Stories indexed with the term ‘Headlee override’

County Board Eyes Slate of Revenue Options

Washtenaw County board of commissioners working session (Aug. 8, 2013): A range of ways to bring in additional revenues – including increases to existing taxes, or new millages requiring voter approval – are being explored by county commissioners. They’re working to overcome a nearly $4 million budget deficit in 2014 without further cuts to programs and services.

Shamar Herron, Yousef Rabhi, Washtenaw County board of commissioners, The Ann Arbor Chronicle

Yousef Rabhi, right, chair of the Washtenaw County board of commissioners, talks with Shamar Herron, workforce development manager in the county’s office of community & economic development, at the county board’s Aug. 8, 2013 working session. (Photos by the writer.)

A memo prepared by Conan Smith (D-District 9) outlined six options for generating more tax revenue. Three of those options would not require voter approval, because the Michigan statutes that authorize the millages predate the state’s Headlee Amendment. The board already levies two of these types of taxes – for indigent veterans services, and agriculture/economic development – but doesn’t yet levy the full amount allowed by law. The third tax in this category, which the county doesn’t levy now, would pay for road repair.

Other approaches would need voter approval. A Headlee override – allowing the board to raise its operating millage to the cap of 5.5 mills, from the current rate of 4.5493 mills – would result in an additional $13.5 million in tax revenues next year. The rate of 5.5 mills has been rolled back over the years by the Headlee Amendment, which was designed to prevent property tax revenues from increasing faster than the rate of inflation.

Commissioners also discussed the possibility of putting a millage proposal on the ballot for specific purposes, like public safety. Sheriff Jerry Clayton attended the working session and stressed the importance of funding for public safety.

A targeted millage could also pay for annual contributions toward the county’s unfunded pension and retiree healthcare obligations. But that strategy would not eliminate the entire amount of unfunded liabilities, estimated at nearly $300 million. A controversial bond proposal intended to eliminate those obligations was halted in early July. [See Chronicle coverage: "County to Push Back Vote on Bond Proposal."] However, on Aug. 8 some commissioners indicated that bonding was not off the table, and could still be considered. Michigan’s Public Act 329 of 2012, which enables municipalities to issue bonds for these kinds of obligations, has a sunset of Dec. 31, 2014.

In other possible revenue strategies, Conan Smith also advocated to use some of the general fund’s roughly $16 million fund balance, to support one-time investments like capital expenditures or to replenish fund balances in specific departments. He had made a similar proposal at the board’s Aug. 7, 2013 meeting, but did not win support for it from the majority of commissioners.

At their working session, several commissioners expressed general support for seeking some kind of voter-approved tax, either a Headlee override or a targeted millage. There seemed to be less support for tapping the general fund’s fund balance. Yousef Rabhi (D-District 8) described the fund balance approach as “a short-term energy pill. It’ll get us a couple feet down the road, but it won’t give us the miles that we need.”

It’s unlikely that a millage proposal would be put on the November ballot. To do so, the board would need to take action this month, which would require calling a special meeting. The board’s next scheduled meeting is Sept. 4.

The Aug. 8 working session also included a presentation by Mary Jo Callan, director of the county’s office of community and economic development, about current and proposed initiatives related to economic development. The session was attended by Ann Arbor SPARK executives, including CEO Paul Krutko.

This report focuses on the board’s budget discussion. [Full Story]

City Income Tax: Maybe Later


The city of Ann Arbor's CFO, Tom Crawford, prepares his laptop to make projections – which were blue, in both senses. (Photo by the writer.)

Ann Arbor City Council work session (Aug. 13, 2009): Towards the end of the city council’s Thursday evening work session on a possible city income tax, city administrator Roger Fraser asked the council for some direction. Here’s what he wanted to know: Should city staff place an item on the council’s Aug. 17 agenda that would allow the council to put the tax before the voters in November?

In response to Fraser, Marcia Higgins (Ward 4) said she wanted more dialogue on the exact percentage of the tax to be levied, even if the ballot language specified “up to 1%.” Carsten Hohnke (Ward 5) followed by saying it was clear that his colleague, Sandi Smith (Ward 1) had requested additional case-study scenarios for individuals and that he himself had wanted some cross-checking of commuter numbers with the city’s transportation staff. “We don’t do the community any favors by taking the conversation to the next level without more information,” Hohnke said. Sabra Briere (Ward 1) then advised that she thought an emotional reaction could be addressed, if people first became more knowledgeable – she herself had had problems correctly interpreting the charts in the city income tax study.

Finally, Tony Derezinski (Ward 2) declared, “Let’s cut to the chase. I think there’s a consensus we should not have it before us on Monday.” And no one disagreed with him.

Barring surprise, then, the Aug. 17 council meeting will end without the council authorizing the placement of a city income tax on the November ballot. That will be the last opportunity council has to make such a decision. It’s therefore almost certain that the ballot in November will not include a question on a city income tax for Ann Arbor. Based on council discussion during the work session, a city income tax will, however, eventually be given serious consideration as a May 2010 ballot issue.

In light of the prospect of a May 2010 ballot question, it’s worth noting the kinds of issues councilmembers raised with Fraser and the city’s CFO, Tom Crawford. We’ve also folded into this report an account of a recent meeting sponsored by the Ann Arbor Area Chamber of Commerce about the proposed tax. [Full Story]