Action Taken on 2 County Tax Hikes

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At their Oct. 16, 2013 meeting, Washtenaw County commissioners took action to increase two taxes for the upcoming 2014 budget – one for veterans relief services, and another for agricultural and economic development.

Final unanimous approval to levy a 0.0333 mill tax for indigent veterans services was given on Oct. 16, following an initial vote on Oct. 2. The new rate of 1/30th of a mill would be levied in December 2013 to fund services in 2014. It’s expected to generate $463,160 in revenues. The current rate, approved by the board last year and levied in December 2012, is 0.0286 mills – or 1/35th of a mill. It generated $390,340 this year.

According to a staff memo, the additional revenue is needed to address rising claims, the anticipated release of current active duty soldiers, the increased cost of living reflected in claims, continued increases to demand, and an increased workload due to the Washtenaw County Veterans Treatment Court.

The county’s position is that it is authorized to collect up to 1/10th of a mill without seeking voter approval. That’s because the state legislation that enables the county to levy this type of tax – the Veterans Relief Fund Act, Public Act 214 of 1899 – predates the state’s Headlee Amendment. The county first began levying this millage in 2008. Services are administered through the county’s department of veterans affairs. The county had held a public hearing on this tax proposal at its Sept. 18 meeting, but no one spoke.

A public hearing and initial vote were held on Oct. 16 for the economic development and agricultural tax, known as Act 88 of 1913. The proposed increase to the Act 88 millage is from 0.06 mills to 0.07 mills. The millage would be levied in December 2013 and would raise an estimated $972,635.

According to a staff memo, the funds would be allocated to the following groups:

  • $423,135: Washtenaw County office of community & economic development
  • $200,000: Ann Arbor SPARK
  • $100,000: Eastern Leaders Group
  • $52,000: Promotion of Heritage Tourism in Washtenaw County
  • $50,000: SPARK East
  • $50,000: Detroit Region Aerotropolis
  • $82,500: Washtenaw County 4-H
  • $15,000: Washtenaw County 4-H Youth Show

The enabling legislation for this tax is also pre-Headlee, and the county board levies the tax without voter approval. Dan Smith (R-District 2) questions whether levying this kind of tax is constitutional. He has asked the county administrator and corporation counsel for written explanation pointing to the statutory authorization for levying these taxes.

During deliberations, Conan Smith (D-District 9) made a motion to amend the increase and raise it to 0.09 mills. The motion died for lack of a second. He also moved to increase the millage rate in order to fund increases for three specific line items, but that motion also died for lack of a second. Those items were a community “capital acceleration” program, a local business employment cooperative, and market analysis for a local food manufacturing, processing and distribution system.

Alicia Ping (R-District 3) proposed an amendment that would have increased funding in the three line items that C. Smith had mentioned, but without increasing the overall millage rate beyond 0.07 mills. That motion was defeated, with support only from Ping, Dan Smith (R-District 2) and Ronnie Peterson (D-District 6). C. Smith said he wouldn’t support it because it would shift funding from other projects, rather than increase the overall funds.

Later in the meeting, C. Smith put forward a draft policy for allocating Act 88 revenues. It was given initial approval with little discussion, over dissent from Rolland Sizemore Jr. (D-District 5). A final vote on that policy will likely occur on Nov. 6.

During deliberations, amendments put forward by Dan Smith (R-District 2) called for both the Act 88 and veterans relief millages to be exempt from capture by tax increment financing (TIF) districts or authorities in the county. Those amendments were passed 8-1 over dissent from Kent Martinez-Kratz.

The board also held a public hearing on the Act 88 tax, which took place after midnight. One person spoke. An initial vote on Act 88 passed on an 8-1 vote, over dissent from D. Smith. A final vote is expected on Nov. 6.

This brief was filed from the boardroom of the county administration building at 220 N. Main St. in Ann Arbor, where the board of commissioners holds its meetings. A more detailed report will follow: [link]