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]

Just be thankful Shay had no say in the design of the website, or it may have turned out much differently. Harrrrrrrr. I just wonder in who's lifetime the CC plans to spend that stockpile, and on what exactly? Clear and undeniable evidence that the Ludington people have been overtaxed for way toooooooooooooooo long already now.

[XLFD]

It was truly weird that the city leaders thought they had the power to raise taxes already at their maximum rate (due to Headlee) just by holding a "Truth in Taxation" public hearing. TIT hearings would be more appropo for the "municipal services fee" levied against the residents of Longfellow Towers, not to establish a higher millage rate than the law allows. Only the people can agree to that. I looked through Google News and there was no other instance I saw of a Michigan city raising its millage rate higher than the Headlee allows, without a vote of the people affected by the increase. For example:

4-11-2010: HometownLife.com: Beverly Hills (MI) officials are considering whether to place a 3.53-mill increase on the November ballot to help fund public safety and library services. The tax request comes two years after the village rejected a Headlee Override in 2008 by a margin of almost 2-1. Hoping for a different outcome this time around, the council formed three ad hoc committees designed to gather pertinent information that might prove useful prior to the election.

4-15-10: Journalgroup.com: Voters in the City of Wayne will be asked to weigh in on Proposal 2, a Headlee Amendment Override that will essentially reset the tax levy to 15 mills-a .4365 increase.

4-7-10: Spinalcolumnonline.com: "My hope is to get them (the ballot renewals) on the August primary ballot," said Zoner. "It would save us a lot of money by not having a special election in 2011 to have it passed."
Zoner said the township would be seeking re-authorization to renew the millage "at wherever Headlee (Amendment for property taxes) has it at. It would likely be at the same level for fire, and we would be able to override Headlee and request .7 mills."

3-23-10: Thenewsherald.com: Rockwood- After weeks of discussion about placing a Headlee Amendment override on a May 4 ballot, the City Council has decided not to pursue the proposal.
The state Headlee Amendment was passed in 1978. It prohibits municipalities from increasing taxes without a vote of the people. It also limits tax increases to 5 percent annually or the rate of inflation, whichever is lower.

10-28-09: Kalamazoonews.com: Constantine: The district will turn to voters Tuesday in hopes of approving an override of the Headlee rollback, which would restore the full 18 mills the 1,507-student district would like to levy.

3-3-10: Ironwoodinfo.com: Ironwood- GOISD asks voters to approve a Headlee override to restore to the district the 3.3 millage already approved by voters.

11-2-09: Recordeagle.com: Traverse City- Voters also will choose whether to approve an additional operating millage request for a Headlee override at 2.5 mills for five years

4-12-10: Theoaklandpress.com: • Voters in Lathrup Village will be asked to approve a Headlee Override to levy up to 20 mills in city property taxes, up from the current 16.0881-mill rate.

3-24-10: themacombdaily: Eastpointe- However, they do plan to ask voters to approve an override of the Headlee amendment, which would raise the general fund tax levy from 12.17 mills to 15 mills, or an additional $1.6 million.

[AQUAMAN]

Greedy money hungry thieves in government are alive and well all over Michigan these days eh? X, the way I read the CC mtg. on this was if noone showed at all for Shay's TIT mtg. during the 7/13/09 council mtg., then they would have levied anything they wanted without any voter approval. Can they do that? Also, by passing the police pension increases without a ballot approval, did they already overstep their authority and break the HA Law? I thought it strange and out of order to begin with that a TIT mtg. was announced only a short few days beforehand, plus it should have been a mtg. unto itself, not at a CC mtg.. Are there any requirements for a notice to the public, say 30 days in advance? Methinks they pulled another quicky on John Q. here, and nearly got away with it again. Who's reading and keeping up on all the CC and City's affairs in the heat of mid-summer, when time is so short for all the summer activities, vacations, visitors, and such that have families occupied? Actually, I just got lucky and stumbled on it last minute too, by coiincidence and accident, and almost fell out of my chair when I gasped at the announcement.

[AQUAMAN]

I would further contend that councilor Holman and Scott make foolish and in-your-face statements when it comes to Ludington's John Q. Public too. Their agenda timing on these type important matters always seems to come at mid-summer, blizzard days, or Holidays, when 99% of the people aren't looking at local news or for ambushes by their local government. Furthermore, it is my understanding, after talking with Holman and others on the budget/finances committee, that they are nitpicking at foolishly small items to reduce, what would in lamans terms amount to the purchase of paper and paperclips, not the meat and gravy in the budget at all. This all makes a tremendous amount of difference when you are talking about a $2Million budget methinks.

[XLFD]

And just six weeks after this the council approves the spending of over $800,000 in public monies to 'improve' the city marina with new transient docks. Newsflash: they weren't filling their boatslips before over the last two years. Why build it now? Noone was really asking that question back in late 2009, when several city workers were laid off and lifeguard service was cut.

[XLFD]

The Mi Dept of Treasury has the following form for truth in taxation for local governments to more easily comply with the law.
Truth in Taxation.pdf

This refers to two other laws, namely:
Michigan Legislature - Section 141_436.mht
Michigan Legislature - Section 211_24e.mht

[XLFD]

Read section 6 in the first law to find that statutory limits cannot be ignored in a TIT hearing.

Read section 10 of the second law saying effectively the same thing.

The Headlee Amendment sets that limit, and the Police Pension and DDA millages were raised contrary to those maximum limits. You wasted a nice summer's night arguing a moot point with a bunch of law-defying rogues, when you should have been enjoying yourself. Better to wait for a cold, blustery November Tuesday to vote 'no' in a warm, private voting booth.

[AQUAMAN]

It would be interesting to see if the adv. for TIT did in fact come at least 6 days prior to the mtg. and more importantly, if the adv. was up to the specs. for size, 12 pt. high, 18 pt header, and not less that 4 pt width too. I don't remember that it was that big an adv. but it could have. Yeah, for sure people were out enjoying that evening at the dairy queen, bbq, state park, or fishing like normal summer nites with beautiful sunsets you can't enjoy other times of year.

[XLFD]

The Ludington City Council is illegally planning to raise your millage rates once again(LDN, 6-26-10). Just in case you need some ammunition to present before the council, reread this thread, the various news stories about how millages are supposed to be raised, and go to the next couple of meetings to voice your grievances. Me, I'm notifying the State Attorney General's office, and other agencies to stop this money grab by the greedy local politicians. Something I wasn't able to do last time when they sneaked it by us and told us they had that authority.

[AQUAMAN]

Looks like my old April message is still in effect, to wit, do this dirty stuff when people are too busy enjoying the few days of summer we have, on vacation, or in blizzard conditions when people cannot attend. Good ole boys like Shay at it again!