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A letter from the mayor
Friends and Neighbors,
If you have attended one or more of the first three Town Hall meetings on city finances hosted by your Council, thank you! If you have not yet attended a Town Hall, there will be other opportunities in the near future. Please try to come, and bring your neighbors. Understanding the factors that have wrecked the financial equation for Michigan cities will be the key to creating solutions that will help us keep Ypsilanti on track for a bright future.
By now you have no doubt read or heard that your Council will not be considering an income tax in order to balance the 2006-2007 budget.
When we appointed the Blue Ribbon Committee on City Finances in February of 2004, we were anticipating a shortfall of between $1-$2 million next year. This projection was based upon the magnitude of cuts in State Shared Revenues we had sustained over the past few years, and on the fact that some Legislators have been talking about eliminating these shared revenues all together when the current legislation sunsets. Based upon these and other income assumptions, the Blue Ribbon Committee recommended that Council consider putting a city income tax on the ballot.
However instead of further cuts, the State Legislature decided to keep revenue sharing at the same level for the coming year as for last year. This meant a huge improvement in our revenue estimates. In addition, city departments have been able to achieve additional modest cost savings, and we have earned a slightly higher rate on city interest-bearing accounts. So now the gap we need to close for 2006-2007 is more likely to fall between $300,000 and $400,000. Your Council has decided to try to close this budget gap with further belt-tightening.
The specter of a possible city income tax in the coming years still looms, however, until such time as the State's broken municipal finance model is corrected. So we are going to need to continue to study this issue as a Council and as a community.
Our first three Town Hall meetings covered the following topics:
- the workings and recommendations of the Blue Ribbon Committee,
- state-wide changes to the tax laws that affect revenues, and
- potential areas for cost savings through cooperation with Washtenaw County.
Our final four Town Hall meetings will be held on the following dates and topics:
- Tuesday October 18: Understanding the financial impacts of the DDA's. 7PM, EMU College of Business
- Tuesday November 8: How a city income tax would work (place TBA)
- Tuesday November 10: How emergency financial management (receivership) would work (place TBA)
- Tuesday November 15: Opportunities for Town/Gown cooperation
In the past week alone, there have been articles in the Detroit and Ann Arbor newspapers on the financial straits of Royal Oak, Mt. Clemens and Detroit. This is a state-wide issue, not just an issue limited to Ypsilanti. The Governor has appointed a task force to study the state's broken municiple finance model. When this task force begins to hold hearings around the state, we need to show up in force! As a result of all of our Town Hall meetings, we will be the best informed citizenry on these issues in the state !
The only way to avoid a city income tax for the long term is to change the financial assumptions we take to the city budgeting process. We can do that by working with Lansing to change the financial model. So please come to as many of the Town Hall meetings as you can, and then be willing to participate when the Governor's task force schedules it's hearings. It's going to take a lot of leadership to solve these problems. Unfortunately, Ypsilanti's small size, degree of tax-exemptness, and recent losses of industrial base are forcing us to face these issues sooner than is true for other Michigan communities. Fortunately, we have a wealth of talent living in and around Ypsilanti. By studying these issues together, we in Ypsilanti will be in a position to help provide the leadership that our city and state need.
Thank you one and all for your attention to this municipal finance problem. If you have missed Town Hall meetings, we do post information on the city website at www.cityofypsilanti.com with regular updates.
Please feel free to share this e-mail with your friends and neighbors, thanks!
Your Mayor,
Cheryl Farmer