The Michigan Daily-Thursday, November 2, 1978-Page 9
(Continued from Page i)
"If Michigan citizens reduce their
property tax liabilities, they, too will
face increased federal taxes," the
study says. "What may be more impor-
tant, however, is that Michigan local
and state governments will find them-
,selves less able to compete for and
cgeive federal dollars."
"I have a staff working right now on
, rading alternate sources of money,"
,id George Montgomery, chairman of
Ahe Michigan House Taxation Commit-
te,. "but there may be as much as 20
bper cent (of the estimated $1.7 billion
i the state would lose in property taxes)
iat we'll have to tell the local units we
ust can't raise. And no matter how
gainful it will be, they'll just have to
make the cuts."
THE STATE will be able to raise
;back some of the lost revenue, however,
since the Tisch plan does allow for a one
per cent hike in the state income tax,
which would amount to approximately
$510 million. The state would also save
some $300 million currently spent on
property tax credits. The state cannot,
however, raise any other taxes, since
the constitution provides a ceiling on
the current four per cent sales tax.
The Headlee plan, if passed, would
have very little effect on the state's
"finances, according to many officials,
,because the budget has, for at least the
past ten years, kept its budget within
the limits Headlee's measure sets
- State Budget Director Jerry Miller
also forecasts grave problems if the
(Continued from Page 1)
southwest of the capital.
The demonstrators demanded the
release of persbns jailed for their op-
position to th shah, Iran's imperial
ruler. The rioters, incited by Moslem
religious leaders, have clashed with
Iranian security forces despite the
government's martial law declaration,
issued in September, that affects 12
cities, including Tehran.
TENS OF thousands of, persons
paraded in the streets of Tehran
yesterday to express their joy over the
release of a religious leader.
At Tehran University, 20,000 students
gathered peacefully on the campus to
shout anti-shah slogans and mix with
Spposition political leaders.
The oil industry strike could create a
fight crude oil situation if it lasts a week
er longer. Most affected would be the
Jnited States, which buys about 900,000
bprrels a day, and Japan, which depen-
son Iranian crude for 20 per cent of its
RAN IS American's second biggest
si 'upplier, behind Saudi Arabia. In
;Washington administration anxieties
'.yer continuing unrest in Iran center on
he fear that if the shah were toppled, it
frtght lead to Soviet control over
pa4ssive petroleum resources, sources
-'iterviews with present and former
ipivernment officials indicate there is
still widespread .apprehension here
4- ut Soviet intentions in the area,
s ued largely on the Soviet occupation
Yp iorthern Iran in 1945-46 after World
In contrast to the casual U.S. attitude
toward unrest in other anti-communist
countries, such as Nicaragua, the ad-
ninistration has shown unwavering
$Upport for the Iranian monarchy. This
is consistent with the policy of every
administration dating to President
HOW TAX PLANS MAY AFFECT ANN ARBOR PROPERTY OWNERS
Husband 6 Wife
$3,000 Soc See.
Husband 6 Wife
Husband 6 Wife
Owner Major Apt.
Bldg. or Shopping Center
Property Tax Now $1,418 $1,418 $2,660 -0- $106,400
Income Tax Now (Including -$779 Property Tax $ 213 state $ 404 state $165 state -0-**
Property Tax Credit)* ' Credit
Total Taxes Now $639 $1,631 $3,064 $165 $106,400
Effect Under HEADLEE Limits Future Limits Future Limits Future Limits Future Limits Future
Proposal E Increases Increases Increases Increases Increases
Effect Under TISCH
New Property Tax - Tisch $782 $782 $1,465 -0- $58,620
(50% reduction other than Debt Service)
New 1% Increased State Income Tax $ -$ 63 Property Tax $875 $1,671 $462 -0-
1% Local School Tax (Including Credit
Property Tax Credit)
New Total Taxes - Tisch $719 $1,657 $3,136 $462 $58,620
Net Result - Tisch $80 increase $26 increase $72 increase $297 increase $47,780 reduction
Effect Under VOUCHER
Proposal H ------ -
N3gw erty Tax $ 705 $ 705 $1,321 -0- $52,800
0.3 3.70 operating mil lage=$35 .23)
New State Income Tax (Min. 7.14%)*** $ 36 $ 997 $1,906 $500 -0-
New Total Taxes - Voucher $ 741 $1,702 $3,227 $500 $52,800
Net Result - - - Voucher $ 102 increase $ 71 increase $ 163 increase $335 increase $53,600 reduction
either less frequentlyc
be asked to pay mor
according to Murray.
"I would insist that
make services availa
ability to pay," Murra
that any service rate
collection would be
everyone could afford
Both Murray and E
would allow no fundin
department. "We ser
bones operation rig
minimum amount o
should give them (ta
property tax," Murra
severely restricted be
support comes fromt
nment, Murray said.
Ann Arbor now re
per year in federal
funds and $2 million
Murray pointed out
comes to the city ba
formula of populatio
"So the more you c
payers), the more t
X nment will give yo
property taxes do.
Both Tisch and Hea
!m Page 1)
JP may be made surely prohibit street repairs and any
or taxpayers may other capital outlay that is not ab-
e for the service, solutely essential. That means the
street repair priorities for 1979 which
t City Council not Council approved Monday night would
able based on the be "purely theoretical," according to
ay said. He added Murray and Belcher.
hike for garbage THE HEADLEE plan requires that
low enough so voters approve any bonding project.
it. Belcher said that means new parking
Belcher said they structures can only be funded by self-
1g cuts for the fire generating bonds. Obtaining voter ap-
iously have a bare proval means a delay in construction,
ht now. It's the because Belcher and Murray both say
of protection we they would not spend $30,000 for a
xpayers) for that special election for bonding projects.
y said. Such delays will drive up construction
zS would not be costs because of inflation and timing on
ecause most of the contract bids.
the federal gover- Belcher said the delays would make
the process more costly and cumber-
ceives $1.5 million some at the beginning, until the city can
revenue sharing plan for the requirement.
n from the state. City Assessor Wayne Johnson, a
that the money Headlee advocate, terms the expanded
sed on a complex public role in bonding projects "a
on and tax effort. favorable restriction on local gover-
harge (local tax- nments,"
he federal gover- Both Headlee and'Tisch mandate that
u," Murray said. the state supply funds for any programs
aid may drop if it requires local governments to carry
out. That measure is the only "good
adlee would almost thing" Murray sees in the plans.
*The property tax credit, now in effect, would be reduced under the Tisch plan.
**Most owners of large real estate rental projects not subject to income taxes because of tax shelter, inherent in ownership of such properties.
***Estimated State income tax rate by the State Department of Management Bull et to offset property tax rezenue loss.
The above figures D0 NOT include increases in federal income taxes caused by lowered property taxdeductions, or increases in the Single Business Tax
for apartments and shopping centers.
Renters would be subject to substantial tax increases under Tisch 6 Voucher p oposals because of no property tax relief but increased income taxes
and reduced rental credit on state income taxes.
CITY ASSESSOR Wayne Johnson devised this chart to illustrate the possible effects the state tax proposals may hav
Ann Arbor property owners if any of them are passed next Tuesday. In deriving the figures for the Tisch proposal, John,
assumed the state legislature and the voters would approve a one per cent hike in the state income tAx.
Tisch plan were adopted, but not if the
Headlee proposal were passed.
"IF ' HEADLEE passes, there
probably will be very little impact for
at least five to ten years," he said.
"But if Tisch passes, that type of loss
would drastically reduce services in
fields such as education, police, and fire
The state is not obligated to help
localities fund fire and police services,
but it would have to keep the state's
schools running, Miller said. As much
as $1 billion might have to be trimmed
from other places in the state budget to
keep public schools operating at their
current levels, he added.
The passage of the Voucher Plan, ac-
cording to'some of its critics, would
cause even more havoc than the Tisch
proposal. Its advocates say that the
plan would help improve the quality of
the state's public schools by making
them compete with private ones.
Critics, though, complain that the
proposal is unworkable.
"It would be total chaos," said Al
Short, a lobbyist for the Michigan
Education Association (MEA) and the
coordinator of the group's anti-voucher
campaign. "It's a tremendous tax shift.
It would turn everything over to the
legislature, but there's no guarantee of
any funds or even how the system
would work. All we know for sure is that
to keep just the public schools where
they are now, the state would need $2.2
billion in the first year alone."
In the 18th century a good cow yielded
only four gallons of milk a day, whereas
now a good cow yields eight or nine
HARVARD BUSINESS SCHOOL
An Admissions Representative from
Harvard Graduate School of Business Administration
will be on campus
Thursday & Friday, November 9 & 10,
at the UNION
"It's like you left it!"
60C per game
to meet with students interested in
the two-year MBA Program
Career Planning and Placement Center
for more details and to sign up for
an information session.
Harvard Business School is committed to
the principle of equal educational opportunity
and evaluates candidates without regard to
race, sex, creed, national origin or handicap.
(Continued from Page 3)
student turnout for LSA-SG elections.
"I'm afradi we might fall back into
only 400 people voting," Spirnak said.
THE PROPOSAL contains a clause
allowing the council to call a new elec-
tion if more than one-third of the seats
become vacant during any term of of-
If approved, the amendment will per-
tain to the officers elected in the LSA
election scheduled for November 20 and
THE COUNCIL'S endorsement of
Samoff cited his contributions to
University and Ann Arbor affairs,
student opinion of Samoff as a
"superior teacher," and the
Distinguished Service Award Samoff
recently received from the University.
It mentioned that "the denial of tenure
to Marxist/progressive or non-
quantitatively oriented faculty is
becoming an increasingly frequent
national' trend that places educational
freedom and diversity in great
LSA-SG resolved to "strongly" urge
"the Political Science Department and
LSA Executive Committee (to) grant
tenure" to Samoff.
The council also placed an amen-
dment on the November ballot asking
for student consensus on a proposed in-
crease in the mandatory student fun-
ding of LSA-SG from fifty cents to one
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