Whose Money is It Anyway?

[XLFD]

Now that Tax Day is behind us, and many of you have revolted in your own way about being taxed enough already, here is an article about our local Ludington government disregarding tax law from the Michigan Constitution placed there by the people of Michigan.

 

The Headlee Amendment, passed by Michigan voters back in 1978, was added to the Michigan Constitution.  Section 31 of Article IX requires a rollback in local authorized millage rates if the local tax base increases more than inflation.  A millage rate (MR) is the amount of tax per thousand dollars of the taxable value of property. 

 

If the assessed value of a local government’s total taxable property, excluding new construction and improvements, increases by more than the inflation rate, the maximum authorized property tax rate (MR) must be reduced so that the local’s total taxable property yields the same gross revenue, adjusted for inflation, as collected on it at its prior assessed value.  Exhale.  Let’s look at a ‘simple’ example, then some concrete, meaningful numbers that apply to Ludington.

 

If the Taxable Value (TV) of an area is $100 million with a MR of 10.0 (bringing in $1,000,000 in taxes), then if the TV increases to $110 million the next year, but there was no inflation, then the MR must be reduced to 9.09, so that once again $1,000,000 is brought in.

 

The TV of all property in Ludington was assessed at $273.1 million in 2009 up from $266.8 million from 2008.  This is about a 2.3% increase during a period when inflation was under 1%.  As the assessed values were greater than the rate of inflation, millage rates had to be rolled back. 

For taxpayers this makes good sense.  If your city’s assessor decides to jump up everyone’s assessed property values more than they should when actual values are decreasing or stagnant, you should have some protection from their action.

 

  In 2009, the Ludington City Council had a public hearing on July 13 after notifying the public they wanted to override Headlee rollbacks for 4 millages: the operating, garbage, police pension, and DDA millages.  They approved the latter two, after hearing four members of the public clearly and unanimously voice their disapproval of raising any of them.  The public had spoken, and they half-listened.

 

Understand, even with the Headlee rollbacks, the city budget would still increase at the rate of inflation, but not by the overinflated assessment rate.  Doesn’t this seem fair?  Here is the comments of the City leaders as they pondered whether they should override these cuts, courtesy of the City Clerk:

 

1)  “His Honor Mayor Henderson stated that there are a couple of provisions which bother him. One, the City should roll back if they could but when they are facing a tough budget year, it becomes very hard to work if the tax is lost for good. The City has tried all kinds of tax abatements, OPRA, rehab districts, enterprise zones, blighted property, etc. to be competitive with the other communities out there.”

 

2)  “Councilor Holman has agonized over these ordinances because of the timing, not one single person in the City has called her about these millage rates. She explained that the City has been working on a budget for next year, and the $50,000 is a lot of money. However, the City Manager and the employees have to work on the budget and services may be cut. She sympathized with the public and apologized for the way the State is run. The City runs on its money and we do spend some money foolishly, but she emphasized that she nitpicks over expenses.”

 

3)  "His Honor Mayor Henderson stated that he thinks Headlee in the way it is being applied is so wrong and that it is not up to the City, but he as a citizen has voiced this to his legislative representatives and he is asking the public to also voice their concerns. This is not a fair tax.” 

 

4)  “Councilor Scott stated that he believes that the residents in the community should pay better attention to what the Council is proposing… It is difficult to determine what the City residents want and he is asking for input from the residents. The community has a responsibility as well as the Council.”

 

5)  “Councilor Holman asked if the City voted this millage down then we could never raise the taxes (sic) up again without a vote of the people. This was confirmed by City Manager Shay.”

 

6)  “His Honor Mayor Henderson asked if once you roll back the millage you will never be able to increase it. City Manager Shay confirmed this and added that the millage would not increase unless there was a vote of the people.”

 

Terrible thing, that "vote of the people".  Actually, contrary to what the City Council would have you believe, they did not have the authority to vote to keep the police pension or DDA millage rates at their old rate—that authority rested with the vote of the people of the city of Ludington as per the Michigan Constitution, Article IX, Section 25 and 31 (see below).  Instead of placing it on the ballot last November, they decided to ‘override’ the will of the people, and the law. 

 

Is this an acceptable way to run a city?  Please feel free to comment also on the comments of the councilors and mayor.

[AQUAMAN]

I for one was one of four whom went to the Council Mtg. just for that purpose. Only four of us showed up, all businessmen of the community. They really didn't want us to win half the override at all, but did it with tongue-in-cheek to appease us/meida for the moment. Kaye Holman did ask, where's the other 7,000 citizens here?, since only four people showed up. I thought her remark rude and condescending at best. She herself ran for office after witnessing several atrocities in the CC years ago. Now she seems enamoured with being another one of the good old boys network, must be the power surge in her veins that prompts this conduct. SInce the police pension fund was the lesser valued of the two evils, noone objected further. The gall of CM Shay to get this Headlee Amendment overrode in Ludington, was an insult and show of tyranny in taxation imho. And that he and the CC will stop and nothing, legal or not, to get their agenda on line and in the faces of taxpayers, if they so desire. Notice the meeting came 7/13/09, the very busiest time of summer for residents that would have attended, but had other priorities, and didn't want that upset in their agenda at that time of year. Coiincidence, or just planned strategy? You decide! Btw, Henderson's quoted comments here should be a wake up call to all that question his true motives. The LAST THING that governing council wants on Any subject of Taxation and their planned Agenda is for the Taxpayers to have any VOTE ON IT! That just won't do, not in Ludville! They are going to ramrod anything they want down the taxpayers throats, just as they have for many a decade, without even looking back.

[XLFD]

The Clerk's minutes did not include that remark by Holman, although she made some sort of statement that nobody in the city had given her a call about this. Didn't you try to call her about the lifeguards Aq, and find that the number was no longer in service? It did include your sage statements and the three other businessmen who came out to oppose any increases. All were well spoken and made a helluva lot more sense than anything the above officers said.

The first comment by our Honorable Mayor Henderson (#3) above showed either ignorance of the Headlee Amendment, which he equated to an onerous 'tax' on the people (it is more of a tax on the government!), or contempt for the taxpaying public. He asked for the public to voice its concerns-- but the public had voiced its concerns there before him that night and they unanimously refuted his statements.

[XLFD]

Aquaman, you were witness that day to our city council, city attorney, and city manager violating the State Constitution of Michigan by overriding the mandated Headlee millage rate cuts without a vote of the people of Ludington. I researched recent attempts to override Headlee rollbacks by Michigan cities, and in every case, the local governments put it up on the ballot for the will of the people. Here are three recent news stories reinforcing the claim I made on tax day:

Study on Muskegon County operations calls for money saving operatio...

[XLFD]

Just in case you can't access them or find the relevant data from each of the 3 sites i cited, here is a sentence or two from each article explaining the process:

"• Raising revenues through a Headlee Amendment override vote or other areas that involve asking voters to allow the county to recapture some rolled-back millage rates."

"Residents there will be asked to approve two tax increases: a five-year 1-mill levy to help fund police and fire services and a Headlee Override that will bring in an additional .4635 mills."

"Because the 1978 Headlee Amendment limits property tax increases, Lathrup Village plans to ask voters May 4 to approve a Headlee override."

[AQUAMAN]

I believe what Shay was having during the CC mtg., was a "fairness or truth in taxation meeting" open to the public. The way I took it at the end, was that us four guys were deciding the fate of both proposals. What they did do is like extortion, for lack of a better word. We were told they would table the main big tax increase to the business and homeowners downtown, if we let them vote in the police pension fund, being that was pennies on the dollar. So, we opted out for the lesser of two evils, for that given moment. Didn't seem right to me we had to choose at all, because we were all dead set against any tax increase, but that was the end result. Not so sure that is even legal, but, it was that or nothing it seemed at the time. What's the take on the minutes of the mtg. on that? Or is that deleted too? Thanks. P.S. I can still see a couple of the retired cops and Shay sitting there with huge grins, like cheshire cats that just ate the mouse. That's how huge an ego that council has against the people.

[XLFD]

The minutes reflect that the Police Pension and the DDA millage rates were unlawfully raised from the Headlee Amendment mandated rates, because it was done without a vote of the people. Fairness and truth had no seat at the table, except for the Ludington citizens who spoke out at the meeting.

How arrogant it is when these folks decide whether to raise your taxes in direct defiance of the law. Not a single non-government official/employee was for any of these tax raises publicly. Henderson and Holman made derogatory references to the Headlee because it robbed them of more taxpayer money for them to distribute. Apparently, an unneeded transient dock worth over $800,000 to construct was more important. Here's the full cc minutes of that day:

[Mary A.]

Thanks for the link. Are the minutes posted online each month, X? I would like to read these regularly.

[AQUAMAN]

I would too, your orig. link I kept, but it wouldn't update, what do I do, go back to it anew again for the current situations? Sounds funny, but it's true, the CC will be discussing a subject, or a person from the audience will, and all of a sudden, the mayor or another CC member will raise their hand and tell Deb Luskin to stop the transcript. It keeps alot of info. out that should be in to get the whole story right, just like they want it. Methinks that bespeaks of raw dishonesty in media and transcripting. Additionally and lastly, the CC plays strange and very dishonest games whenever it suits their agenda. They are not nearly broke, poverty ridden, in bonding debt, nothing. They have ooooodles and piles of hidden reserves in cd's that they are hoarding and not admitting too. Yet, I have trial balance figures that show $6.8 Million is invested at low interest rates and another $900K is in the general fund reserve, just for the taking for any and all expenditures. What on God's green earth do they plan to do with that stockpile of taxed funds that sit and sit for a rainy day that never comes?

[Mary A.]

I don't know, but after living through the Kwame Kilpatrick, Detroit City Council and Detroit Public Schools debacles in the once great Motor City for the past several years, nothing would surprise me anymore.

[AQUAMAN]

It's a shame, here's the important question of our day: if we cannot control honesty and good governing in a small Ludville town of 8,000 citizens, & a small 25,000 population of Mason County, how do we ever expect it in Lansing and DC? Methinks this is why we have the apathy in so great numbers in the country, and about 65% of the eligible voters not voting anymore. Can we blame them? Btw, I see the 57 replied to Oakes thread is closed now, just when it might get interesting, or not? Thanks.

[XLFD]

Interesting points Aq. Capital programs do need some money in the bank, but is there too much there-- after all, besides interest, it was all once taxpayer money unallotted to any immediate purpose.

Also, the transcript note interested me. You were there, did they do the transcript- mumbo-jumbo at the 7-13-09 meeting for any reasons?

[XLFD]

Mary, Aq, and all others,

The City of Ludington website has developed into a very good site to access much of what you need to keep up with the City of Ludington. A couple of years ago, it was mostly under construction, but now you can get the minutes of most board meetings, City Council meetings, assessor records, etc. Here's the link to the City Clerk's page, where you can find the budget and cc minutes since 2008, including the most recent meeting (seven days after it was held).

Navigate through the whole system and you may be impressed by the stuff you can access. Yes, you heard right, this is XLFD actually complimenting the Ludington City Government.