Sunday, October 10, 1971
THE MICHIGAN DAILY
Page Seven
Sunday, October 1 0, 971 THE MICHIGAN DAILY Page Seven
Income tax possible answer to city problems
(Continued from Page 1)
not commit himself to voting for
it. "It all depends on their rea-
sons," he says.
Basically, the Larcom report
says that there is presently a
gap of over $1.4 million between
the city's $11.7 million in rev-
enues and a "normal" $13.1 mil-
lion budget for 1971-72. The gap
is over $2 million between the
revenues and a "desirable"
$14.5 million budget for this
year.
The "normal growth budget,"
explains the report, encompass-
es funds needed to continue serv-
ices to the city on their 1970-71
levels, and takes into account
such things as inflation, popula-
tion change and wage increases.
The "desirable service level"
involves bringing certain depart-
ments n otably the police and
fire departments-up to national
standards, and updating other
departments.
The normal growth gap is ex-
pected to reach over $7 million
by 1976-77, according to the re-
port. The desirable service gap
will reach over $9 million by
that time.
According to Harris, the desir-
able figures would leave "no
room for new programs-drugs,
ecology, transportation, day ca e
centers - anything you care to
name, there's not enough
money."
However, Stephenson takes an
opposing view, advocating re-
duced spending in the city
budget. But he agrees that
"there are no other sources" of
revenue available outside of an
income tax.
On the other end of the po-
litical spectrum, Human Rights-
Radical Independent Party mem-
ber Dan Boothby disagrees with
the idea of a flat one per cent
icome tax. "The flat rate is far
from progressive," he says. "The
city should be lobbying for a
steeply progressive ta."
He also comments on the high
cost of living in Ann Arbor, say-
ing that "housing policies have
forced people out of Ann Arbor
who will now have to pay the
one-half per cent non residents'
tax. That's hardly fair."~
However, Boothby says that a
flat rate income tax would be
"somewhat less regressive" than
the present property millage in
Ann Arbor.
Butas Harsris himself admits,
For the student body:
LEVI'S
CORDUROY
Slim Fits ... $6.98
(All Colors)
Bells ...... $8.50
DENIM
Bush Jeans . $10.00
Bells ......$8.00
Boot Jeans $7.50
Pre-Shrunk . $7.50
Super Slims $7.00
State Street at Liberty
plans sometimes go wrong. For
it now appears possible that the
tax committee will only file an
interim report on their Nov. 1
deadline, and it is not at all clear
whether they will suggest the
income tax advocated by the
mayor.
In fact, Harris speculates, they
could ask that the city institute
a small, "stop-gap" income tax
now, and then ask for a larger
one within the year.
This would place the mayor
in the position of asking his con-
stituents to vote twice in one
year to levy taxes, and this
could be politically unsettling for
Harris.
There are only two feasible
dates for a city-wide referenda
on the subject, Harris says-
February and November, 19l72.
If Ann Arbor citizens approved
an income tax in February, the
city would get over $1 million in
taxes by July, 1972, the begin-
ning of the 1972-73 fiscal year.
However, if council waits until
the tax committee's final report
to vote on the income tax, it
could not go on the ballot until
November, 1972 and the money
would not become available un-
til July, 1973.
To complicate matters still
further, Ann Arbor citizens pass-
ed a City Charter amendment
in 1969 to the effect that, if the
city ever institutes an income
tax, there must be an accom-
panying drop of 7.5 mills ($7.50
for each $1,000 worth of assessed
property) on Ann Arbor's present
14.85 mill property tax.
With the 7.5 mill drop plus the
expected discontinuance of Ui-
versity funding of the city police
and fire departments, even the
one per cent income tax
"wouldn't get us past next year,"
Harris says.
It would take the removal of
the amendment calling for the
7.5 mill drop and a subsequent
retention of at least 5 mills to
add enough to the one per cent
tax to "support 1970-71 service
levels in 1972-73," according to
the Larcom report.
Another possibility is to change
the state law which places the
one per cent income tax ceiling.
A bill to change the one per cent
ceiling to a possible two per
cent is now before the state
Senate, having already passed
the House.
Another slight addition to Ann
Arbor's coffers may come from
state revenue sharing. This year,
Ann Arbor is receiving approx-
imately $266,000 in state reve-
nue-sharing funds, and the fig-
ure is expected to reach $WO,-
000 by next year.
F e d e r a l revenue - sharing
though still a remote possibility,
may also add funds to the Ann
Arbor budget one day.
The city is especially handi-
capped with only a" property tax
because the University, the
city's largest landowner, as a
state supported institution, holds
property tax-free.
Others, however, maintain
that the University more than
makes up for this by providing
Ann Arbor with employment op-
portunities and student consum-
ers.
Speaking on the necessity of
new revenue which an income
tax would provide, Harris quick-
ly runs down a list of over a
dozen departments where he
says the budget squeeze is tak-
ing its toll.
Among his examples are the
following
Police are getting "inadequate
overtime pay," he says. The ov-
ertime fund was cut from about
$270,000 in 1970 to $118,000 this
fiscal year. On the other hand,
calls for police service have
grown at an average rate of 10
per cent a year since 1963.
The fire department needs at
least two more substations, and
equipment needs to be replaced.
The building safety depart,
ment is also suffering, accord-
ing to Harris. "We're not going
to make the planned total in-
spection of every apartment
house every two years, and ev-
ery single-family house every
five years-there's no way."
Human resources are being
stunted by the crisis, Harris
adds. "We have $9,000 in metha-
done treatments, and $6,000 in
Ozone House (a center for run-
aways)-that's really a pitt-
ance."
The recreation programs have
been "cut back each year," he
maintains, especially the shade
elm tree planting and trimming
projects.
Harris also bemoans the loss
of city hall workers-although
there have been only three fir-
ings (and Harris says these jobs
will be restored), the city has
not had funds to hire new peo-
ple to fill vacated places. This
year about 50 of the city's 800
job slots are' unfilled.
"Decision-making is slower
and sloppier-you see it in the
quality of the decisions," Harris
says.
"Pretty soon, you'll have a
pretty scrummy (sic) town."
REPRESENTATIVES FROM
Wayne State Law School
will be on campus at the Student Activities Building
Monday, Oct. 1 to interview students, interested in
the study of low. Minority students and women are
urged to sign up. A woman's recruiter will be present
to answer specific questions concerning opportuni-
ties within the law. Contact the Career Placement
Office for further information.
i~i
N
III i
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