To tax or not to tax, that is indeed the question.
I attended the CBC Candidates Forum the other night and had the pleasure of submitting a question to the candidates. I asked, quite plainly, (and somewhat aggressively, sorry folks, it slipped out that way!!) are you going to implement the tax, and secondly, how are you going to secure funding from Lansing in the future?.
Schreiber opened the discussion by saying that he reluctantly supports the tax, that the problems the city is facing are state-wide, and that no immediate help is coming from Lansing. Schreiber made the assessment that the tax removes the city from the edge of financial insolvency, while placing Ypsilanti in the middle of the state-wide tax bracket. [Having read his figures some time back, I know that he has standardised his findings across income and property value averages- the claim is otherwise clearly fallacious]
Richardson made the point that she had suggested the tax before anyone else had come up with it, and her hope that the property tax rollback could be sufficient to offset the impact of the tax. Richardson mentioned the need for greater regional co-operation and intergovernmental agreements at very level.
Pierce is opposed to the tax, period. He believes the tax will create a barrier to business and place a greater, unnecessary burden on the community. He explained the rollback couldn’t be made large enough to offset the impact of the tax, and that over half of Ypsilanti’s residents are renters, and therefore get no benefit from a rollback at all. Pierce believes that the City needs to rethink the way it does everything from the payroll upward. Pierce’s approach to Lansing was the same, he says he will go to Lansing, not to demand a better deal, but to find out “what we can do better.” Pierce made the point that the income tax would place Ypsilanti as the highest taxed municipality in the state.
While the candidates each have different styles, it is on the issue of the Income Tax that their paths truly diverge. I believe that the Democratic Primary on August 8 will be a referendum on the tax, between Schreiber and Pierce. Those who vote for Richardson will most likely be doing so for reasons other than her stand on the income tax.
When the tax was discussed at length last year, I took a long look at who was supporting it, and who was against it, and I figured it was going to be inevitable eventually. The people who really mattered as far as setting policy and direction were resigned to it as a necessary evil.
State Legislation restricts the tax to a maximum of 1 percent and a maximum property tax rollback of 2 mils. There is also a $600 minimum exemption written into the legislation. These restrictions do not allow the tax to raise sufficient revenue to offset the problems faced by the city in the long term. The tax is at best a “band-aid” that will buy some time.
Even as a band-aid it is weak, and long-term fiscal sustainability is thoroughly dependant on better balancing of the budget.
Schreiber wants the tax in order to keep the city afloat a little longer and buy some time in the hope of a miracle from Lansing and from the greater community.
Pierce is banking on being able to make huge savings fairly quickly from negotiations that have not begun yet.
Neither solution is without risk. The Income Tax poses the single biggest threat to residential and business growth in our community for as long as it is in place. People have other attractive options for both residence and business in the area. Higher taxes are not going to make Ypsilanti any more attractive. While the level of impact on population and trade is not known, the tax is bound to have significant negative impact on both residential and business growth.
The income tax cannot be implemented responsibly without a long-term strategy for growth in the community. To date, no such strategy is forthcoming. The community needs to know how and where the City will make the necessary changes to its current practices and structure to justify the cost to the community that the tax will impose.
Such a plan has not, to my knowledge, been put forward by City officials.
For Pierce, the risk is being able to turn Ypsilanti around before it runs out of funds completely. The situation is likely to look fiscally scary in the meantime. There is not much more to say about that risk. Its going to be hard to balance the budget for a few years. We are going to have to make some cuts, and do a lot of things differently, but we are not saddling ourselves with the baggage of an income tax to inhibit growth.
My own opinon is of little condsequence. It is for the community to decide which level of trouble it wants to buy, because there are no easy solutions.
A vote for Pierce is a vote against the Income Tax. A Vote for Schreiber or Richardson is a vote to put the tax on the ballot.
Lansing could, with the stroke of a pen, make things a lot easier for built-out communities, and it would not cost them a red cent.
It is time someone started pushing that barrow, because tax or no tax, we must come up with better solutions than we currently have.