By Tim O’Brien
The
Allen Park Emergency Manager
recently
released a video of FAQ’s to
answer
some “Frequently Asked
Questions”
about the 6¾ mill tax increase
she has
placed on the August 6th ballot.
State
law does not permit public officials
to use
tax money to advocate a tax
increase
so the questions and answers
were
carefully selected.
But before you vote on August 6th you should also consider the Frequently
Avoided Questions
Q. How much will this millage cost the average Allen
Park
homeowner?
A. As our Emergency Manager says: 74¢ a day. But
thinking
of it as “less than the cost of a cup of coffee
or a
soft drink” is, ironically, exactly what financial
planners
warn people against doing! This tax increase
will
cost the average homeowner $270 per year —
$2700
over the ten years it will last. Or to put it in the
most
familiar context, an additional $22.50 a month
into
mortgage escrow for the next decade. Assuming,
of
course, a house with an SEV of $40,000.
Q. Will this millage go exclusively to providing police and
fire
services?
A. That is a meaningless distinction. The city has only
two
checkbooks -- one for water and sewerage and
the
other for everything else. The basis of the claim is
that
since 6¾ mills will generate almost $5 million in
annual
revenue while expenditures for public safety
are more
than twice that amount, it can be said that
the
money raised is being spent there. That, of
course,
frees up $5 million that went for police and
fire
services last year to be spent on other things. It's
the same
shell game that was played on voters years
ago when
they approved a state lottery on the promise
that the
revenue generated would go to education.
Money is
what economists call a "fungible
commodity.”
Just as one glass of punch is like every
other
one dipped from the same punchbowl, one
dollar
is just like every other one taken from the same
general
fund. There is no way to ‘earmark’ it.
Q. Have residential property taxes really decreased 28%
in the
last five years?
A. That's difficult to answer without knowing how the
calculations
were made. But what does it matter to
individual
homeowners in any case? The important
question
is: Has your property tax bill decreased 28%
in the
last five years?
Q. Are home values predicted to continue to decline?
A. Not unless recent trends suddenly reverse and values
start
down again. The Zillow real estate website
shows
current Year-over-Year selling prices for
homes in
Allen Park at +12.4%. The Trulia website
puts the
Y-o-Y number at +17.7%
Q. If this millage passes, will no additional tax increase
requests
be made? Also, if fiscal stability is restored,
might
this increase even be rolled back?
A. Both are speculations, not commitments. There is
nothing
in the proposal that even hints at either one.
Q. If this millage proposal fails, what changes in city
services
can residents expect as a result of the fallback
"Plan
B"?
A. That's impossible to say. However, whether or not the
dire
predictions are a 'scare tactic’ as some have said,
consider
the warnings from public officials before the
last
proposed millage increase — that if it did not
pass,
the city's recreation center would close. The
millage
failed. Stop by the rec center and interrupt all
the
activities there to ask if it’s closed.
Q. Isn't that because operation of the rec center was
given
over to a private company?
A. Indeed. And that certainly suggests what will actually
happen
if this millage fails. At the top of the list of
services
ripe for turning over to a private provider is
EMS. In
this era of fireproof everything and smoke
detectors
in every building the function of the fire
department
has become primarily providing an
ambulance
service. This doesn’t require a full-time
staff of
28 and such expensive equipment as, for
example,
our 100-foot ladder truck. (In fact there is
the only
one building in the entire city tall enough
where
this specialized vehicle could ever even
possibly
be needed -- which is probably why the only
action
the truck has ever seen is in parades.)
Q. What has been done to reduce the $3 million per year
cost of
providing health insurance for the city's 220
retirees?
A. Nothing yet. However, beginning in the new fiscal
year
prescription co-pays will be increased to $10 for
generic
drugs, $20 for preferred brand name drugs
and $30
for all others — from long-standing co-pays
of $1,
$2 and $5 respectively. In addition both
current
and reired employees will begin paying 20%
of the
premium for their health insurance plans (that,
incidentally,
will provide coverage that — like the copays
— will
be closer to what most taxpayers have.)
Q. Have current employees been switched over from
"Defined
Benefit" pensions to 401(k) type "Defined
Contribution"
pensions?
A. No. And even though this — along with the goldplated
health
insurance plans — is what bankrupted
two of
the Big Three, it isn't clear how or when the
transition
even can be made. Although government
employees
— city and county, along with teachers —
are the
only workers who still have this open-ended
benefit,
ever increasing life-spans have made the cost
of
funding it so enormous that the system cannot
afford
to allow current employees to rto redirect
retirement
savings into their own 401(k) accounts.
The
contributions they make under the current
system
are essential to continue paying benefits to
retirees.
Q. Hasn’t anything been cut from this year’s budget?
A. Yes. Pay for the mayor and council was cut by 50%
for an
annualized savings of $24,000 and curbside
pick-up
was transferred from DPS to trash contractor
Republic
Services for an additional $200,000 per year.
A.
Q. Do appointed city employees really get 90 days of
annual
sick leave?
A. Yes. Though that three months of sick time per year
will be
changed to 12 days per year beginning with
the next
fiscal year.
Q. Has the pension "spiking" been stopped?
A. No. Though this is something else that is scheduled
to be
eliminated next fiscal year. In the meantime,
however,
at least three — and perhaps more — city
employees
will be using the (borderline fraudulent)
tactic
of banking all of their vacation, comp time and
unused
sick days to and converting them into cash to
enhance
their last year's salary. The 2.9 pension
multiplier
is then applied to this artificially inflated
pay
scale to calculate their retirement benefit — a
“spiked”
amount they will then draw for the rest of
their
lives.
Q. 2.9 multiplier? Isn't that higher than average?
A. Higher than average? It is the highest in the entire
state!
It is double the typical 1.25 to 1.5 range.
Adjusting
it down to 2.25 is another change to begin
next
year. Strangely, this is still 50% higher than the
1.5
pension multiplier that is part of Governor
Snyder’s
“Best Practices” program for local
governments.
Perhaps we can get our EM to confer
on this
with the person who appointed her.
The Bottom Line
Our
experience with an Emergency Manager makes you wonder why people were so
worried about giving an unelected official so much power. The Allen Park E.M.
has done almost nothing to address our structural deficit. No property sold. No
bonds renegotiated. No consolidation of services with other cities. No staff
reductions. Not one provision of one labor contract has been revised. The only
substantial steps she has taken is to borrow another $2 million, and
then put a proposal on the ballot to raise taxes by $5 million a year for the
next decade.
They will only raise our taxes as a first resort!I
I
need both the funding and some
volunteer help to do the lit drop the week before the election.
Any
help you can offer -- or point me to -- with either or both will be greatly
appreciated.
313-359-7820
Small Government Committee _ PO
Box 118 _ Allen Park, Michigan _ 48101They
