Faced with the news that the city of Ann
Arbor will have a $4.79 million deficit in the upcoming year, City
Council membres gathered this past Saturday to discuss possible
economic strategies to balance its budget. However, finding the
proper solution has proved an arduous task with few facile options
and voter support is needed is to pass any resolutions. The 2004-05
fiscal year — despite diminishing costs from cuts in the
workforce, — still looks troublesome as the city projects a
$2 million increase in health insurance costs and a $2.2 million
increase in payroll costs.
- Laura Wong
One of the options discussed among council members was an
increase of the property tax. According to City Administrator Roger
Fraser, the city could impose a 1-percent administrative surcharge
on all property taxes in addition to increasing the city’s
property tax to the maximum amount. A raise in the property tax
would have large repercussions for students and local businesses
alike. For students, the increased property tax would result in
higher housing fees. Many students who sublet their house or
apartment during the spring and summer terms may have difficulty
finding tenants who are willing to pay higher prices.
Local shops are continually going out of business as property
costs become too expensive. Decker Drugs, which closed last year,
is one such example of a trend that is infecting the character of
Ann Arbor. If a City Council-approved property tax hike goes into
effect, Ann Arbor could expect to see other local businesses
closing their doors to larger, national companies.
In their meeting, the City Council members also discussed ways
to reduce “core services” throughout Ann Arbor,
including decreasing garbage removal, leaf removal and busing
services. Fraser claims that Ann Arbor’s $400,000 leaf-
removal expenditure exceeds that of many local communities.
However, trimming costs on a relatively minor but necessary cost
seems to be an insignificant attempt to solve the problem.
Furthermore, while some may contest the true value of leaf removal,
the streets would be littered, narrowed and slippery, deterring
safe driving on two-way streets and parallel parking. Even more
detrimental would be a City Council-approved cut in bus service.
Buses provide essential needs to the city’s residents
bringing thousands of people to work everyday and joining the
community by means of transportation. If this cut went through as
passed, it would place a damper on what is not only a core service,
but also a core asset to Ann Arbor.
The final option presented to the council is an increase in
income taxes. This would most likely generate $1.2 million, if the
current operating millage of 6.03 is raised to the maximum amount
of 6.93 mills. This solution, while costly for Ann Arbor’s
citizens, proves the most viable option in an effort to raise
money, while maintaining the character and aesthetic beauty of Ann
Arbor. This is the only option controlled by voters, allowing
citizens a say in the final solution. Mayor John Hieftje rightly
noted, “We’ve gone a long way to become more efficient.
But we have tough choices.”