With the same level of determination and a lot more smarts, 700 members of AFSCME Local 2733 and members of six other smaller bargaining units gave back contract benefits totaling about $6.6 million to help reduce Washtenaw County’s projected 2010-11 budget deficit. I have lived in Ann Arbor 49 years and do not recall a similar circumstance. Were county services over? Were the jobs of up to 150 union members over? The Locals said “Hell, no.”

It was a big deal.

The big deal wasn’t the savings of $6.6 million. It was the commitment of more than 700 union members. They got involved and were part of the solution. Likely they will stay involved, taking an even greater interest in county government and providing a balancing oversight for future spending practices. These unions now have a dog in the hunt.

My grandfather knew something about dogs. On a hot summer night, he used to sit in his rickety rocker on a wooden porch in the foothills near Maggie Valley. I may have had a good day, or I may have had a bad day … but his response to the report of how my day went was always the same. “Sonny, just remember – the sun don’t shine on the same dawg’s ass every day.” So before I went to bed that night, everything was put back in a more balanced perspective: That day was neither a good day nor a bad day, and I slept a lot better because of his wisdom.

I think the sun might shine on the ass of the county unions’ dog in the not-too-distant future – hopefully to the tune of restoring the $6.6 million in wages that they gave up for the betterment of their members and the people of Washtenaw County.

Like the county, the city of Ann Arbor is also facing a financial deficit. Their director of labor relations, Robyn Wilkerson, is currently negotiating five contracts that have already expired. She reportedly stated that she is not completely sure of what that deficit might be. That’s not a good sign.  If you don’t know where you are, it’s hard to negotiate you way to where you need to be.

Over the years, I have known all of the city administrators going back to Guy Larcom in the early 60s, and I’ve spent too many of those years auditing the financial accounts of the city. Administrators in many other cities have a very short shelf life – not much longer than an opened can of white albacore tuna. In recent years, the city has been fortunate to have the services of its current administrator, Roger Fraser.

The number of full-time city employees has been significantly reduced during his tenure. Roger believes that frequently work expands to fill the size of the workplace. The only way to gain efficiencies is to eliminate positions and see if the work goes away without impairing city operations.

The city’s finances are more complex than those of the county. The county takes in property taxes, fees and government subsidies, pays for recording/collection operations (via the clerk and treasurer), maintains county drains, staffs the sheriff’s department and operates the jail.

The city, on the other hand, has more separate funds and fiefdoms. And in the distant past, all of the Downtown Development Authority revenues were going into the city’s general fund to pay for police, fire, streets and sewers, parks, assessor, human resources, etc.

Now, the parking structure/lot revenues go to the DDA to pay for parking operations and for improvements downtown. Plus, the increase in property taxes within the DDA district –the “increment” in tax-increment financing (TIF) – goes to the DDA. To determine accurately the city’s projected financial deficit, the working capital and the projected revenue and expenses of all of the funds – including those of the DDA – need to be considered. I agree with Robyn at this point: I am not exactly sure of what the projected deficit number might be.

But as John Belushi said, “Nothing is over until we say it is.” So let’s hope that the city and its employees can also work together in solving what will be an increasingly difficult financial position over the next three years.

About the writer: Del Dunbar, a CPA and partner with Dunbar & Martel, has lived in Ann Arbor since the 1960s.

“Not so,” Mr. Lee tells CNN on tax day. The assessment seemingly was set high enough in hopes of encouraging Mr. Lee to file his past-due returns and pay the correct tax with interest and penalties. “Won’t happen,” further retorts Mr. Lee. “I feel badly about the whole thing but I just can’t bring myself to figure out the complexities of the California income tax forms. I hope they will call me and we can agree on some number and I’ll just pay it.”

If Mr. Lee, a businessman with a few rental properties, is confused by the California returns, he is most fortunate not to be doing business in Michigan. The governor’s new Michigan Business Tax, with its mind-numbing complexities and inequities, sets the gold standard for costly tax attorneys and CPAs. Likely the governor’s  State Treasurer has already realized – or soon will – the significant free give-a-ways, tax credits, and subsidies that will be needed to get any prospective new business to buy into the MBT mess, a tax adopted at 2 in the morning by a sleep-deprived (brain dead?) legislature surrounded by dozens of well-paid and wide awake lobbyists.

April 15^th has come and gone for another year and with it the prolific number of blogs and editorial demands for tax change. Mr. Timothy F. Geithner, the new U.S. Secretary of Treasury, will likely offer up some changes (crafted by dozens of lobbyists imbedded in the Beltway) to a tax system already teetering on the brink of collapse from complexities and complications. The system can’t take too many more patches, particular from The Secretary, who recently nicked the Treasury for about $17,000 in unpaid Social Security taxes on his own personal return.  More changes, more complexities, more unfairness is putting the tax system itself at risk. A small patch here or there now seems to be causing a leak somewhere else.

I have been in the tax compliance business, as a some-time teacher and full-time practitioner, since 1967. It is time for our industry, with all of its attorneys, CPAs, estate and tax planners, auditors, etc. to just go away. Shoo…go home. Our tax system doesn’t need a tweak, it needs a hatchet job.

The  hatchet job would eliminate the income tax and adopt a national sales tax on consumption and financial transactions. All of the illegal drug and gambling money that is laundered through our banking system daily would be taxed upon deposit. If Bennie the Bookie decided to get out of the market entirely and go to cash on deposit in the back yard, at some point he will likely spend it. Those front row tickets at the Lakers games must be had. There would be no sales tax on necessities. The national sales tax on other items would be graduated, with luxury items being taxed at a higher rate at the time of purchase. 

The system is already in place to accurately assess and collect the tax. If you are one of the 700 people at Merrill Lynch who had a bad year in 2008 (each only making more than $5 million), you would pay a financial sales tax when you stored your money in your CMOs, REMICS, and all of those other financial products that no one but you can understand. And, at this point we’re not so sure about your depth of understanding, either.

We, as a people, don’t like  to focus on the income side, keep records, disclose salary and perks, keep track of what the person in the next cubical is making, paying or avoiding in taxes. But everyone likes to buy and consume or even invest. There would be no record keeping for Mr. Lee or any other consumer/investor. Bill and Winston, could become close friends, join the local coastal touring society and each drive out of the Mercedes dealership with a new roadster – but each would also be a little lighter in the pocketbook. This way, everyone participates by giving back for our national well-being at a time they are the happiest…at the moment of consumption.

The U.S. Treasury estimates that the amount of unpaid taxes is in the billions, enough to fund the Pentagon’s budget for six months. The department also anticipates that it will get worse this year as more people have to go into a self-employed/cash survival mode. It’s so unfair. 

Consider the following: A middle-aged, self-employed single woman making $50,000 a year pays over $15,000 in taxes while barely able to make the monthly rent payment in a 700-square-foot studio in Brooklyn. Sam Slick, a real estate developer across the river in Manhattan, wants to sell his Park Avenue property for $100 million. Unfortunately, his tax attorney computes that the taxes on sale would approach $35 million, leaving only $65 million for Sam, hardly enough for a down payment on a new estate in the Hamptons. So Sam mortgages the property for $100 million at Bear Stearns, pockets all the money, pays no tax on the loan proceeds and upgrades to a beachside villa in St. Barth’s. Sam croaks the following spring, and before he can even push up some daisies, Sammy Jr. inherits the Park Avenue property. The income tax unpaid on the $100 million is forgiven in the estate tax process. The Treasury Department calls it an estate “step-up” adjustment.  Further, Sammy Jr. falls in love with his father’s young widow (“Wiffels”), defaults on the $100 million non-recourse mortgage at Bear Stearns, takes the rest of the residual estate and hikes off to enjoy the beach with Wiff and the rest of the glitterati.

Sammy Jr. and Wiff may live happily ever after on St. Barth’s, free of U.S. income taxes because of the income exclusion rules for U.S. citizens residing in a foreign country. No, they don’t pay French income taxes either, because France does not tax the residents of St. Barth’s.  However, the sales tax is very steep on a bottle of expensive wine. After a great day at the beach, it’s a tolerable expenditure for the common good.

Oh, by the way, your tax dollars paid off Sammy’s defaulted mortgage (now called a “toxic asset” by Mr. Geithner) which Bear Stearns sold to Goldman Sachs shortly before going out of business.

Say it ain’t so…but it is.

About the writer: Del Dunbar, a CPA and partner with Dunbar & Martel, has lived in Ann Arbor since the 1960s.

I only talked with him a few times before he got sick. He seemed far too quiet and too young to have had so many successes. Plus, he was always skinny despite devouring at each Michigan Historical Society meeting what seemed to me to be an inordinate number of raisin oatmeal cookies.     

“The world is run by those who show up” was the motto he adopted in dedicating his life to improving health care for the people of Michigan. He worked tirelessly to ban smoking in the workplace, increasing childhood immunization rates, advocating for AIDS education and better end-of-life care. Although a Michigan State graduate, his adage seems particularly applicable to Ann Arbor.

Kevin was a public advocate who extended his motto to “Show up, be hard on the issues, soft on people.” President Obama may have unknowingly adopted Kevin’s motto with his grassroots campaign that produced a record number of voters who, despite long lines, showed up last November 4th. This renewed interest in showing up was beamed around the world later that evening from Grant’s Park, and again at his inauguration in January.

Kevin’s public policy attitude is also alive and well in Washtenaw County. A while ago, an older gentleman (my age) at Knight’s restaurant complained to me about our liberal city council persons. I asked him if he voted in the last local election and he said he doesn’t bother anymore and hasn’t in some time. So who is to blame? Actually, it takes relatively few votes to elect a person to council in several of the city wards. The activists rally their troops and show up.

Over the past two or three years I have found myself doing a slow burn at several city council meetings as one activist presenter continually misrepresented the facts in pressing her  anti-growth agenda. To me it seemed to be more of a personal attack on anything and everything that was fair and reasonable. After the meeting she came over and said to me, “I wish you were speaking for our side, this is going to be a close call.” Upon further reflection later in the week I realized that there was nothing personal in her diatribe at all. It was just local politics and she was going hard on the issues. I didn’t particularly like her then because I didn’t understand her. Kevin would never have made that mistake.

When I look at the composition of our city and county government, I believe we have pretty good people working for us and have had for some time. At a Washtenaw County Board of Commissioners meeting last year I showed up for the first time ever to speak on behalf of a developer. Before the meeting, one commissioner said he supported the project but couldn’t vote for it for political reasons. He asserted, “Don’t worry – you’ve got the votes and the board is going to do what’s right. If it was even close, I would cross over.” This commissioner will likely be re-elected as long as he runs because he is and always will be, despite political necessities, soft on people, particularly when it means jobs.

I have been in Ann Arbor since 1960. To my knowledge during that entire time Washtenaw County has been free of the political corruption and malfeasance that has plagued Detroit and a few other communities in Michigan. Maybe that’s because many of its residents and most if not all of its elected  officials are as concerned as Kevin was – and they show up.

(Kevin A. Kelly, age 52, died on Dec. 15, 2008. He was the former Michigan State Medical Society Executive Director. His efforts and contributions on behalf of charitable organizations outside of MSMS are far too numerous to mention within this column.)

I still remember the streets and house numbers as well as some of the more scandalous family entanglements on “my route.” It was hard to keep anything from the paperboy since things seem to either happen or clear out just before daybreak. Recently, a retiree in Ann Arbor said that she grew up at 126 Tyrell Street in my home town. I blushed at the reference because I always had difficulty “collecting” the 40 cents owed each week for the daily and Sunday from her folks. They would always ask me to come back tomorrow which meant another long bike ride the following afternoon. I didn’t tell her that I was from the same bump in the road, because I just didn’t want to go back there, even in my mind.

The papers would be delivered in a 1949 Ford truck to Mr. Derry’s basement long before daybreak. I got there soon thereafter and prided myself on being able to fold a paper tighter and faster than Jimmy, my older colleague. It was important to twist the papers as tight as possible so that I could fit all 82 papers in one dirty canvas paperbag with the Free Press logo on it. That way I could prop the bag on top of the handle bars and it made the delivery much easier. I hated Thursdays because the papers were fatter because of the advertising for the weekend. Going to two bags meant I had to put the lighter bag over my left shoulder, making it much harder to navigate my blue Columbia in the snow.

I only got 82 papers. If I miscounted and shorted myself, then I had to go all the way back to get the extra paper. Usually the extra paper was not there, because Jimmy would always leave after me. He didn’t go to school (because he didn’t want to and his parents lived on a farm). He would take my paper as an extra in case he had miscounted or in case one missed overhead fling resulted in a wet and muddy tabloid. The end result was that I had one very unhappy customer. I would get stiffed 7 cents (collecting only 33 cents) the following Saturday afternoon when I “collected.” I would have to pay 5 cents out of my own pocket to cover the cost of the missing paper. The paper really wasn’t missing. If Jimmy didn’t need it, he would take it home to his folks to read.

I could understand why the family was upset about not getting the paper. That was pretty much all the news there was. Not that the paper had anything great in it, but everyone followed the Tigers. (They wanted to know exactly how many home runs Charlie (Paw-Paw) Maxwell had hit. Any other happenings seemed to take place at Carter’s Funeral Home, the bus station, or the Meteor Bar. But those are other suppressed memories.

The daily newspaper as I knew it is now in a heap of trouble. My two sons, both in their mid-thirties, read many online national newspapers. Just as the major banks got rid of community banking as we knew it, institutional newspapers seem to be leaving communities behind with shrinking newsprint and a cost structure that no longer makes business sense.

From adversity always seems to come a little opportunity. The Ann Arbor Chronicle – “the community newspaper and town hall” – is somewhat the way I remember the news, it just isn’t folded as tightly as my papers. The difference is I didn’t get paid anything to write this column and you didn’t pay anything to read it, so we’re even. I don’t like to owe anybody anything.