14, 2010 : 11:52 a.m.
moose- this economic meltdown globally is not what i am discussing, please stay focused on my point the local crisis with our budget in the fact that the local tax base can not support the wages of the employees of the city of Ann Arbor can be resolved with a reduction in wages and benefits across the board for union and non union workers. notice i mention non union workers as well which would be the administrative extra fat in salaries you mention. this is not an anti-union stance, im just trying to make an easy, direct and very quick resolve to our issue at hand. however, its being blocked by people that feel its not necessary for unions to open up the contracts, reduce the salaries, and balance our budget. this is a no brainer with someone like me that has no agenda other than to balance the crisis.
Moose
Sun, Feb 14, 2010 : 11:39 a.m.
Not true. AFSCME members are prohibited by law from striking the same as police and fire.
Moose
Sun, Feb 14, 2010 : 11:08 a.m.
Everyone who cites and spins statistics to suit their premise has an agenda. Some people, like me, are willing to honestly relate their opinions to a bigger picture instead of concealing their personal political agenda behind statistics used to support their real intent and in this case it's union busting, plain and simple. I don't want a city income tax because it's a job killer and will drive business out of the city. It will never happen if it goes up for a citywide vote. Even though I might come out ahead in my personal economics, I don't trust their statistics either or rosy predictions. At the same time, the city's structural deficits built into the budget by poor fiscal management and profligate politicians spending beyond the taxpayers means, will saddle taxpayers with long term debt that cannot be changed simply by cutting workers wages or getting rid of unions... as it appears that a few posters here believe is the only answer and demonstrate that position by refusing to consider that it was council and city administration who spent on things we don't need and continue to make economic forecasts based on rosy predictions. I dare anyone who's left in this discussion to honestly reveal their personal political motives, connections and intent behind their opinions. I put mine out there and think everyone else should too. Just so we all know where we're coming from when we talk about whether we support working people or those who ran the economy into the ground. This economic meltdown, locally or globally, didn't happen because of unions or working people's wages, yet there are many people who eagerly blame them. If the statistic spinners are so smart and anti union whiners had any guts, they'd take their "data" to council chambers and let them hear what they have to say.
Awakened
Sun, Feb 14, 2010 : 11:05 a.m.
@brunouno. Act 312 only covers police and firefighters. It doesn't cover anyone else in the City. They bargain normally and can strike if they wish. I agree that employee cost, mostly benefits, need to be brought into line with the greater community. But calls for percentage cuts in wages don't help. If you look at what the sanitation workers make, or the street crews, or the foresters, and compare their wages to private industry you will find they are about the same. Its guaranteed benefits and the suplus of supervisors and administarors that separate the government staffing. Benefits will be negotiated down (with or without 312) over a couple of contracts. Reducing supervisors and administrators could be done with a stroke of a pen. The current plan for 2010 is to layoff 9 cops on the street but retain the same number of supervisors. Really? Shouldn't the supervisors for these 9 be reduced in rank and put on the street?
Moose
Sun, Feb 14, 2010 : 10:32 a.m.
Still waiting for Alphax2 to do some real reading about wages in the city budget instead of just spinning statistics to suit a political agenda that wants to cut down working people's wages and health care benefits.
bruno_uno
Sun, Feb 14, 2010 : 10:28 a.m.
moose- your diverting off topic, we are talking specifically about a shrinking tax base to pay unions the salary and benefits they currently have. please do not bring in the emotional plight of the extremely important jobs fire fighters and police do for us on a daily basis. this is specific to the salary cuts needed to match the existing revenues to pay for those services. its nothing more than that.
bruno_uno
Sun, Feb 14, 2010 : 10:17 a.m.
awakened- we are not talking about the services that the union workers perform, please dont signal out fire fighters and police civil servants because they have duties that directly impact the health of the public...if you look into each civil position, they really all are based on a function of the publics health, saftey, and welfare. what we really should be concentrating on is the removal of unions to allow the budget crisis to be fixed for the public at large. we have a shrinking tax base, if we can just forget the rest of these big ideas which are a waste of time, effort, money, and energy, then we can successfully cut wages across the board (union and non union) to match correspondingly with the tax base available to pay them.
Moose
Sun, Feb 14, 2010 : 10:10 a.m.
Are the people who condemn Act 312 the same people who allegedly support Police officers and Firefighters? Are these the same people who continue to elect politicians who work against their own economic interests by denying health care coverage and living wages for all Americans? Are these the people who want to drive the USA to the economic bottom by cutting wages and benefits for working people in the USA so corporations can make bigger profits? Are these the same people who decry unions and the benefits that they helped provide to ALL people in the USA while looking the other way at outrageous corporate profits and CEO payouts? Are these people who want to cut the throats of working families who are their friends and neighbors, during this new Great Depression? Are these the same people who voted for and supported Bush and Cheney when they turned Clinton's budget surplus into dust and created the Bank Bailout and pay offs to the wealthiest corporations then left the mess for Obama to clean up?
stunhsif
Sun, Feb 14, 2010 : 12:16 a.m.
"Heh, just remember this is all George W. Bush's fault. Why the heck stop with a 1% income tax? Let's hit a total home run and go 2% for city residents and 1% for non residents!!!, Wait a second, let's go 3% and 1.5%, who the heck will miss the 20 bucks a week. This is just 4 coffee drinks at Starbucks. After all, how can someone justify not paying their fair share when they can still afford to buy a coffee at Starbucks or Biggsby or Wherever Coffee Shopp!!! We've all had too much Who Hash and Briegel the Beagle.
Awakened
Sat, Feb 13, 2010 : 6:23 p.m.
While you fight Act 312 remember two points. 1. The last Act 312 was filed on the police union by the City and the City won 5 of 6 issues. When they blame 312 usually they are trying to cover the things they gave up. Not the 312 ruling. It probably is the City's continued success at 312 that made the Fire Department make concessions and not file 312. 2. Act 312 was created to prevent public safety and EMS Unions from striking. What if the fire department had decided not to make concessions and decided to just not respond to 911? Be careful what you wish for.... If you google Act 312 there is a site where you can read the rulings. AAPD's can be found by searching for 'Ann Arbor.'
bruno_uno
Sat, Feb 13, 2010 : 11:23 a.m.
we can start a citywide propaganda machine similar to the teachers plight and call it "it takes a village"...and then under that heading have the caption "saving city employee jobs"....but we need to all fight this Act together.
bruno_uno
Sat, Feb 13, 2010 : 11:18 a.m.
can someone do the math on a 4% cut across all city employees and politicians? id like this number out there so we can get going on fighting this 7 Act 312 that the unions are holding onto. We can do this I think if we all go after the same fight instead of all these varying opinions on this blog. lets get united and oust the Act that is causing us taxpayers to fight the city.
bruno_uno
Sat, Feb 13, 2010 : 11:03 a.m.
75% of the citys workers belong to unions and subject to Act 312 arbitration....lets put all of our time, effort, resources, and fight this Act. All other discussion is a waste of time, money, and most importantly to Ann Arborites, our energy.
Moose
Sat, Feb 13, 2010 : 9:39 a.m.
Go here and see what wages are. Count the ones that are over 100k http://5045264755086955750-a-1802744773732722657-s-sites.googlegroups.com/site/fy20102011salaryybenefits/Home/FY2011PositionsbyFund.pdf?attachauth=ANoY7cpBMvkIPRvM8moAE7mWLvFfwWQKGP9Zw0igMo2VqETsEpwfnjtTV7BGNmbflI0wPG0xqvnniQgd1urEKsfWkdkQTMyE55MlvYM8ghJyF0petLI6SG0OYyeA35jbi3ZdfBsoHMhwuvLTVaoVEHv1_RBb-rj8f2UqSXYjNPADenRQuNxHNBBRyMOWRrR9OMrDbauJaHXp5uJ8N7GS_IsqjSmsL-Xmf4NVH5cr8peREsCOLEf4Nyc%3D&attredirects=1&auth=ANoY7coXLijg2tmH2K6mcr07vKIQBE7F2e5HbwoBcf20BUfwuY5rLvWK9VBoT2_0sXCewADMRqXbagEFpFns577FOjZz2PQChBdLqiQIKX45ZbcSm8rJf5qYniAXHb6l4dbrzG5F_yJc1-VasOig6gEleqbcuEbiY3OWUTcvdvZD3tpf5llNCGZFHiqmjjGtRbGjueT-1qvolkR0KAqoEq0hlAd2Vwtb-x0pochgUlop9bTtU_p3VWU%3D
Moose
Sat, Feb 13, 2010 : 9:28 a.m.
If there are cuts in salaries to be made, then let them start at the top. There has been no hint, no discussion, no talk of a cut for Roger Fraser, Sue McCormick, Jayne Miller, Steve Postema, or any of the other top administrators. NONE! And since some folks know the budget so well, spend so much time figuring out how to cut working people's wages, and are able to twist statistics to suit their agenda, let them find those salaries over 100k if they're so smart. Don't worry, they're there and I won't do your homework for you. If you're really serious about figuring out where the money is, they do some real searching in the city budget. I doubt that you will, because that it doesn't fit your agenda. Some folks just figure and lie, then lie and figure some more. Revenue for the city has increased, top wages have increased, jobs have been cut at the bottom, services including fire and police and many others, regardless of what we are told, have been cut, yet those at the top and council lapdogs refuse to even speak of salary, benefit or cuts to perks for Fraser and his ilk. The problem isn't so much wages and benefits is it a wasteful overspending by council and Fraser, who refuses to lead by example. Where was all this "research" into wages when Fraser was hired? And where was it when the city was flush and money flowed like water?
bruno_uno
Sat, Feb 13, 2010 : 8:14 a.m.
save the time, money, effort, and energy of course wasted during these discussions, meetings, and staff time to report on this dilemma. lets all just leave this issue until the union comes to the table, opens up their contracts, and understands that when the money revenue from the tax base goes down, we can not pay them the same amount of money. therefore, we need to have cuts across the whole city. is this really that hard to understand?
AlphaAlpha
Fri, Feb 12, 2010 : 8:43 p.m.
What is your data source to support your contention that 30 city employees are paid over $100 K per year?
Moose
Fri, Feb 12, 2010 : 6:46 p.m.
Ann Arbor's has a structural budget deficit caused by out of control administration (almost 30 employees making in excess of $100,000, the majority of them occurring during the last 10 years), and politicians pet projects that leave no room to save for a rainy day. Toss in the stupidity of all those "buckets" that do not allow any financial leeway, we have the disaster we all see today. To suggest that the budget be balanced on the backs of working people, the majority of them earning far less than the alleged and ludicrous amount of $116,000, without addressing the root causes is outrageous and shameful.
Moose
Fri, Feb 12, 2010 : 6:14 p.m.
Does anyone actually believe this statistical hokum? It's unbelievable that anyone would go through these gyrations and actually think they were accurate or meaningful. Let's see, Hieftje suggested an across the board 3% cut for all employees, Now go get that calculator going and tell us how much that might "save". LOL! If it were that easy, don't you think that Fraser would have already suggested this so called "option"? Lastly, cos my dinner is getting cold, so we eliminate the budget deficit this year at the alleged 5.8% that will solve all our problems... this year. What do we do, next year and the year after that? Another 5% cut? 10%? The "logic" is astounding. Bernie Madoff had better accountants.
AlphaAlpha
Fri, Feb 12, 2010 : 3:29 p.m.
Perhaps the most equitable approach to normalizing city employee compensation is a uniform percentage reduction, across the board. The same percentage amount for everyone. A city compensation reduction of 29.1% would normalize city government wages with national government wages, and save $26,053,146.04 per year. That reduction could be phased in over a few years. There is some time to discuss a reduction that large; thankfully, the entire $5,200,000 deficit could be eliminated by an immediate compensation reduction of only 5.8%.
Moose
Fri, Feb 12, 2010 : 11:29 a.m.
Yeah, let's cut wages for working people. That will really help the US economy in it's drive to the bottom. Maybe the city could outsource some public service jobs to China? I hear their cost of living is pretty low and they work for a couple of dollars a day. I bet workers there would love to have our public service jobs. I have no idea why people of modest means bash other people of modest means while they miss the enormous payouts to corporate CEOS and bankers that were recently paid with taxpayer dollars. Not too mention the close to 30 public employees in the City of Ann Arbor who make in excess of $100,000 plus benefits annually. And those are the people who decide what jobs to cut and privatize the others for lower pay and fewer, if any benefits. Yeah, this is the kind of society I want to live in, where the rich get richer and the poor go bankrupt Why do we think it's bad when working and middle class people are able to earn a living wage that allows them to send their kids to college, own a home, have decent health insurance or leave a job to care for an aging parent with out declaring bankruptcy? Even with wages in the $50,000 region it takes two earners to do those things that help hold our social fabric together. Then realize that most public service employees wages are far far less than $50,000 annually. Wouldn't any of us want these things that a good job with decent wages and health insurance can provide a family?
Ming Bucibei
Fri, Feb 12, 2010 : 10:41 a.m.
No new taxes of any form CUT SPENDING!! CUT SPENDING!! CUT SPENDING!! vote any one who wants to increase taxes or start new taxes, out of office new taxes of taxe increases are treasonous Ming bucibei
Moose
Fri, Feb 12, 2010 : 9:01 a.m.
Everyone knows that you can make statistics say anything you want them to. Figures can lie and liars can figure.
John Q
Fri, Feb 12, 2010 : 7:42 a.m.
"Reducing city employee average pay to the national average government pay would save" If you think that city employees are overpaid, you should tell us which positions are overpaid and by how much.
AlphaAlpha
Thu, Feb 11, 2010 : 11:41 p.m.
Thank you John for the information. World: I stand enlightened. The 2010 Budget Book page 354, line 2, column FY2010 shows $25,432,710 for retirees. So, the net amount to current active employees shown on actual page 105 (= pdf page 117) line 2, column FY2010 would be $59,426,234 - $25,432,710 = $33,993,524 for benefits only. Add that to the page 105 line 1 pay of $55,519,965 and the total is $89,513,489 divided by 766 employees which equals $116,858.34 average total compensation per worker for 2010. $116,858.34 into 2080 hours = $56.18 per hour. Here are the revised reality check comparison numbers: Total annual government worker average compensation in the U.S. is $39.83 / hour, times 2080 hours = $82,846.40/year. The civilian workers earn $27.49 total, times 2080 = 57,179.20 / year. Average Ann Arbor city employee total compensation is $116,858.34, into 2080 hours = $56.18 / hour. Recap: All government workers average: $82,846.40 All civilian workers average: $57,179.20 Ann Arbor workers average: $116,858.34 City employees earn 141% of the national average government employees, and are paid an astounding 204% of the far larger civilian work force average. Reducing city employee average pay to the national average government pay would save (116,858.34 - 82,846.40) = $34011.94, times 766 workers = $26,053,146.04 per year. $26 million per year saved via competitive wages.
John Q
Thu, Feb 11, 2010 : 9:40 p.m.
"I'd like to know more about this $25,000,000 you mentioned." I know you're trying to spin the budget numbers as being a muddled mess that only the most determined person can understand. That may be true for you but it only took me 5 minutes to find those numbers. The expenditure categories by fund that appears earlier in the budget will show which funds have the largest personnel and benefit expenditures. Budget page 354 (not the page number in the PDF) lists the expenditures in the Retirement fund. Page 355 explains the expenditures from the retirement funds to the retirees.
pseudo
Thu, Feb 11, 2010 : 7:51 p.m.
This is a smart town and smart people in it. I say do two things: 1) Make public a chart of the "out-go" in city money for the last 10 years. Compare those increases to inflation over the same time. Make that chart public. Reality is, without spin, bucket for bucket - this city is spending way more than it should and an income tax won't fix that. 2) If you support this tax increase, put your name on it and hope the vote is not timed to be the same time your seat it up for re-election. That is the political reality here. Don't do it unless you have no further aspirations in Public Service. Now for what I think should happen: audit and strip each department down to the legally required basics. Thats it. Cut the crap about patrolling homes to see that the trash containers are hidden. Pull all that baloney out of the ordinances. Stop mowing grass that doesn't need to be mowed. Go through our laws to strip out the unneeded stuff...then, when we all get to return to the creative, lovely town that Ann Arbor once was before all this real estate price-drive baloney was heaped on us. All that fancy zoning that pushed business out sprawling all over, all that big buildings and no neighborly interaction stuff. Get rid of and get back to people being allowed to be people. Then we'll have our art and culture back. Our business will be there too. Enough already.
Beth
Thu, Feb 11, 2010 : 7:45 p.m.
I live in Pittsfield Twp., have an Ypsi mailing address, and my kids attend AAPS. We live where we do because we could get a LOT more house for our money than we could in AA. We consider ourselves a part of the "greater AA area" and do all our shopping, socializing, etc. in AA. I am not working right now but I used to work in AA, and my husband currently does. It's insulting to hear that we should be taxed for being a drain on the city's resources - I guess all the shopping and spending we do in town doesn't count. We should have been happy to buy a tiny ranch house in AA - what were we thinking to try and get a better value elsewhere?
Moose
Thu, Feb 11, 2010 : 6:49 p.m.
"Seeking these answers is an important part of the process of helping the city with their budget." As if A2.com is the place for debate and I doubt anyone of any importance is reading this dead thread anymore.
AlphaAlpha
Thu, Feb 11, 2010 : 6:35 p.m.
"We probably wouldn't need to debate further cutting services or instituting an income tax or both, if had we not spent ourselves into debt, based increasing city finances on more fees and fines, spent on wants and deferred spending on needs or had the sense to see that the gravy train would not last forever." I totally agree. The situation is quite remarkably bad. Some hard choices will likely need to be made, and soon. Should be a very interesting election, as well...
AlphaAlpha
Thu, Feb 11, 2010 : 6:29 p.m.
Well Mr. Moose, Seeking these answers is an important part of the process of helping the city with their budget. Knowing how our money is spent, and how well it is spent, i.e., knowing the cost effectiveness of various items, etc., is crucial to the process of good city management. It's reasonable to wonder how efficiently our taxes are spent, especially if we are to ask the voters to give more. There is a fairly widespread perception that our city workers are over compensated. I want to know whether the perception is correct. So, I ask a simple question: how well are they paid? If they are underpaid, we should reward them better. If they are overpaid, we should lower their pay. And, let's be clear: this is not minutiae, and these statistics are not meaningless. But, I think you knew that. Since this is a horrible time to request higher taxes, we need to be prepared to do the best we can with what we have. Thanks.
Moose
Thu, Feb 11, 2010 : 6:07 p.m.
We probably wouldn't need to debate further cutting services or instituting an income tax or both, if had we not spent ourselves into debt, based increasing city finances on more fees and fines, spent on wants and deferred spending on needs or had the sense to see that the gravy train would not last forever.
Moose
Thu, Feb 11, 2010 : 5:56 p.m.
@Alphax2. And to what purpose does this diversion into speculative minutiae based on meaningless statistics serve?
AlphaAlpha
Thu, Feb 11, 2010 : 5:32 p.m.
I have recalculated average city worker wages based upon the potential modifications suggested by JohnQ, and the revised numbers will be posted soon, assuming his premise is valid. I imagine he'll have the facts for us in a timely fashion. The change is small, but significant. Let's get it right. I appreciate his fact gathering help-very much. More facts, and less rhetoric, will help us all. If anyone else has relevant, factual input, contributions are welcome. Please keep it factual, citing sources and showing the math. I know the Budget Book is confusing-needlessly so, perhaps by design. That's another issue which is likely beyond the scope of this discussion...
AlphaAlpha
Thu, Feb 11, 2010 : 4:13 p.m.
Thanks John... I'd like to know more about this $25,000,000 you mentioned. Where exactly does it appear in the 2010 Budget Book? Page, line, and column would be helpful. And, where does the description of the use of this money appear? Even though $25 million is a smallish fraction of the total, let's be accurate as possible. I appreciate your attempt for accuracy. We need to keep our facts straight as this discussion evolves. Thank you.
wln15
Thu, Feb 11, 2010 : 3:46 p.m.
Ann Arbor would be nothing without UM. Go ahead and tax me. Afterward, I promise to never patronize any Ann Arbor business.
John Q
Thu, Feb 11, 2010 : 2:43 p.m.
The front entrance is in Allen Park. 80% of the site is in Dearborn and Dearborn gets the majority of the tax revenue.
Moose
Thu, Feb 11, 2010 : 11:43 a.m.
City workers pay a portion of their wages, into the health care and retirement funds. Every city worker pays into the retirement fund, out of their own paycheck. Additionally, they also pay all the other Federal contributions to SS and Medicare and all the other related Federal and State taxes. (Except Firefighters who, I believe, opt out of Social Security payments.) Those workers and retirees who live in the city also pay local property taxes. Most current retirees paid into the retirement and health insurance funds for decades. Some live long enough to get a pension, some don't. Some who retired with the minimum 25 years service and the minimum age of 55 for a full pension, don't live long enough to get everything out that they put in. Some who are lucky enough to live long lives get out more than what they put in. Some workers leave before getting vested and get nothing even though they paid into the funds. Some who leave the city before they have the minimum time in or meet the minimum age, must wait until they reach the minimum age to receive benefits of any sort and pay a substantial penalty. Pension and health insurance funds are not gifts to workers over and above their wages. They are part of a wage and benefit package that were all legally bargained for and agreed to by all parties. Those benefits were EARNED by working and PAID from wages. It took many decades and much sacrifice by working people to get those wages and benefits about which some of you complain so vehemently. Those are wages and benefits, that all of us, including the anti tax and anti union crowd should enjoy!! Instead of complaining and disrespecting working people, YOU should be out organizing!!
DagnyJ
Thu, Feb 11, 2010 : 10:29 a.m.
@JohnQ, you searched IT specialists. You should have searched public works. Let's do that: According to simplyhired.com, public works folks in AA average $57,000 in salary, and in NYC the average is also $57,000. So there is a no differential between these two cities for these two jobs. Now look at the cost of living difference. If you make $57,000 in NYC, you need to make $34,215 in AA to have the same standard of living. So maybe we should search jobs in the public sector rather than something like IT specialist. Take Parks dept. AA=$54,000. NYC=$55,000. One other thing: Simplyhired.com might be a lousy source of salary information. It says that city council members in Ann Arbor earn $63,000, and council members in NYC earn $64,000.
John Q
Thu, Feb 11, 2010 : 9:12 a.m.
"The "retirement expenditures" have everything to do with compensation because, in fact, they ARE compensation. The retirement contributions that the City makes are based on the salaries of its current employees and on agreements that the City has made with its unions to provide retirement funds and benefits to current and former employees." You are talking about two different things. A portion of the contributions can be legitimately included as a part of the compensation to current employees assuming that all city employees receive a pension. But the expenditures benefit former employees, not current employees. Just as the Big 3 have retirement obligations, the City of Ann Arbor does as well. But no one working at Ford or GM today counts the benefits paid to retirees as part of their compensation.
YpsiLivin
Thu, Feb 11, 2010 : 8:57 a.m.
John Q said: If you go through each funds explanation of personnel and benefits costs, you'll see $25 million in the retirement account for expenditures related to the retirement system. As I previously noted, those have nothing to do with the pay and benefits for current employees as you falsely claimed. The "retirement expenditures" have everything to do with compensation because, in fact, they ARE compensation. The retirement contributions that the City makes are based on the salaries of its current employees and on agreements that the City has made with its unions to provide retirement funds and benefits to current and former employees. The City's retirement contributions are counted as part of an employee's overall compensation package and are reported as untaxed income on the employee's W-2 form each year. For employees with traditional pensions, health care benefits are not broken out separately from retirement contributions but health care is often included as part of the pension package. For employees with 401(k) or similar plans, health care is not often (if ever) provided as a retirement benefit. The employee may be required (or able) to contribute additional funds of their own to a retirement savings account, but I assure you, retirement benefits (including health care) are considered part of an employee's overall compensation package. Think of retirement benefits as "deferred compensation" for both current employees and former employees who are entitled to them based on agreements they made with the City while they were still actively employed.
carush
Thu, Feb 11, 2010 : 8:44 a.m.
This is a red herring. The City needs to stop acting like it can print money and live within its means. Here's the real problem: 30%+ of the budget goes to retiree and benefits expenses. That is simply unsustainable. If you went door to door telling the citizens of Ann Arbor that 30% of the city budget went to pay retiree expenses, do you think any of the Council would still be in office? What brought down the Big Three? Lavish retiree and worker benefits made them grossly uncompetitive against foreign companies without these costs. Every other industry has had to institute pay cuts and benefit cuts and lay off people: my company cut more than 30% over the last 18 months and even my mother, in her 80's, has had her retiree benefits cut. Everybody, the gravy train is over. Stop building projects, lay off employees, cut everyone's pay and benefits, and fix the darn potholes.
DagnyJ
Thu, Feb 11, 2010 : 8:23 a.m.
@JohnQ: so, that means that if I could get the measly job I have in NYC, I would get paid more? Guess what? That's not true. There is a cost differential on where to live, but the commensurate adjustment in wages doesn't actually exist. Look at the real world. Look at what the average actual salaries are, not what "ought to be" based on where people live and work.
John Q
Thu, Feb 11, 2010 : 8:14 a.m.
"are you saying that if Ann Arbor hires public works guys with PhDs, and Madison WI hires public works guys with associate degrees, that Ann Arbor should pay its guys more for the same work? That kind of scenario would require "controlling for education." I'm saying that if you are going to make comparisons between various workforces, ignoring educational requirements, cost-of-living, etc. allows you to inaccurately portray Ann Arbor workers as over-compensated compared to other workers. Go ahead and compare the compensation of the DPW workers in Ann Arbor to other cities. Or staff planners. Or city attorneys. But it's dishonest to compare the pay for a DPW worker in Ann Arbor to a check-out clerk at Wal-Mart and claim that the Ann Arbor worker is overpaid. It's equally dishonest to compare the pay of a DPW worker in Ann Arbor to the same position in New York City and call the NYC worker overpaid (higher cost-of-living in NYC) or Marquette (much lower cost-of-living) and say that Ann Arbor is overpaid. I would think that most residents of Ann Arbor are educated enough to see the flaws in making those comparison without compensating for those factors but I've apparently overestimated the intelligence of some of the commenters.
jondhall
Thu, Feb 11, 2010 : 8 a.m.
Ypsilanti Rejoice, this is your savior for all the mistakes you made with the "River" project Ann Arbor is driving people out! Take advantage of this do not be tempted to raise your taxes. Tax, Tax, tax what we need is a complete overhaul of City Council. Send them Tea Bags for their Starbucks Coffee.
DagnyJ
Thu, Feb 11, 2010 : 7:37 a.m.
@JohnQ: are you saying that if Ann Arbor hires public works guys with PhDs, and Madison WI hires public works guys with associate degrees, that Ann Arbor should pay its guys more for the same work? That kind of scenario would require "controlling for education."
John Q
Thu, Feb 11, 2010 : 7:24 a.m.
I used the exact same numbers you used from the budget book. But I actually looked at what those numbers include, which you apparently did not. If you go through each funds explanation of personnel and benefits costs, you'll see $25 million in the retirement account for expenditures related to the retirement system. As I previously noted, those have nothing to do with the pay and benefits for current employees as you falsely claimed. I haven't reviewed the other accounts in details but it wouldn't surprise me if that's not the only place you've overstated the expenditures accountable to current employees. You've also made no effort to show that the amounts allocated for pay and benefits in the Ann Arbor budget correspond to the numbers that you've been using from the national numbers. As I asked before, are the national numbers adjusted for education, years of employment or cost-of-living? On average, it costs a lot less per employee in Marquette or Minot than it does for Ann Arbor. To ignore those differences is dishonest.
AlphaAlpha
Thu, Feb 11, 2010 : 6:29 a.m.
Excellent John... Two points: 1. We all can see the passage you cited; this is exactly why I compared government wages to government wages; additional data comparing government wages with private sector wages is a useful reference. If you wish to dwell only on government worker data, OK, city workers are still paid substantially more than their counterparts nationwide - nearly twice as much. For most costs though, we could probably stand to have more comparisons between public and private wages, but that's another discussion. 2. The 2010 Budget Book is confusing at best, perhaps purposefully. Here is the summary data I used (I posted this on another thread; sorry if you missed that): The 2010 Budget Book, page 117 lines 1 and 2, shows: requested pay at $55,519,965 requested benefits at $59,426,234; these total $114,946,199; when that amount is shared by 766 (per page 72) city employees, it provides $150,060.31 for each employee for 2010. What data did you use? Where do you see more accurate data? As I have said on other threads, please cite your sources and show your math. This way, we can keep the discussion a bit more fact based. Thank you.
John Q
Thu, Feb 11, 2010 : 5:51 a.m.
Oh boy, it gets even better. From the government report that you've been pulling your numbers from for comparison. "Comparing private and public sector data Compensation cost levels in state and local government should not be directly compared with levels in private industry. Differences between these sectors stem from factors such as variation in work activities and occupational structures. Manufacturing and sales, for example, make up a large part of private industry work activities but are rare in state and local government. Professional and administrative support occupations (including teachers) account for two-thirds of the state and local government workforce, compared with one-half of private industry."
John Q
Thu, Feb 11, 2010 : 12:12 a.m.
"Is $150,060.31 per year average total compensation reasonably accurate?" I knew that number was bogus and a quick review of the budget numbers you used revealed the truth. $25 million of the "payroll fringes/insurance" are expenditures in the retirement system. Those dollars have nothing to do with the pay and benefits of the current employees. If you're going to start making up numbers, at least have enough sense to know what you're talking about before you make a fool of yourself.
John Q
Wed, Feb 10, 2010 : 11:39 p.m.
Is that your way of saying you don't know the answer? There's a lot of people working minimum and near-minimum wage jobs who get zero health care benefits in the private sector but very few of those in government jobs. If your answer is that the government needs to be more like McDonalds or Wal-Mart, you're not going to have much success getting good workers in those positions.
RTFM
Wed, Feb 10, 2010 : 11:36 p.m.
I suggest the council start the tax with a trial period of taxing city of Ann Arbor employees at 100% of wages after FICA, State and Federal Tax withholding. Just remember what other local city has an income tax - Detroit. RTFM
voiceofreason
Wed, Feb 10, 2010 : 10:49 p.m.
John Q, If we are dealing with averages, it really doesn't matter what level of education. That is a pure attempt at obfuscation on your part. Bottom line, the average compensation for public employees should not be $150,000 a year. That is simply unsustainable.
AlphaAlpha
Wed, Feb 10, 2010 : 10:48 p.m.
Thank you John...I'm glad you asked. The BLS 'bothers' to an extreme degree to account for as many variables as they can. These statistics are theirs, not mine. Ann Arbor workers represent an excellent, diverse cross section of society; it seems likely they would compare well with national averages.
John Q
Wed, Feb 10, 2010 : 10:27 p.m.
Did you bother to control your statistics for years of employment, or education or anything else that might possibly affect those numbers?
MyOpinion
Wed, Feb 10, 2010 : 10:23 p.m.
I find all the comments about how companies will have to pay their commuter workers more to compensate for a city income tax interesting. Do companies currently pay higher wages to workers when they don't provide them health care? Nope. And, I would want to be paid extra to work in some place like Avis Farms. That is such a barren location, devoid of places to walk to, even places to eat.
AlphaAlpha
Wed, Feb 10, 2010 : 10:10 p.m.
According to the BLS, there are major disparities between the city pay scale and the national pay scales, both government and civilian. From the BLS: http://www.bls.gov/news.release/ecec.toc.htm Employer Costs for Employee Compensation September 2009 "State and local government employers spent an average of $39.83 per hour worked for total employee compensation in September 2009, the U.S. Bureau of Labor Statistics reported today. Wages and salaries averaged $26.24 per hour worked and accounted for 65.9 percent of these costs, while benefits averaged $13.60 and accounted for the remaining 34.1 percent. Total employer compensation costs for private industry workers averaged $27.49 per hour worked in September 2009. Total employer compensation costs for civilian workers, which include private industry and state and local government workers, averaged $29.40 per hour worked in September 2009. Employer Costs for Employee Compensation (ECEC), a product of the National Compensation Survey, measures employer costs for wages, salaries, and employee benefits for nonfarm private and state and local government workers." So, total annual government worker compensation in the U.S. is $39.83 / hour, times 2080 hours = $82,846.40/year. Reasonable? The civilian workers earn $27.49 total, times 2080 = 57,179.20 / year. Average Ann Arbor city employee total compensation is $150,060.31, into 2080 hours = $72.14 / hour. Recap: All government workers: $82,846.40 All civilian workers: $57,179.20 Ann Arbor workers: $150,060.31 City employees earn 181% of the national average government employees, and earn an astounding 262% of the far larger civilian work force. Reducing city employee pay to the average government pay would save (150,060.31 - 82,846.40) = $67,213.91 times 766 workers = $51,485,855 per year. Thankfully, our budget situation is not nearly so serious that this reduction would require immediate implementation. The reduction could easily be instituted over several years, providing ample time for all to adjust. And, it would provide an nice alternative to reducing city worker pay to the level of civilian pay.
voiceofreason
Wed, Feb 10, 2010 : 9:10 p.m.
"You never know who is swimming naked until the tide goes out." - Warren Buffett
Charley Sullivan
Wed, Feb 10, 2010 : 8:59 p.m.
Yes, Loka, our mills in Ypsi are higher, but our property values are also significantly lower, so we pay lower taxes out of pocket. In fact, I moved to Ypsi because I could afford to buy here, while what was available in Ann Arbor for the same price 15 years ago was a glorified broom closet, at best. So, I'm one of those U-M employees living outside Ann Arbor, and I'm not particularly in favor of paying a 1/2% income tax to the city, but it's not completely a crazy idea to me either (no tea party crazy am I). But, I'd also point out that I spend a significant portion of my U-M income in Ann Arbor, rather than Ypsilanti or other towns: groceries, clothes, gas, eating out including lunch almost daily, major appliances in my house, my car, and small things like flowers or a Cafe Japon baguette, all bought in Ann Arbor. And again, I'd probably continue to buy in Ann Arbor with a tax, but I do suspect I'd look to spend more in Ypsi, instead of just buying where might be most convenient. But, if I do pay a tax for the privilege of driving into Ann Arbor to be able to work, would you all PLEASE do me the favor of getting your roads properly salted and cleared from the snow?
LiberalNIMBY
Wed, Feb 10, 2010 : 8:38 p.m.
Oooo! Evil government! Does anyone else find reading these comments mind-numbing? It's so extraordinarily easy to complain without the inconvenience of offering realistic solutions. You think government is wasteful? Find out where the waste is and have an intelligent conversation about it. I think Lesko was the first person to offer any cost savings ideas--thank you. (I disagree that stopping these projects will do much for the future of the city, but that's another topic.) The rest of these comments? As snapshot says, if you're not an expert, either get educated or zip the pie hole and save us from reading this Tea Party garbage. We've seen where the country has landed by our "leaders'" tendency to govern by polls. (Look! Annarbor.com's survey says no!) Who is going to jump up and down for being taxed more? Nobody seems to want the city to grow its revenue base any other way (e.g., letting people build buildings), so it's time to outsource services, sell some unused, non-tax-paying parkland, and tax more. And council reps: insist on getting current post-Pfizer-closing data, spell out the real impact on various residents and non-residents, cite studies that have been done in peer cities regarding income tax effects. Are we really doing any discussion a service by inviting discussion in a vacuum? Then get some backbone, take a stand, and shout down people who disagree in a real town-hall debate. Being influenced by noisy bloggers instead of data is shameful.
Sandman
Wed, Feb 10, 2010 : 8:38 p.m.
TAXATION WITHOUT REPRESENTATION!!! Public officials operate under the authority given to them by the tax paying constituants...period!!! It is un-American to expect our city to tax people that do not get represented by the elected officials that benefit from the tax. This city government is way off base and needs a correction...STOP EXPECTING OTHERS TO PAY FOR YOUR DREAMS!!! Be responsible for your wishes on this great city and pony up your own dough$$$ for your needs.
jcj
Wed, Feb 10, 2010 : 8:26 p.m.
amarie "Add a city income tax in Ann Arbor, though, and I will be taking the first good job offer that comes along (and there have been plenty)". Wow it is hard to believe that someone with your smarts and talent would not jump at one of the many offers you have had! You would seem to be the only person in the country that has better job offers in the mail every day. If your job were really that low paying I doubt that your mail box would be filled with all those offers. Get real! Do you really think any body on this site believes you have job offers coming out your ears? If you felt any civic duty you would take one of those jobs and let one of us less fortunate ones take your minimum wage job. I would bet there are more than a few who would be happy to have your job. One of the problems with your age group in particular is that you have not lived long enough ( through no fault of your own)to know what hard times are like. And most your age have had everything handed to them and they think they are entitled to every thing they want at no cost.
The Picker
Wed, Feb 10, 2010 : 8:14 p.m.
Taxing your way to Prosperity is like standing in a bucket and trying to lift ones self up by the handle!
Lokalisierung
Wed, Feb 10, 2010 : 7:35 p.m.
"the WAY higher tax rate (which would still be the highest area property tax rate even with the 6-someodd mills reduction) makes it pretty much unaffordable to live there." Isn't Ypsi property tax like 15 mills higher than Ann Arbor?
Maple
Wed, Feb 10, 2010 : 7:20 p.m.
So we are new in the area, working at UM. Not making a great salary and we are actively looking for properties OUTSIDE the high tax Ann Arbor city area because the higher cost of homes there combined with the WAY higher tax rate (which would still be the highest area property tax rate even with the 6-someodd mills reduction) makes it pretty much unaffordable to live there. As punishment for taking the liberty to locate our family where it is more affordable for us, we would be slapped with a penalty in the form of a city income tax, and certainly no reduction in township property taxes. It's like being kicked in the ass for rejecting life in Ann Arbor city because we can't afford it. That's really low.
AnnArBo
Wed, Feb 10, 2010 : 6:30 p.m.
Government at every level is simply amazing. We are in the worst recession of our life times, job loss's are at an all time high, and what does government want to do..........raise revenues, increase government programs, spend spend spend............
oakapple
Wed, Feb 10, 2010 : 6:15 p.m.
An income tax will affect business decisions. Although I'm retired now, I owned a local business that employed 70 people, mostly high paid computer specialists. My products were sold throughout the United States. It was not necessary for my business to be located inside the Ann Arbor City Limits. Many, maybe most, of my staff lived outside Ann Arbor. For me to hire a Chelsea resident (let's say) to work where there was a city income tax, I would be expected to pay him or her an additional amount to cover that tax. Therefore, if I were going to expand, which I was constantly doing, I would look in the nearby outside Ann Arbor for office space. UM can't do that except for a limited number of departments -- technology transfer might be an example. But growing, dynamic, high tech business can and would. There would thus be less demand for office space inside the city. City office rents would come under some pressure and vacancies would increase, which should cause assessments (and thus taxes) to drop, perhaps only a small amount. Services, like shops and restaurants inside the city would lose patronage. In short, Ann Arbor would become even more dominated by UM. Still, it might be a worthwhile trade-off. It would just gradually change the complexion of the city. Private businesses that don't need to be here wouldn't start here and would eventually move out.
David Cahill
Wed, Feb 10, 2010 : 5:49 p.m.
This not-very-enlightening discussion is one more piece of evidence that the idea of a city income tax ignites a "war of all against all".
Lokalisierung
Wed, Feb 10, 2010 : 5:44 p.m.
@ 1bit - I completely agree with your first post. I'm also interesting in the taxing per UofM student as proposed by Marvin Face.
John Q
Wed, Feb 10, 2010 : 5:41 p.m.
"Why do you think the Lions are in Allen Park and not Detroit - Possibly the income tax? It certainly is not due to lack of buildable space in Detroit." The facility was built on land owned by Ford Motor Land Development Co. and most of the facility is in Dearborn, not Allen Park. The facility had been planned for years, long before the plans for the stadium in Detroit were developed.
Patricia Lesko
Wed, Feb 10, 2010 : 5:41 p.m.
I would suggest folks go through the city's audited financial statements (CAFR) between 2002-2009. Read the Management Summaries. Revenues and expenses are up. Expenses are up 35 percent since 2006. Then, go through the July 2009 Plante Moran study on which Council and Mayor are basing their opinions concerning an income tax. Steve Kunselman was absolutely right to point out that the study's "numbers" are suspect because they are unsubstantiated. Are there 75,000 commuters into Ann Arbor? Plante Moran can account for 20,000 (U of M provided data), but the number for the other 50,000 commuters is not footnoted. There is no indication in the study where the larger of the two numbers came from. Then, there is this from the beginning pages of the Pante Moran study: All assumptions are the responsibility of the City of Ann Arbors management based on their best judgment at the time of the study. It is possible that the forecasted results may not be achieved because events and circumstances frequently do not occur as expected. Finally, the study projects that by 2015, 4,000 new jobs will have been created in Ann Arbor. Richard King, the LDFA Chair, told City Council in April of 2009 that between 2006-2009, 600 jobs were created in Ann Arbor. Our city needs to rein in spending, starting with pulling the plug on the underground parking garage and FITS. Then, we need to rein on overhead by figuring out why expenses have risen by $34 million dollars since 2006.
DagnyJ
Wed, Feb 10, 2010 : 5:09 p.m.
@Snapshot, an income tax will eliminate only the city operating expenses. The rest of the millages (parks, greenbelt, library, AATA, etc) will all stay. And the city can propose more millages for specific things even with an income tax. AA property owners will ultimately pay more in the end. This a bait and switch move by the city. Remember, these are the people with money for art, and parking garages, and city hall monuments. Be skeptical of their claims that this will be some big bonus for taxpayers.
snapshot
Wed, Feb 10, 2010 : 4:53 p.m.
I'm in favor of a city income tax to offset property taxes that are getting out of hand. It seems there is a millage for everything already and more coming for each and every political whim that is discussed. A city income tax will generate over 7 million dollars more revenue than the 6 mills currently billed in property taxes at a rate of 1% for residents and.5% for wage earners. According to the articles I've read in that "unreliable" Annarbor.com which if I remember correctly, the 2004 income tax study commissioned by the city confirmed, though it was based on 2000 data. Now the city charter calls only for a maximum of 1% and the "either or" requirement of a property tax or an income tax, not both. There is much talk, more call for discussions, calls for more research needed, claims of inaccurate and outdated data, business owners grumbling and threatning to take their business elsewhere, comparisons to other failed "taxed" cities that have nothing in common with Ann Arbor, speculation that workers will commit felony fraud to avoid a.5% tax, that is if they don't quit their jobs and go elswhere, city council members who seem to think they are the John Kenneth Galbraith(economist) regarding the negative impact of a city income tax, those that see the tax as a profit center rather than a tax equalization program, and some folks are even bringing sprawl and parking costs into the opposition fold. Where were all you analytical, expert, cautious, concientious, knowledgeable, concerned citizens when your leadership was in economic denial and continued to tax and spend your city into bankruptcy. As I see it, without an income tax the result will be either massive layoffs, massive compensation concessions, ormassive reduction in services, resulting in declining revenue, home foreclosures, loss of business, reduced property values, further reducing tax revenue, resulting in more loss of business, and home foreclosures.....or massive property tax increases imposed upon us through those "creative and new revenue sources" all city employees are searching desperately to find. I'm not seeing the down side to an income tax. What I see is are city and business leaders with inflated egos and a citizenry accustomed to the good life with no budgetary worries. The same phenomenon as a deer caught in the headlights and we all know how that story usually ends.
Woman in Ypsilanti
Wed, Feb 10, 2010 : 4:38 p.m.
There is a part of me that really hopes Ann Arbor adopts a city income tax because it would be GREAT for Ypsilanti. I work in A2 so I would have to pay the tax but I'm betting that the increased business activity in Ypsilanti would be worth it. All it would mean to me is that I would have to adjust my budget and spend that much less money in Ann Arbor during my working day. I can bring my lunch. If other commuters do the same and if that means some restaurants go out of business in Ann Arbor, it would be sad but the additional restaurants likely to crop up in Ypsilanti to meet the new increased demand from employees who gradually move to Ypsilanti would be more than enough to cheer me up about it. And I wouldnt find myself too sad when that increased business in Ypsilanti raises property values here and increases the tax base for our cash strapped city.
Lokalisierung
Wed, Feb 10, 2010 : 4:29 p.m.
"So you're saying that employees of UM are not going to leave because they can't?" No not at all, I'm saying UofM is a great place to work so why would they leave. Where are they going to work in the immedaite area that would be better than UofM? Again if we talking about high up people, such as professors, let's say they make 100K (I bet they make more but your next point is they don't pay well so i'll go with that). 100k *.01 = 1000/26 paychecks equals $38.47. Now obivously you are a proud employee of UofM and that's grat, it's a top notch institution. So are you, and i'm asking you now, are you goign to leave and find another job as prestigues as UofM to save less than $40 a paycheck? "UM has a hard enough time finding and retaining capable people to work because they don't pay well and are chipping away at benefits." Wow...if tht's true it's news to me. i know a lot of people at the U and they get paid quite nicely. Chipping away at benifits is happeneing at every single job in the country. no differnt than mine.
John Galt
Wed, Feb 10, 2010 : 4:09 p.m.
No, it isn't time to devise ever higher taxes and new ways to empyy our pockets. It is way past time to cut the government down to size. The first step is to remove the politicians that think they can continue to drain the blood from the people to find "services" that we can take care of ourselves. And we need to outlaw the formation of public sector "unions" who exist to drain ever more resources from the taxpayers pockets.
Lokalisierung
Wed, Feb 10, 2010 : 4:01 p.m.
"So let's say you own a business. You can be in Ann Arbor arbor and pay income taxes or Scio and not. Where would you go?" Well besides the fact If you own ther property your business is in you might get a reduction in over taxes, I guess you'd probably want to be where more money is...in Ann Arbor. I see what you're saying, but it's not that simple. ANd we all get the Lions point...how about bringing somthing else up?
Lokalisierung
Wed, Feb 10, 2010 : 3:42 p.m.
"What services are they getting for this privilege?" Water, Sewer, Fire, Police...things like that....how about roads? They're horrible i know, but that's michigan for ya. What do I get for 60% of my prop taxes goign to Schools?
Bob Needham
Wed, Feb 10, 2010 : 3:36 p.m.
(A comment was removed because it was in all caps, along with a brief response to it.)
AlphaAlpha
Wed, Feb 10, 2010 : 3:31 p.m.
I see folks requesting clear budget data. I concur. I have been through the 2010 Budget book. It lacks key summaries, such as: How much, on average, do we pay our city employees? Here is what I found (if you can do better, please do so, and add some facts to this discussion; and please cite sources and show your work): The 2010 Budget Book, page 117 lines 1 and 2, shows: requested pay at $55,519,965 requested benefits at $59,426,234; these total $114,946,199; when that amount is shared by 766 (per page 72) city employees, it provides $150,060.31 for each employee for 2010. Is $150,060.31 per year average total compensation reasonably accurate? If so, is it a reasonable amount? Or is it too far from national, state, and city averages?
A2Resi
Wed, Feb 10, 2010 : 3:28 p.m.
TO: VOICEOFREASON Sounds like you listen to rumor rather than fact when it comes to Unions. How dare you infer that Unions portray council as "The Evil City Council." I have attended and watched Council meetings where representatives from various unions brought not only their concerns but sometimes novel ideas for budget reduction. There has never been disrespect shown by these employees. You sound like an inciter instead of a "voice of reason." How do you think the City was able to eliminate so many positions over the past years?....Through attrition and a reorganization process that Unions agreed to. Staff now are flexible and trained to perform tasks that previosly were only for certain classifications. How do I know this? I've attended and followed council meetings for years. I've watched services diminish and wages decrease when compared to the cost of living. If layoffs must occur I'm certain the remaining staff, both non-union and union will once again draw in a deep breath, prioritize their tasks then go about providing the best they can for the citizens of Ann Arbor. Services will be diminished even further....that's a fact. Options for reductions must be looked at. I'd be willing to bet these Unions (and non-union staff) are talking with the City to help where they can.
mrk
Wed, Feb 10, 2010 : 3:27 p.m.
I'm a renter. I'd like to think that increasing income taxes and decreasing property taxes would even out (i.e. I'd pay more since I work in Ann Arbor, but less since I rent in Ann Arbor)... but I have little to no faith that the landlords would actually lower their rents to reflect their savings on property taxes. Especially the big companies and those who rent primarily to students.
jcj
Wed, Feb 10, 2010 : 3:24 p.m.
EyeHeartA2 I believe people have been concerned that property taxes will fall 15%. Does that apply to property owned buy a business? If a business is going to pay less property tax but pay about the same in corporate tax why would they need to leave? I would argue that businesses have been leaving Detroit for a number of reasons. But I do not think an income tax is the main reason. I believe they have had income tax since about 1964. And I suspect the main exodus started sometime after the riots of 68.
Lokalisierung
Wed, Feb 10, 2010 : 3:24 p.m.
Ypsilivin we'll just have to agree to disagree on that point...they are somewhat linked to money in and money out, but not really....i don't need to manage a property to know how to balance a budget and make a profit.
Paula Gardner
Wed, Feb 10, 2010 : 3:07 p.m.
A few thoughts on how this might affect businesses in the city: http://tinyurl.com/ydjuv4n
YpsiLivin
Wed, Feb 10, 2010 : 3:06 p.m.
Lokalisierung, I know you desperately want to believe that rent is a made up number based on nothing. It's not. It's based on the landlord's mortgage on the property (yes, landlords have mortgages, too); the property taxes - which are levied at the much higher, non-owner occupied rate; the insurance the landlord must carry on the property - which is also higher, since the property is non-owner occupied; anticipated maintenance costs, inspections and improvements that are required by the municipality; damage repair, and the administrative costs associated with managing the property. On the other side of the equation are the competitive factors that work to lower rent - namely the rents being charged for other similar properties in the area. A property's rent needs to be high enough to cover the landlord's cost while being competitive with other local rental properties. Rent is not a made-up number based on where the landlord wants to spend his vacation. Property rental is a business and money in must equal money out. Try managing rental property for awhile and learn what goes into determining the rents that tenants pay.
braggslaw
Wed, Feb 10, 2010 : 3:01 p.m.
Thanks for citing all the city employees in favor of a city income tax. Duh! they get the benefit. If you want to see a mass migration of businesses out of Ann Arbor implement a city income tax.
SBean
Wed, Feb 10, 2010 : 2:57 p.m.
Aside from its commuters, the university covers most of its costs either internally or through fees paid to the city for services received. Exploring ways to internalize commuting into the local system by taxing its 'bads' is at least as worthy of exploration as the other options currently under consideration. Can the city or county institute a fuel (gasoline/diesel) tax? Doing so at city level might run into unintended consequences, but at the county level the 'proximity problem' where a business might just move across the city border to avoid an income--or fuel-- tax would be lessened. One of the 'goods' that cities provide is the proximity of businesses to residents, which allows residents to avoid the 'bads' of commuting--risk of injury, sedentary time, pollution, noise, sending money out of the local economy, etc. This is true for other cities and villages in the county, not just Ann Arbor. The majority of county residents live in those communities and could benefit from the impacts of a countywide fuel tax. (Those of you who don't like the greenbelt program might consider how a fuel tax might help protect open spaces and farmland without having to purchase development rights.)
Lokalisierung
Wed, Feb 10, 2010 : 2:38 p.m.
"and now they want a local income tax? Hmmm..." Actually this has been an idea for quite some time.
Lokalisierung
Wed, Feb 10, 2010 : 2:35 p.m.
I totally agree they do Atticus (although I wouldn't call renters the "poorest" of A2).
janeqdoe
Wed, Feb 10, 2010 : 2:30 p.m.
A few days ago, city council had concerns about the city not being culturally vibrant enough, and now they want a local income tax? Hmmm...
Atticus F.
Wed, Feb 10, 2010 : 2:25 p.m.
Loka, I'm just saying that renters do contribute to the tax base, and that double taxing A2's poorest to fund parks and art projects is not sustainable and not fair.
jcj
Wed, Feb 10, 2010 : 2:17 p.m.
Although landlords probably would pocket their "windfall". With the amount of for rent signs that stay up and the number of properties not being rented, property owners might be forced to lower the rent. It always amazes me to see properties sit empty rather than lower the rent. 100% of something is better than 100% of nothing.
Lokalisierung
Wed, Feb 10, 2010 : 2:10 p.m.
"I'm glad the majority of Ann Arbor residents have the foresight to oppose an income tax." ha, yes this poll indeed proves how residents feel. All of Ann Arbor (all 427 of them) have now spoken.
Lokalisierung
Wed, Feb 10, 2010 : 2:07 p.m.
Atticus i know you think that's unfair but i don't. The amoiunt you pay your landlord is a made up number not really realted to anything other than how much he/she can charge you can have you pay it. If he could double the rent right now and sign a lease for 10 year with somone he would. There's no line item spreadsheet he has that says X of Atticus' rent goes toward insurence, X for property taxes...etc It's completely made up. UofM does pay for water service, and she I guess they pay for "their" roads and sidewalks to be maintaned but obviously UofM doesn't really have a campus so they travel everywhere. They sure don't pay for any concrete on the corner of hoover and State do they?
voiceofreason
Wed, Feb 10, 2010 : 2:02 p.m.
I'm glad the majority of Ann Arbor residents have the foresight to oppose an income tax. In this economic environment, cost of doing business is paramount in the determination of where to relocate. An income tax will drive business out of the city, as well as preventing new business from locating within. An income tax would also reinforce the unsustainable spending model currently in place. However painful it may be, the city needs to cut as deep as necessary right away. Issue and follow through with ultimatums to public unions that extreme concessions(much more than what has already been asked for)WILL happen or massive layoffs WILL take place. Make it clear to unions that taxpayers are demanding this. When the unions refer to you as "The Evil City Council", wear this as a badge of pride. It means you have successfully represented the people's interests. Suspend the entire "Percent for Art" program, because those in charge of it are charlatans. Start becoming tough! No more of the, "We can find money for that" mentality. Stop giving into the demands of a few "screaming voices" in the crowd who attempt to selfishly subvert the wishes of the people. There will initially be kicking and screaming by affected parties, but in turn you will gain the widespread respect of the general public. Ann Arbor City Council: You were elected to lead, not to become active participants in the "touchy-feely pity party" that is everyday Ann Arbor. This is your blueprint to regain public favor/trust. Show some cojones and actually implement it.
Lisa Starrfield
Wed, Feb 10, 2010 : 1:58 p.m.
V Vancouver is in Canada. You are comparing apples to grapes.. assuming your data is correct.
Lokalisierung
Wed, Feb 10, 2010 : 1:57 p.m.
"spending practices of the city is by attending counsel meetings" except the fact that council only lets a set number of people talk to them at meetings. It';s not like everyone can come and talk during public comments. If there was a public hearing on this that might be different.
Atticus F.
Wed, Feb 10, 2010 : 1:55 p.m.
loka, I already pay my share of taxes in the form of rent that goes towards property taxes. I simply think its unfair that my I still pay the same amount for rent, even though my land lord is putting more into his pocket, and then being forced to pay additional taxes on top of the taxes I'm already paying.
Lokalisierung
Wed, Feb 10, 2010 : 1:54 p.m.
"Maybe U of M would actually go for something like this rather than risk losing many of their employees because of a city tax..." I made a common misconception a second ago (as of course the property tax of a landlord is rolled into your rent) and i believe you're making one here. I seriously, in no way, think people are going to start pouring out of working for the U becasue on an income tax. Where are they going to go? UofM is like the only Business that ins't seeing people getting canned left and right...you really think the employees are goign to leave? That's a joke.
EngineeringMom
Wed, Feb 10, 2010 : 1:53 p.m.
I see a lot of comments about U of M not paying their fair share - I find this hard to believe. Ryan, can you dig up some facts for us? For example 1 - Although UM doesn't pay taxes, they do still pay water/sewer bills... right? 2 - Although UM doesn't pay taxes, they do provide their own police... right? 3 - I've heard that they also pay for fire runs to their properties... is this true? 4 - Do they maintain the roads and sidewalks on campus? I guess, I'm not at all certain why someone should be taxed for working in Ann Arbor. Disclaimer -- I'm a homeowner in Ann Arbor, so I pay property taxes. I don't work in Ann Arbor, so I wouldn't pay an income tax. However, this tax just doesn't seem reasonable. Our government needs to be a better job managing their spending.
Aware
Wed, Feb 10, 2010 : 1:50 p.m.
For those of you that have great comments (good and bad) the way to get your thoughts across about the spending practices of the city is by attending counsel meetings. You can bet the city government doesn't pay attention to these forums. I've heard great advice here in these posts by some seemingly educated people. Its hard to tell how many of you are actual residents of the city. If you are I encourage you to attend the meetings, then you know your voice will be heard. By the way I grew up here and live here and work here. We definately need to be vocal about how things are done here. Why are parks more of a priority than just about anything else here??? Because those people that lobby just for the parks show up at the counsel meetings. We need to attend these meetings or things may not change. After all (we the people) Unfortunately, the vocal minority has gotten their way for years in this city, hopefully times are changing....
Zak Branigan
Wed, Feb 10, 2010 : 1:47 p.m.
@Ryan J. Stanton: What size majority? 51%? 89%? With 38,000 employees in a community as small as ours it is relevant to the discussion. Thanks in advance.
Lokalisierung
Wed, Feb 10, 2010 : 1:45 p.m.
"LOka. if you've already purchased a property in A2, you've already agreed to A2 taxes. Buying a home in A2 and then complaining about the property taxes, is like buying a home next to the airport and complaining about the noise." Totally agree...just like signing a lease to rent an apt. and then thinking you should recieve $50 off each month.
Lokalisierung
Wed, Feb 10, 2010 : 1:42 p.m.
Atticus I freely admit to being horrible at math but how does 1% of 40K = 800?
Atticus F.
Wed, Feb 10, 2010 : 1:42 p.m.
And even if my math was wrong, $500/year would still have a serious effect on my quality of life, as well as the A2 buisnesses I frequent, and the charities I donate to. Also, the cost of property taxes are part of the equation when figuring the cost of rent. This will be a giant windfall for A2's wethiest land lords, while putting the cost on the shoulders of A2's working class.
YpsiLivin
Wed, Feb 10, 2010 : 1:41 p.m.
Lokalisierung says: Renters have been getting a break the entire time not paying prop taxes Common misconception that renters don't pay property taxes. Instead they pay the landlord's property taxes in the form of higher rents. No landlord I know of excludes the cost of property taxes when determining how much to charge for rent. If anything, since landlords can't claim a homestead exemption for rental properties, renters pay more rent to cover the landlord's higher, commercial-rate property taxes.
jcj
Wed, Feb 10, 2010 : 1:40 p.m.
Lisa I have to agree with you! You don't get it!!Are you in fact a property owner in Ann Arbor? I am! And I will tell you this while I am not happy with what I pay in property taxes, I consider myself lucky compared to someone just buying a home. I would expect that anyone that draws their salary from the public coffers would be in favor of just adding taxes instead of restructuring them.
Ryan J. Stanton
Wed, Feb 10, 2010 : 1:38 p.m.
@Zak Branigan My source of information comes directly from the university's communications office. They were willing to help me analyze the numbers through their employee database and, based on listed addresses, we were able to identify that a majority of U-M's 38,000-plus employees live outside of the city limits of Ann Arbor. @Grumpy I don't know of any budget for dummies, but a significant amount of the city's budget information you're looking for can be found on this page on the city's Web site. I agree it's pretty laborious to go through a lot of that stuff. We will continue to do our best to write stories over the coming weeks that simplify some of these issues for readers. Thanks for the suggestions on what you'd like to see covered.
Atticus F.
Wed, Feb 10, 2010 : 1:37 p.m.
scratch that last comment, I think my math was off.
YpsiLivin
Wed, Feb 10, 2010 : 1:34 p.m.
Lisa Starrfield, The charter of the City of Ann Arbor requires that the city operating millage be cancelled if an income tax is put into place, so it's not currently possible for the City to have its cake and eat it, too.
Atticus F.
Wed, Feb 10, 2010 : 1:34 p.m.
LOka. if you've already purchased a property in A2, you've already agreed to A2 taxes. Buying a home in A2 and then complaining about the property taxes, is like buying a home next to the airport and complaining about the noise. And BTW, in your earlier post you mentioned that it would only be $15 per check deduction, but your math was wrong... 40k/ year does not equate to $30 per month. the tru math; is 40K a year, 1% = $800/26 paychecks = $30.76....not $400 per check x 26 checks. $400 every other week would equate to 20k/ year
Lokalisierung
Wed, Feb 10, 2010 : 1:32 p.m.
"Can you guarentee that as a renter, my rent will be reduced by $50/month?" @ Atticus F. - No, I cannot promise you that, nor do I think it should even enter in the conversation. The market is the market. If you want a place that's $50 cheaper, go look for one. I have no idea why people think the renters should get a break becuase the landlord will. Renters have been getting a break the entire time not paying prop taxes
BethinYpsi
Wed, Feb 10, 2010 : 1:29 p.m.
There's a reason many U-M employees live outside Ann Arbor - we cannot afford to buy a home here or we can get "more bang for out buck" in a different community. The latter is true in my case. When I bought my home eight years ago I was able to get several hundred more square feet for many thousands of dollars less than the places I looked at in Ann Arbor.
bunnyabbot
Wed, Feb 10, 2010 : 1:24 p.m.
NO NEW TAXES
Grumpy
Wed, Feb 10, 2010 : 1:16 p.m.
Ryan Stanton (or any other posters). Is there a 2010 budget for dummies available perhaps in a previous article? (I guess "user friendly" would be the school board's phrase) I opened the one on the city website. Honestly, there is no way I'm taking the time to read and understand 431 pages. I'll trust what the reporters on aa.com tell me. I see many willing to volunteer their time and energy to propose spending cuts, but they provide no specifics as to what to cut or which pot of money can legally be further reduced. Why not take advantage of their offer by putting them to work for free? I see complaints about not having access to the numbers. How is that possible? If the politicians and city accountants work for the taxpayer, doesn't that make us the CEO? Just looking for a simple table, pie chart, or flow diagram a la David Jesse's school coverage showing basic numbers. What's the total kitty? (350M?) General fund (80M)? Big buckets that can't be legally touched? Other buckets that can be touched? When the millages expire so we can stop funding them? Total number of millions of dollars that we are legally able to take a scalpel to? There was an earlier article about the city releasing these numbers in CSV format for public consumption within the next 30 days. What's the latest on that? If/when that happens, we're going to see some specific suggestions from passionate voters to cut spending.
Lokalisierung
Wed, Feb 10, 2010 : 1:15 p.m.
"That makes no sense. Why not simply ADD a 0.5% income tax to the current property tax?" I don't think you can. I think it's a legal issue that if an income tax passes you must take the mills off of proerty tax yada yada. And here's a thought...why should I pay more property tax instead of someone else paying an income tax? This city WILL go bankrupt in the future there is no possible way around it. UofM is going to keepo buying everything up and paying no taxes for anything while every renter thinks it's the craziest thing ever to cough up a little dough. I've also heard Marvin's idea about Stduent tax and have always been interested...but have never heard if it's possible.
MyOpinion
Wed, Feb 10, 2010 : 1:11 p.m.
Using data from the American Community Survey, I find that of the people who work in Ann Arbor and who work in higher education, 82 percent live in Washtenaw county (55% in Ann Arbor). Disregarding employer (has an occupation, but not necessarily in higher education), 68 percent of people who work in Ann Arbor are from Washtenaw county; 37 percent of people who work in Ann Arbor, live in Ann Arbor as well.
Lisa Starrfield
Wed, Feb 10, 2010 : 1:04 p.m.
I don't get it. The city is in a budget crisis and wants to have a 1% income tax while cutting property taxes (that won't be able to be raised again) by 15%. That makes no sense. Why not simply ADD a 0.5% income tax to the current property tax?
Marvin Face
Wed, Feb 10, 2010 : 1:02 p.m.
If the UM will not contribute in a meaningful way (gee, thanks for the lousy fire truck), and very few like the idea of an income tax, here is a solution that, while different, would help a great deal and would not require changing state law like taxing UM would: Tax student's university tuition. Some rough, back of napkin, calculations based on 2009 in and out of state enrollment numbers and average tuition paid by undergrads and grad students show that taxing UM students tuition at 1/2% will yield approximately $4.6 million in additional revenue annually. Taxing them at 1% will yield approximately $9.2 million annually. This would raise the average in-state undergrad tuition $58 per year.
Top Cat
Wed, Feb 10, 2010 : 12:50 p.m.
For anyone that believes that the implementation of an income tax would result in any real property tax reduction, please contact me. I have a bridge in Brooklyn that is for sale.
Expatriate
Wed, Feb 10, 2010 : 12:31 p.m.
Look, for a young professional like me there is very little keeping me in Ann Arbor. An income tax would hit me at work and wouldn't help me at home, where I rent an apartment and wouldn't see any reduced rent due to a reduction in property taxes. For people without families or other ties to the community, it would be another reason to look elsewhere. Is that what we really need at this point? To give people LESS of an incentive to stay in Ann Arbor. If an income tax was passed, I would start looking for other jobs in another part of the country... it's just not worth it.
Lokalisierung
Wed, Feb 10, 2010 : 12:28 p.m.
"The leading option discussed in city circles has been to tax residents at a rate of 1 percent of their income and non-residents at a half-percent." I'll say this again. You make 40K a year, 1% = $400/26 paychecks = $15.38 a paycheck. If everyone is going to flee the city of $15.00 a paycheck than by all means, you know where the door is. Let's take it one step further As YpsiLivin is saying and people are going to move to Ypsi in order not to pay this. IF they work in the city, they will still pay 1/2%. So you're going to move to avoid paying $7.19 a month? Seriously?
Jody Durkacs
Wed, Feb 10, 2010 : 12:27 p.m.
"We cannot cut our way to prosperity" Nor can we tax our way to prosperity.
pragmatic
Wed, Feb 10, 2010 : 12:06 p.m.
It is indeed tough economic times but the City needs to look at cutting spending before raising taxes. Reduce staff (preferably through attrition) and require the employees to pay more for the costs of health insurance which is a huge burden on the taxpayers. I work for the City and I do not see the level of accountability in this organization that I have seen in the private sector. Rarely do I agree with Republicans on any issue, but I believe that Republican calls for graeter privatization of government services is a great idea.
pragmatic
Wed, Feb 10, 2010 : 12:05 p.m.
It is indeed tough economic times but the City needs to look at cutting spending before raising taxes. Reduce staff (preferably through attrition) and require the employees to pay more for the costs of health insurance which is a huge burden on the taxpayers. I work for the City and I do not see the level of accountability in this organization that I have seen in the private sector. Rarely do I agree with Republicans on any issue, but I believe that Republican calls for graeter privatization of government services is a great idea.
Justavoice
Wed, Feb 10, 2010 : 12:03 p.m.
Simply stated. "Taxation without representation"!
spaceman
Wed, Feb 10, 2010 : 11:45 a.m.
On its surface there is an appeal to taxing "commuters" who work here and then drive back to Brighton, Belleville, or wherever. The underlying premise is that these people currently receive benefits they are not paying for. Yes, they can sniff the rarified air of Ann Arbor, but really what else? In short order, if you tax them, they will leave. The one group who will not be able to leave are the University employees. This is simply the latest, and most foolish, attempt by the city to grab money from the Big U.
YpsiLivin
Wed, Feb 10, 2010 : 11:28 a.m.
jcj, The notion that people will leave to avoid an income tax is real... very real. I left an excellent management position in Detroit because the city income tax was irritating. Why should I pay income taxes to a city that wouldn't need an income tax if it could more competently manage the ample funds it receives? Ann Arbor is no different. Who would leave Ann Arbor? Your neighbors. For renters, this would be exceptionally easy to accomplish. At the end of their current lease, they'll move to Pittsfield Township, Saline or Ypsilanti Township. The savings for them would be two-fold: lower rents AND cutting their income tax by at least half or eliminating it altogether, depending upon where they work. Your next question should be: Who will take their place? No one. Why would someone who rents live in Ann Arbor and voluntarily pay higher rent and a city income tax? Sorry, but Ann Arbor's not that charming. The net effect will be that landlords will have to charge higher rents for the tenants who do stay, the vacancy rates in A2 will rise, homes will be harder to sell, businesses that don't want to deal with the income tax issue (and yes, it is a headache for them) will relocate to the surrounding townships, and commercial vacancies will rise. Ann Arbor will find itself in a nasty spin cycle as fewer new businesses locate in Ann Arbor and established businesses leave. But go ahead and vote for the income tax if you insist on seeing it for yourself. (And if an income tax is instituted, good luck in getting rid of it when it proves to be a poor decision.)
Atticus F.
Wed, Feb 10, 2010 : 11:13 a.m.
I work in A2, and rent in A2. I certainly do not live an extravagant life style. And the thought of paying the city of Ann Arbor $600/year for the privalige of working here makes my blood boil. Can you guarentee that as a renter, my rent will be reduced by $50/month? Not everyone here has an unlimited budget... And that would certainly cut into my budget, as I can barely afford to go out to dinner, or donate to charity as is. This is the case with most renters who live in A2. And by the way, The student population contributes greatly to the tax base, because they rent property at sky high rates, and the land lords pay proerty taxes.
walker101
Wed, Feb 10, 2010 : 11:11 a.m.
Just like the corrupt City of Detroit, just another way to get revenue for useless projects and fill the coffers of the City.
P4
Wed, Feb 10, 2010 : 11:07 a.m.
As I said before, the city officials have their priorities skewed. They are so focused on the environment and the greenbelt that they forget people need jobs and would like not to pay for a employment. Stop spending money on frivolous stuff you can't take care of such as land. I think you need to lose your jobs and then we will tax you so you know what it feels like to wonder how you can afford to live in your own home. And your house will burn down because the previous administration chose to lay off firefighters/police officers rather than cut frivolous expenditures. Now that I think about it, former politicos could pitch a tent on the green belt someplace. I care about the environment but I think there are more important issues to discuss and earmark funds to other than bike paths, the greenbelt, and moving lizards.
Ryan J. Stanton
Wed, Feb 10, 2010 : 11:04 a.m.
Here's some information on Headlee from the Michigan Municipal League.
Gloriagirl
Wed, Feb 10, 2010 : 10:57 a.m.
Before a city tax, why not have the city place a surcharge on ticket prices of sporting and entertainment events with a city venue. Using local infrastructure such as roads, water (to flush those toilets at half time and police during those game days, a surcharge could supplement local budgets and create a revenue stream that would certainly be a first step before penalizing local citizens. How about a use tax on restaurants or hotels, like many large cities impose? Although UM is not on local property tax roles, there should be some inquiry in creating revenue directly, even if our politicians have to go to Lansing to change current legislation. With great minds from the business school or the nationally recognized economists at the U, city council should tap into that expertise and run an inquiry before discussion of business as usual-
MG
Wed, Feb 10, 2010 : 10:51 a.m.
To all of you folks who think U-M should be taxed, do not shoot the goose laid the golden egg. Without U-M, Ann Arbor would not exist. From http://www.city-data.com/us-cities/The-Midwest/Ann-Arbor-Economy.html, "The University of Michigan is Ann Arbor's largest employer". Ann Arbor gains because their base of property tax increases as many of the U-M employees do live in Ann Arbor. That in turn typically raises house prices which in turn raises more tax revenue for the city. If employees don't live in Ann Arbor, they certainly contribute to spending money in Ann Arbor.
Ryan J. Stanton
Wed, Feb 10, 2010 : 10:50 a.m.
Grand Rapids is considering an income tax hike right now to avoid deeper cuts to city services. The Grand Rapids City Commission is expected to vote next week to put the tax hike before local voters in the spring. City Manager Greg Sundstrom said without the 15.4 percent tax hike (which could bring in $7 million) 80 more city employees likely would be laid off. The money would be used to bring back community police officers that were cut and establish a reinforced downtown fire station.
Atticus F.
Wed, Feb 10, 2010 : 10:47 a.m.
No way, no how...I will personally organize a group of voters to vote against all city council members in all wards who support this. On a side note, I'm happy to see my district rep Steve Kunselman is on the same page as me. I will continue to support you as long as you run, and will urge friends and family in the 3rd ward to do the same.
MG
Wed, Feb 10, 2010 : 10:38 a.m.
Anyone who thinks an income tax will lower their own property tax better think through this carefully. Initially it will, however taxes will creep back to their normal level again over time. Who remembers the 4% sales tax increasing to 6% and the promise about lower property taxes and equal revenue for the school districts? It didn't take long to create "hold harmless" millages to recover funds that richer school districts needed. Today, we basically have a 2% higher sales tax and no property tax relief to speak of. Voters are more apt to approve millages after property tax declines and the City knows this. The result is that many who live and work in Ann Arbor will pay more in the end. Also, an income tax will only aggravate business owners in Ann Arbor and hinder prosperity for the city. We are not a big city, so we don't need this kind of big city thinking.
Hunterjim
Wed, Feb 10, 2010 : 10:33 a.m.
With the Uof M inside the city limits of Ann Arbor we have a unique situation. All the Uof M property including houses and properties donated/willed to the Uof M are not on the tax rolls. Think of it this way... If your neighbor has donated their house to the Uof M when they died, it now is off the tax rolls. Your paying property taxes, while the house next to you is not! Fair? The people living in it ( and working for the Uof M )do not pay for any city services via taxes but use them all, schools, garbage pick up, fire/police protection, road maintance etc...I think an Income tax is a fair way for all who enjoy the benifits if this City, pay for them.And yes, you the home owner would get a reduction in your property taxes as well. Maybe AA.com could comment on how much land is actually off the tax rolls due to being owned by the Uof M.
Zak Branigan
Wed, Feb 10, 2010 : 10:13 a.m.
When I did some research on this topic last July, I found that though the University of Michigan doesn't pay taxes, it has 38,000 employees - the majority of whom commute to Ann Arbor - who would be subject to an income tax. The income tax has been described, even by city officials, as a roundabout way of taxing U-M. Ryan..can you please provide a citation for that statement? I would like to see a source indicating the percentage of UM employees commute. You state that the majority of UM employees commute...which may be true, but I would like to see the source, please.
Chris Taylor
Wed, Feb 10, 2010 : 10:13 a.m.
Please tax the University of Michigan instead of the working people of Ann Arbor. Or just get it over with already and sell the entire city to the University, then we can fire the city counsel and no one will have to pay taxes! -Chris Box
Ryan J. Stanton
Wed, Feb 10, 2010 : 10:06 a.m.
To add another viewpoint to this already robust discussion, I'll relay what a person who commutes to Ann Arbor for work wrote me today to say: "If you are discussing an income tax for non-residence people working in Ann Arbor you also need to discuss how us non-resident workers can have a vote on the tax issue as well! Maybe us non-resident workers need to discuss recreating our own form of Boston Tea Party right here in Ann Arbor? Every city is having budget issues, I am not asking you to help balance the budget of the city I live in, so as a non-resident of Ann Arbor I do not feel it is my responsability to to be taxed to balance your budget. I do the majority of my business and shopping in the Ann Arbor area during lunch and on weekends. If I am forced to pay the city of Ann Arbor a income tax just because I work here, I will not spend another dime in the stores in this city as long as I live!"
Ryan J. Stanton
Wed, Feb 10, 2010 : 9:47 a.m.
When I did some research on this topic last July, I found that though the University of Michigan doesn't pay taxes, it has 38,000 employees - the majority of whom commute to Ann Arbor - who would be subject to an income tax. The income tax has been described, even by city officials, as a roundabout way of taxing U-M.
Moose
Wed, Feb 10, 2010 : 9:45 a.m.
I think Roger Fraser is setting up a scenario to leave his job as city administrator. With the help of council and mayor, Fraser has dug an economic hole that will take many difficult years for the city to climb out so he pitches an unpopular, unproven income tax and invites inexperienced elected officials to sell the ride to Never Never Land to the voters. Knowing that, if put to a vote, the tax will fail, and even if the income tax is rejected out of hand, Fraser imagines that when he eventually has to make those politically unpopular decisions of where and how much to cut from the budget, the resulting public outcry will be enough to get Mayor and council to send him packing with his golden parachute buy out package.
Technojunkie
Wed, Feb 10, 2010 : 9:42 a.m.
Maybe we can restrict the tax to government workers? But seriously, small business owners usually pay their business taxes on their personal tax returns and thus an income tax hike will hit the small businesses that create most new jobs. We really don't need to give them another reason to give up. 1% may not sound like much but a percentage point of what's left after paying federal income, SS and Medicare, state income, and basic expenses can easily be a double-digit percentage of net income, and in this economy probably will be if there's net income at all.
xmo
Wed, Feb 10, 2010 : 9:39 a.m.
Maybe it's time for vote these people out of office! Do we really need all of the things in the budget? Hell No! lets cut back to the basics just like at home.
marzan
Wed, Feb 10, 2010 : 9:34 a.m.
I get the impression that underlying the discussion revolves around indirectly taxing U of M by taxing the employees. What do the possible numbers look like?
AAresident
Wed, Feb 10, 2010 : 9:34 a.m.
One of the problems of the proposed tax is that it is expensive to implement. The overhead for managing the tax is I think around 3 million each year. Combine that with the reduction in business tax revenue of 7 million, add millions more for lack of compliance, also add something for the cost to business and individuals for accounting and other compliance, and you get a tax that has a lot of overhead for a relatively small amount of money collected. It would probably work out on average that AA taxpayers would pay about the same amount. The savings on real estate tax for most people would be about the same as the cost of the income tax. The work required to administer the tax would increase the size of the city bureaucracy. If voters understand how expensive it will be to implement the tax and how uncertain the benefits are, they might find it's not such a great solution. If would be better if the city stopped borrowing money for large development projects.
jcj
Wed, Feb 10, 2010 : 9:32 a.m.
Is there a job waiting in Chelsea? I have not checked the classifieds this morning but the last time I looked there was not a help wanted sign in many windows there. An income tax may not be the answer, but it would only seem fair that if you live outside the city but work in the city you might need to help pay for some of the services. The carpetbaggers will certainly complain when the streets are not plowed. (They have had lots to complain about on that front )The retired homeowners in this city need some kind of property tax relief. As for new development in Ann Arbor the politicians and city hall pretty much killed that by making it so hard to get any planned project approved.
TAG
Wed, Feb 10, 2010 : 9:29 a.m.
I support the use of an income tax to replace some of our property taxes. An income tax is a more equitable tax at least for those who live in the city - I live in the city. Based on my current income, my taxes might go up a bit with the income tax but, if I were to loose my job or retire, my income will drop significantly and I would then pay less taxes than my current property taxes. For those referencing cities with income taxes implying that it is a reason for there decline - show me the evidence that it was the taxes that caused the decline. For those who imply that people who are not a resident of the city but work inside will leave - by far the biggest employer in the city and probably the biggest employer of non-residents is the University - the University is not going to leave the city and the people who work for the University are not going to quit their jobs.
SonnyDog09
Wed, Feb 10, 2010 : 9:24 a.m.
"A feasibility report presented last July showed a local income tax could raise $7.6 million to $14.2 million in new net revenues for the city, depending on the level of tax. That's after factoring in expenses and a 15 percent drop in property taxes that - per city charter - must go hand-in-hand with any income tax." Translation: The income tax is a tax increase that is designed to keep the beast well fed. The city would rather raise taxes than tighten its belt.
David Cahill
Wed, Feb 10, 2010 : 9:23 a.m.
I think the city income tax is a Really Bad Idea. It involves a new kind of tax, with new forms to fill out. Also, we get into a downward spiral of arguments, as groups are pitted against each other - landlords vs. renters, commuters vs. Ann Arbor residents. Also, there is an undercurrent of resentment against commuters by the proponents of this tax: a belief that commuters aren't paying their "fair share". I think we should all be grateful for the commuters who choose to work here, rather than target them for a tax. Plus, an income tax will never be approved by the voters. It will probably also cause the defeat of any Council members or candidates who favor it.
HappySenior
Wed, Feb 10, 2010 : 9:21 a.m.
"City officials acknowledge it will take a hard-fought campaign to educate voters about the benefits of an income tax." City officials need to finaly realize that voters, to a very large extent, don't believe what city officials say, don't trust them, and are tired of the "voters are not smart enough to understand our bookkeeping system" approach to dealing with valid criticism of the job they are doing. The city officials need the education, not the voters. We can smell what city officials are dumping from their buckets. The recent discussion about buckets is a case in point. Voters don't buy that excuse. Voters are tired of Ann Arbor coming back for more millages. There is no more to get. Ann Arbor has bled its residents dry. And now they want to open the veins of the non-residents who work here. The threat they always shove to the front is to cut safety services. The pools, the senior center, the golf course, the airport, the pet projects of hard core activists are preserved. Remember the sidewalk to the townships? Why did we pay for that? Remember the new recycling trucks and containers that are coming? Why did we pay for that? Now is the time to put a hold on the art fund. Now is the time to put a hold on projects that don't add to the revenue base. We can't afford more parks, on top of parking structures or not, at a time when we can't afford to take care of the parks we have. Remember how they "took" money from the water department funds for many years to pay for projects they liked better. Now we are paying high water rates to cover maintenance they should have been doing all along. That is the track record of city officials. They also moved costs to maintain the city parks to be covered by the millage funds, so they could have more money for their pet projects. The level of service to take care of the parks is now minimal. How much money does the city waste (I don't care from which bucket) by their shenanigans with the builders? How much did they spend to not comply with the MDEQ who really wanted to clean the water in the Huron River? How many consultants have they hired to "manage" decisions with their orchestrated citizen participation groups? They can't budget their way to prosperity??? Wake up!!! City budgets are not entitled to prosperity.
Theresa Taylor
Wed, Feb 10, 2010 : 9:21 a.m.
Cut spending and be more efficient. There are areas of the country that do far more with far less and we need to tighten the purse strings.
Benjammin
Wed, Feb 10, 2010 : 9:15 a.m.
To all of you that think it is a joke that jobs will leave AA, just look at Southfield. The only reason that Southfield has so many office jobs and business towers is that companies left Detroit when they started an income tax. People are mobile and can work in Chelsea - no income tax, no parking fees etc. Ann Arbor is not that unique that you MUST live or work here.
A Concerned Citized
Wed, Feb 10, 2010 : 9:13 a.m.
How much more can the working people of Michigan take? We are being taxed out of the State. Instead of making the community more user friendly, they are going to make it more taxing. Why is it that we as citizens have to live within our means, we can't automatically go and raise our paychecks, yet the City of Ann Arbor (and the State of Michigan) don't seem to have to play be the same rules as its citizens. I didn't get a raise last year, yet my taxes (property and otherwise) continuously go up. Send a message to the poltical representatives - they need to live within the current funds they have. We all have to do more with less, it's time they did the same. I'd be happy to show them how.
jj
Wed, Feb 10, 2010 : 9:08 a.m.
How about go all the way and charge a city sales tax. That way everyone will pay.
jlb314159
Wed, Feb 10, 2010 : 8:54 a.m.
Ah, "taxation without representation". As a worker in Ann Arbor, but a resident of Pittsfield Twp, I would have no vote in whether I was taxed or not. A tax may be needed, but this is one of the principles upon which this country was founded. I am already paying taxes for Pittsfield to support our government services, and now I will be asked to pay to support AA's as well? Anyone up for a Tea Party?
jcj
Wed, Feb 10, 2010 : 8:54 a.m.
KJMClark I am with you on this one. Lets see a show of hands if anyone really believes that someone that has a job in Ann Arbor is going to leave if an income tax is approved! If they do leave how far would we have to look to fill this loss?
Moose
Wed, Feb 10, 2010 : 8:51 a.m.
Future economic growth in the city is being been based on past performance. Yet, everyone knows the stock market disclaimer, past performance is no guarantee of future earnings. Growth in Ann Arbor, and most of the developed world in recent history was and is based on unsustainable economic bubbles, mainly in construction and high tech job growth here in A2. Times have changed. It will be decades, if ever, before we will see that kind of growth again. Indeed maybe times have changed enough for us to put a stop to boom and bust unsustainable growth, here and everywhere. Sadly, our local bureaucrats and several elected officials are deaf, dumb and blind if they imagine that we will or actually want to go back to basing our economic lives on a boom and bust, unsustainable economy. But alas, politicians who want to stay in office have no choice but to continue to feed us cotton candy and fairy tales. Few people want to vote for realist truth tellers or those who are willing to make tough decisions instead of politically expedient ones. Get real. Times have changed. Let's find real solutions to our problems and not continue to live in a dead past or rosy predictions of the future.
KJMClark
Wed, Feb 10, 2010 : 8:47 a.m.
Let's see a show of hands: How many people griping about an income tax live in Ann Arbor? This is going to tick off a bunch of people, but why should we care what people who live somewhere else think? Get jobs in your own community. Free up jobs for people who live here. Want to move your company out? See ya. I promise to not comment on your community's taxes if you keep quiet on mine. It's high time we reconsidered an income tax. Please make it clear - this will lower property taxes, the city charter requires that. It takes a vote from residents to change the city charter, so council can't come back and raise your taxes, only the voters can do that. State law requires the 1%/.5% formula. If we can get past the opinions of people who don't live here and discuss the facts of an income tax/property tax reduction, I think it has a good chance.
Freemind42
Wed, Feb 10, 2010 : 8:45 a.m.
Here's an idea, how about the city doesn't fund ridiculous projects like the Liberty parking strucutre? Here's another one, how about the city not spends millions of dollars on a city hall? we need to reevaluate our spending before we start taxing everyone who works here.
cook1888
Wed, Feb 10, 2010 : 8:44 a.m.
Can anyone out there vote themselves a raise (other than politicians)? Cut spending, live within your means like everyone else has to.
belboz
Wed, Feb 10, 2010 : 8:40 a.m.
"In favor of putting this question to the voters..." "we need to have an informed, wide-ranging community conversation..." Oooh. Some very direct, make a decision responses. Translation for those in need "Well, it is an election year. So really, I just want to do what the majority of the people want so I can get re-elected." How about you state your position people. You've been in the office long enough. Clearly, council members don't know how to make a tough decision. Income Tax offsets Property Taxes??? Pllleeeaaassee. How many times have you heard that. Wasn't the lottery supposed to suppliment school system budgets? Turned out to be just an excuse to spend more. Not until they ELIMINATE property taxes will I support Income Taxes.
jcj
Wed, Feb 10, 2010 : 8:39 a.m.
Mr Benjammin "hmm, time to move". Don't let the door hit you in the rear. I am sure you have plenty of options on the table for new jobs! I am tired of all the false bluffs.
Nerak
Wed, Feb 10, 2010 : 8:26 a.m.
Now that the City has really, finally had to grapple with budget-cutting, it's absolutely time to act on a city income tax. It's foolish not to spread the tax base more broadly. In spite of what the Chamber or other nay-sayers have said in the past when this topic came up, people will not stop coming here to work or live. As Nike said, Just do it.
Moose
Wed, Feb 10, 2010 : 8:17 a.m.
Let's see the REAL NUMBERS of people who will be affected. How many people actually work here and don't live here? The actual numbers, which people, how many and how much will they pay?Who are these people? Where do they live? What are their actual incomes? How much tax will actually be generated? Who wins? Who loses? How many businesses will not locate here or relocate to the surrounding area so their employees won't have to pay the tax? Let's debate those real numbers, not pie in the sky, hired consultants who support the people who hired them, numbers. How much will it cost us to manage a new tax bureaucracy?
DagnyJ
Wed, Feb 10, 2010 : 8:11 a.m.
The income tax is based on a wing and a prayer. If we switch, property taxes are either knocked down (and can't be raised) or are eliminated. So if the income projections are wrong, then the city could have FAR LESS money than it has now. And state law prevents raising the income tax rate. The good thing about property taxes is that we know exactly how much will be collected because there are fairly good records of properties, values, sales, etc. How about the city CUTS SPENDING???? PS. My second ward councilmen both should be voted out of office. Shameful, wasteful spendthrifts.
DaveQ
Wed, Feb 10, 2010 : 8:09 a.m.
Why is everyone crying about the impact on the residents. Is there any merit to the satatement, "it would shift a portion of the city's tax burden off residents and onto the estimated 75,000-plus commuters who work in Ann Arbor but don't live here or currently pay taxes."
Benjammin
Wed, Feb 10, 2010 : 8:03 a.m.
So if I live in Ann Arbor - I pay full tax but if I move a mile away I pay 1/2 tax and if I move my home and office (and employees) out of Ann Arbor I don't pay any tax, hmm, time to move.
InsideTheHall
Wed, Feb 10, 2010 : 8:02 a.m.
NO NO NO! An income tax will be the kiss of death for Ann Arbor and the entire Washtenaw County region. Just look at other cities that have implemented a city income tax and what happened to their tax base....it shrank big time. Why make this region even more uncompetitive in attracting new business and JOBS....yes Democrats think JOBS. If Ann Arbor is strapped for cash and does have the stones to downsize the government then convert the Green Belt money into operating revenue...will need a vote of the people.
Craig Lounsbury
Wed, Feb 10, 2010 : 7:49 a.m.
I can balance the budget with current revenue in about 5 hours. All the city needs to do is pay the bar tab for me and my "associates" while we are slashing spending. Since we would operate in the light of day, you may have to buy a couple beverages for a reporter or two fro A2.com to observe. But if the city insists on raising revenue how about a politicians "lier tax"? Every time a politician fudges the truth we "tax" them.
GoblueBeatOSU
Wed, Feb 10, 2010 : 7:43 a.m.
These people just don't get it......they refuse to look at their wasteful spending. All the want to do is take money from Ann Arbor/Michigan residents and spend that money out of state or stuff it into their own pockets through excessive benefits. 10 -1 I could walk into city hall go through the book and find lots of ways to reducing spending quickly. Maybe that's the solution. A group of citizens needs to go to City Hall and demand to see the accounting records.
Commoncents
Wed, Feb 10, 2010 : 7:29 a.m.
If Ann Arbor raises taxes the people in charge are COWARDS. Make some tough decisions, cut spending and DO YOUR JOBS! To pretend there is no way to become more efficient is a joke. I would actually consider moving if this goes through....
racerx
Wed, Feb 10, 2010 : 7:26 a.m.
@Alan Goldsmith-while we're letting the voters vote, let those employees at the UM who would be affected the most vote!
stephanie
Wed, Feb 10, 2010 : 7:25 a.m.
tax the people for mother nature.
a2grateful
Wed, Feb 10, 2010 : 7:07 a.m.
Tax Mother Nature for snowflakes...; )
stephanie
Wed, Feb 10, 2010 : 6:52 a.m.
Well it's snowing so the city can raise more money by harassing and ticketing their citizens for not shoveling their snow. They should be able to balance their budget by continuing to harass the citizens of Ann Arbor. Who cares how many people die of a heart attack from shoveling snow. They need to pay for the new police/court building, oh and lets not forget the money they are pouring out to the German artist. We have an irresponsible and extravagant mayor and city council who have refused to live within their means and they will tax and harass the citizens of Ann Arbor and anyone else they can find to pay for it.
jondhall
Wed, Feb 10, 2010 : 6:39 a.m.
This is a rather novel idea, but how about cutting spending instead of increasing taxes. Government was never meant to be the cure all heal all for all. It will be areal nice vote all the students will vote for it! Imagine that they hail from New Jersey or New York.