City Income Tax Worst Idea of the Year

Taxes Need to Go Down, Not Up; the City Needs to Get Into Profit Ventures

November 10, 2006
By: Dave Rogers

The old idea of a city income tax has been awakened from the dead.

Please, city officials, re-bury it.

Voters smashed a city income tax idea in the 1970s and it should stay that way.

The city should be thinking about how it can create revenue, not extract more out of already squeezed residents through even more burdensome taxes.

An income tax would drive the final stake in the heart of the city's economy. Why the idea is even discussed is baffling.

City property taxes are so high on new or recently sold properties as to cause a severe depression in the real estate market.

Existing properties that are "grandfathered" under the Headlee restrictions are OK and taxes are reasonable under those circumstances.

So most people who have lived in their home for a while don't realize how drastic the situation is for new construction.

The main hope for revitalization of the city economy is to reduce taxes below that of surrounding townships. That will require some great ideas and the courage to put them into reality.

There is talk again of public forums to brainstorm how the city can get itself into the black.

Supposedly these forums are to be scheduled after the first of the year.

They were going to be held last fall, but that idea never took root.

It is well past time to get citizen input on how to put the city on a firm financial footing.

Putting the city on a firm footing might start by stopping spending.

Even the $16,500 for a consultant to tell commissioners which fire stations might be closed and what the effects would be is probably an unwise expenditure for a city that is bleeding.

We have highly skilled administrators on staff who could be assigned to produce such a mundane report. Why is a consulting firm needed?

The city already spent about $400,000 for consultants to give advice on what to do with the 48-acre Industrial Brownhoist site on the river. And another $70,000 for consultants to recommend a marina on the site, a plan that would bring in exactly zero revenue. In fact the report by Public Sector Consultants indicated another marina might take traffic from the present transient marina in Veterans Park next to Hooters.

The city has only a few areas in which it could make money to offset high taxes:

1) Generate and sell more electric power, either through establishing a windmill farm at the mouth of the river or purchasing more power wholesale and reselling at a profit;

2) Improve the water source and sell more water (this requires a merger with the Saginaw-Midland Water System that was narrowly defeated in a referendum in 1971 on a plan that required a "no" vote to get a positive result; talks on this issue were underway through the road commission but nothing has been heard about it for some time);

3)Establishing a city cable broadband system and selling the service at a competitive price that still is profitable.

In short, the city must do whatever it can to create a profit from enterprises that are legal for municipalities and that do not damage existing businesses that pay taxes.

That may be like walking a tightrope in some cases so the concept of the "greater good" will have to be paramount.###