A couple nights ago, I posted something here about our Governor’s proposed 2012 budget. My impression, as I shared with you, was that, while he was doing some things that were both good and necessary, he was, for the most part, just shifting the economic burden to the local communities, who would be forced to pass additional taxes in order to compensate for the lack of state support. The resulting conversation was really good. People pointed out, among other things, for instance, that he was also shifting a disproportionate among of that burden to our aging cities, like Ypsilanti. As I know a lot of you don’t read the comments, I decided to move a few of the most interesting things that were said up here, to the front page… Before we get to that, though, I just want to say once again that I realize that we’re in difficult economic times, and that shard sacrifice is called for. And, I don’t have a problem paying more in taxes, if it can be demonstrated that said taxes are being used constructively, for the betterment of our sate and its people, many of whom are in desperate need of work, food, shelter, etc. I, however, would like to know that such sacrifices are being made across the board, by everyone in our society, and not just those of us who are still, thankfully, remaining in the middle class. With that said, here are a few of my favorite budget-related comments.
Pete Murdock:
$1.2 million loss in revenue sharing and an additional +/- $60K in Fire Protection money for providing EMU with fire protection – which was already only partially funded. This is about 10% of our general fund budget.The elimination of Brownfield Tax credits could hurt any redevelopment efforts of Water Street, since that was going to be the source of funding for infrastructure.Yes, very depressing. A budget that increases taxes on low income residents and seniors and defunds urban communities to fund a massive tax cut for business. I guess this is really what Re-inventing Michigan looks like.
Murph:
As Pete mentions, the elimination of Brownfield Redevelopment Tax Credits could be pretty bad for Water Street, and any number of other projects in town. (An unnamed international company that was looking at the ACH property a while back noted that the state’s Brownfield credits were an absolute, positive must for them to even consider a project – I think they ended up in Germany.)The proposed elimination of historic preservation tax credits is also pretty bad for Ypsilanti and similar cities.
Maurers used both the Brownfield MBT and Historic Preservation tax credits to finance the Mack & Mack building renovation (SPARK East + lofts ), and the Mellencamp building renovation underway (where the Rocket’s new space is). Beal has said that successful redevelopment of the Thompson Block will depend on the historic preservation tax credits (and he’s not wrong).
The irony is that the elimination of these credits is being pitched in the name of “leveling the playing field” and “stop picking winners and losers”, but, unfortunately, will do exactly the opposite. These and similar credits were created to level the playing field, and address the fact that factors like soil contamination, obsolete buildings, asbestos & lead, etc., made it difficult to do business in places like Ypsilanti – and to level the playing field by balancing out some of those extra costs. (At the same time, of course, we get public benefits out of it, like cleaning up soil contamination, removing health hazards, and so on.)
So the budget proposal not only cuts our revenue sharing from the State (the revenue sharing that was put into place to make up for the limits that were placed on our ability to fund ourselves) but also takes away the tools that are critical to supporting economic development in an older city. Good stuff.
And, as always, it’s worth noting that Ypsilanti is in no way alone on the fiscal yikes here – worries about water street aside, the city has done a great job over the past decade to get its house in order and avoid the level of pain that similar cities are facing:
Even before the budget was announced, for example, Ferndale was placing a 5.5 mil Headlee override on their May ballot; Hazel Park will have an 8 mil public safety millage on the May ballot; Ann Arbor, of course, is circling back to the income tax discussion again; Southfield is putting 5 mils on the May ballot; Madison Heights I think is asking 1 mil Headlee override + 1 mil dedicated for public safety. Romulus and Oak Park both have February ballots coming up asking for 2-3 mils.
Glen S:
And, from a political perspective — these measures mean tilting the playing field in favor of new economic development in rural, exurban, township areas (= rewarding Republican voters); and against older, urban, built-up communities (= punishing Democratic voters)…Rick Snyder really IS a political genius, I suddenly realized yesterday.
Unlike Wisconsin Governor Scott Walker — who has ignited a national firestorm over his strident and quite overt efforts to bust unions, slash pensions and other benefits, and generally dismantle what’s left of any opportunity for Wisconsin’s public sector workers to enjoy a modest, middle-class lifestyle — Snyder has a smarter, but much more insidious plan.
By dramatically slashing revenue-sharing, per-pupil student aid, and other forms of basic support for Michigan’s struggling cities, school districts, etc., to such a degree that unprecedented restructuring clearly will be necessary, Snyder is, in effect, “outsourcing” the dirty work of breaking unions, reneging on promised pension benefits, etc., to locally-elected city councils, school boards, county commissions, etc.
This way, over the next two years — while hundreds of individual Michigan cities, townships, counties and school districts are all busy fighting their own individual battles with their own individual workers and unions — Snyder will appear to be keeping his hands clean from all of the local budget “unpleasantness,” — while he continues to promote himself as as a genial, and business-minded “one tough nerd,” whose only agenda is promoting “shared sacrifice.”
Of course, you can bet the “shared sacrifice” he envisions won’t include any of Michigan’s wealthy citizens or corporations doing any of the “sharing.”
Thomas S:
I lost my job due to the recession and although I found work I earn less than half what I did five years ago. The idea of increased millages is very scary since I can barely meet my mortgage. I may be hypocritical since I was opposed to the income tax before but an income tax or sales tax increase would now be prefereable for me. I hope the mayor and others takes our current under/unemployment situation into consideration when deciding what would do the least harm. More foreclosures aren’t good for anyone in our city.
