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Seriously Talking Taxes

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The Human Dimension

Even residents who are uncomfortable with the results of the recently adopted 2-year budget have praise for the way last Monday's CITCOM meeting was conducted. City Manager Don Johnson draws kudos for voluntarily taking a bigger cut in compensation that other executive-level city employees. Don's review of the budget included a statement that the city's taxable income for the next few years is not enough to pay for Police and Fire, which -- depending on what is counted -- accounts for 70-85% of the city's General Fund. He dropped the information that Birmingham's Public Safety uses only 54% of that city's general fund.

Then there is Mayor Jim Ellison who reviewed the overall situation and politely disproved the charge that CITCOM went after Police and Fire "first." Public Safety was addressed "last," Jim offered, after all other departments had been addressed. He was a bit more vigorous when he addressed statements like "Close city hall. Fire everybody except Police and Fire." He showed a little fire when he responded to such simplistic charges with the deliberately simplistic, "Who will write their checks?"

And Commissioner Terry Drinkwine, whose blunt-but-direct approach to solving problems pleases some and irritates others, looked directly at public safety personnel sitting in the audience and made it clear that only Police and Fire have so far failed to become part of the solution by agreeing to some concessions. Terry, probably recalling other times when Public Comment was stacked with supporters of what proved to be a losing cause, suggested that the "handful" attending this meeting are not necessarily representative of the majority of voters.

How much? For what? How long?

CITCOM and the Administration have moved into the millage phase of addressing Royal Oak's financial situation, a phase they have avoided since 2005, when a minimal millage request was shot down by voters.

There were emotional calls for a millage dedicated to Public Safety during Public Comment last week. Others said they would consider any millage, if its need and length are clearly explained to them.

There is insufficient time to place a millage on the August ballot, which, happily, provides protection against officials being stampeded to "do something now."

It won't be a catastrophe even if a millage proposal doesn't make it on the November ballot, because the just-approved 2-year budget gives us time to do it right. Officials and voters have time to deliberate, not just emote, about the specific purpose of any one or more millages, how many mills, and for how many years.

During discussion at the 07 June 2010 CITCOM meeting we heard that a 6-plus mill increase, if passed today, would in three years leave us financially where we are today -- unless substantial restructuring of compensation practices is accomplished.

How about establishing an ad hoc committee which includes elected officials, appointed officials, city workers, and residents -- all "stakeholders"? Advisory only, but unrestricted in scope, free to explore all options: expenses, revenues, the city's Table of Organization, labor relations, outsourcing, some idea not yet thought of.

It's mid-June 2010.
The 2-year budget has been passed.
Talk has begun about increasing the millage, about a dedicated Public Safety millage.
And one question is increasingly, if cautiously, being asked: "Is this town going to be controlled by elected and appointed officials -- or by  the unions?"
 

Yes, Royal Oak residents and voters are beginning to pay attention.

Donigan goes for a sin tax
Term-limited State Rep Marie Donigan (D-Royal Oak) has introduced House Bill 5059 which "would authorize local excise taxes of up to 50 cents per glass on alcohol sold by the glass," according to a report in the Summer 2010 issue of Capitol Confidential, published by the Michigan Center for Public Policy.

After Tuesday's primary election, one Democrat and one Republican will be running to fill her slot in November. The Dems: Frank Houston, Bob Klotz, Kevin McLogan, and Jim Townsend. The Repubs: Ken Rosen and Bill Shaw.

An excise tax is "A tax imposed on the performance of an act, the engaging in an occupation, or the enjoyment of a privilege," or "A tax laid on manufacture, sale, or consumption of commodities . . . ," according to Black's Law Dictionary.

10 Aug 2010
Representative Marie Donigan

I introduced the drink tax bill at the request of the Royal Oak City Commission. With the possible demise of revenue sharing at the hands of the Michigan State Senate, local governments want other options. There's been one hearing in front the House Tax Policy Committee. There may be more if revenue sharing does indeed get the axe this fall.  A dime a drink raises 1.2 million dollars.