Council Reconsiders PACE and Property Tax Tax

[XLFD]

If you believe that you're already paying too much for your property taxes or if you're just fiscally conservative and don't like the ideas of using your taxes to prop up government-favored businesses and other arbitrary agendas, you may want to set your calendar free for the evening of Monday, June 8th in order to bring some common sense to the Ludington City Council at their chambers in city hall.

PACE (Property Assessed Clean Energy)

The day before PACE came before the council for consideration, back on April 12th, we published an article, Let's Not Keep PACE, detailing precisely why PACE was not a good fit for Ludington, but only a good fit for those local business owners and developers who needed to extend (or overextend) their credit beyond what banks would allow, to the detriment of every other creditor and the general public.  After providing research and analysis and showing four major problems with the resolution to be considered we concluded:

"The City of Ludington would be well advised to not accept this additional risk, liability, and strain on city administrator resources in order to be a loan shark's enforcer, especially when there is nothing solid to be gained by the general public in the effort."

The next day would see several people come to the meeting and voice their concerns about the program and real pushback by Councilor Mike Shaw, prompting the council to take the resolution meant to adopt a PACE program off the agenda at the beginning of the meeting, but they did keep the hearing, which featured citizens totally against the measure.  Thus, even though there seemed to be a retreat by the council, the wary would be suspicious that the city would come back at some point to pass another PACE resolution and use this former hearing as one of their boxes already checked off.

That day has come.  At 6 PM on Monday the Ludington City Council in their chambers will once again consider the PACE program, without a public hearing, but you can still make your feelings known during the first public comment period.  If you're still under the delusion that the money leant out and effectively guaranteed by your tax dollars is going towards specific environmentally-friendly projects, most any sort of project can qualify, and neither you nor our city government have a say in the matter. 

Property Tax Administration "Tax" (PTAF)

We have fought this fight before back in 2019 and won, but now we are at a severe disadvantage because the current city administrator and treasurer are motivated to get it passed, have little regard for the public perceptions, and are not afraid to lie in selling this "tax" disguised as a fee.

Look at the deceptive FAQ sheet drafted by city administrators above (p. 161 of the packet).  The PTAF is a charge applied to your tax bill once they decide how much your overall property taxes are.  It is an additional 1% of that number.  When the state passed the law regarding PTAFs, they called it a fee, but later MI Supreme Court precedent would indicate that a PTAF as defined in statute is actually a "tax" and not a "fee".  

The court said fees must be imposed in connection with a voluntary service, where those intended to use and benefit from such service have some control over whether to use the service.  You cannot avoid having your taxes figured out if you decide not to pay the PTAF (aka PTAT), though I bet 100% of our readers would not mind having what they owed in property taxes ignored if they made it known they weren't going to pay the PTAF-- nor would the city allow you not to pay the PTAT without them keeping it onto your taxes owed bill.  Therefore, this is a 1% tax increase on all property owners, not a fee as law defines it.

The city has never collected any money through PTAFs before, so their statement "The city previously utilized this authorized tax administration" is false and meant to deceive the councilors and the public into believing they did and implies it might have been for a long time.  

Back on July 5th, 1983, Councilors Ted Weinert and Bob Eriksen heroically voted against adopting the PTAF starting with winter taxes, when it first came before the city council and six other councilors voted against it-- one day after Independence Day no less.  But a funny thing happened: the next meeting on July 18th had a reconsideration vote of the PTAT and these heroes were joined by four others and the PTAF was rejected 6-3 before it ever had a chance to take a dime.  

In late 2018, Interim City Manager Lyin' Steve Brock introduces a 2019 budget where it is assumed that a PTAF will be passed in 2019 to round out the new revenues, but once again a couple of heroes on the council come forth and recognize that voting for a new tax was bad for the people.  Councilors Angela Serna and David Bourgette make excellent points against considering the PTAT.  The Ludington Torch had earlier noted that the PTAT was showing up on summer tax bills and recognized that the council had never passed a necessary resolution to put it into effect, making it an illegal charge.  The council then recognized that they had dropped the ball and those who had already paid the PTAT got a refund.  The PTAF/PTAT has never been used in Ludington.

Thus, while the city did once utilize the PTAF, they did it without authorization, contrary to their statement in their FAQ sheet and this is not a reinstatement as they would like you to think-- it is a reminder that about seven years ago, city administrators tried to avoid going through council to raise your taxes.  

Presently, they seem to be intentionally distorting the record and the reality of the PTAF in order to get councilor support of it, and local media appear more than willing to help these rogue administrators.  The City of Ludington Daily News (COLDNews) appears to be their main propaganda mill as seen in this staff report article: 

"Another action item would authorize a property tax administration fee associated with the city’s proposed PACE program. The program would allow eligible property owners to finance renewable energy systems, energy-efficiency improvements, water-usage improvements and certain environmental hazard projects through owner-arranged financing secured through a special assessment. Program materials state the financing would be provided through private capital rather than city funding."

The PTAF is not at all associated with the PACE program, but with everyone's property tax bill, and the distortion of the PACE program in this one paragraph is immense, indicating that it's a tool for growth without any side effects or danger to the wielder or the public.  The reality is much different.  No other local media has yet to say anything about the PACE or PTAF, so up to this article, the local population has only been fed untrue propaganda saying that PTAFs will affect only those who take part with PACE and that PACE can be used only for green projects at no cost or risk to the taxpayers.

Fight, Fight, Fight

The people of Ludington and other interested parties need to fight back to put pressure on the councilors to vote against both the PTAF and PACE.  A reasonable person only needs a little common sense to see that the PTAF is just another tax by another name, so these councilors will know that they are passing a new tax onto the people, a tax that former councils of 42 years standing have not considered as a necessary infringement on our pocketbooks.  

They should also know by now that the only thing to be gained by passing the PACE resolution is a lot more work for city administrators and a new tool for local companies to overextend their credit and have you help them cover it should they not be able to meet their debts.  If nothing is done now, you can be assured that they will be coming back in a month to use a Truth in Taxation hearing to once again raise their millage rates as they have in the last three years, raising property taxes hundreds of thousands of dollars over the inflation rate each year by a simple vote just because Headlee rollbacks kick in.  

But who's kidding who, they will seek these tax hikes out and pass them regardless of whether we win Monday's battle or not, the question is will you still take up the war paint to preserve what is yours from their greed.