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Why Saginaw Needs to Keep The Tax Cap on May 3rd
and Reinvent City Government

By Robert E. Martin

        Supporters of the move to lift the Tax Cap in the City of Saginaw on May 3rd have focused their campaign upon the slogan: 'There is no option. Saginaw's future is in our hands.'
      

This alone should give you pause for imminent alarm because - less face it - there are always options, especially when it comes to funding government.
But the supporters of the lift would have you believe otherwise, apparently relying heavily upon that old P.T. Barnum maxim: 'Nobody ever lost money underestimating the intelligence of the American public."

My goal with this article is pose a corollary postulate: Nobody ever saved money overestimating the intelligence of special interest groups.  Especially, I might add, when they distort truth & reality through misrepresentation of the factsŠor perhaps, painting only 'part' of the picture is a more polite way to state it.

Over the past couple of weeks the 'No Option' campaign has been touted heavily in expensive brochures circulated & mailed door-to-door throughout the City of Saginaw, and is being promoted heavily by the 23 members of the Board of Directors of the Saginaw Chamber of Commerce (22 of whom live outside  the city); Saginaw Future, whose Director lives outside the city; and former City Managers that reside in Thomas Township & Florida, one of whom managed to author 15 books during his tenure as a full time employee of the city, and another who managed to negotiate the 'golden next egg' retirement plan configuration that is bankrupting our fair community.

I was walking around Frankenmuth the other day, enjoying the sunny bucolic setting, the clean streets, the horse drawn carriages, when suddenly it dawned on me - I didn't see any STARS buses taking people from Downtown Saginaw to Zehnders!  Nor, for that matter, did I see anybody from Frankenmuth dying to dine at The Rib Shack!

What is going on here?

Then it became crystal clear: it's much easier to advocate tax hikes in a troubled economy if you're picking the other guy's pocket.

So Frankenmuth, how would you like to kick in 3 extra mills so you too can enjoy the wonderful benefits of STARS?  Hell, in a few years we can possibly build a plexi-glass dome over Saginaw County, so we never have to worry about rain and can run tourist shuttles 365 days a year.
Imagine the possibilities!     

Oops, I forgot - there are 'no options'.

Facts 'n Figures

Unlike the sponsors seeking to lift the tax cap, I have lived in the City of Saginaw my entire life and have (arguably) been one of its key supporters.  My mother has her house in the City of Saginaw and The Review has been based in the City of Saginaw for 26 years.

If both of these tax cap proposals are approved on May 3rd, it will add an additional $350.00 per year to the owner of a $25,000 SEV property, using the actual figures posted on the City of Saginaw website.

For the owner of a $50,000 SEV property, the figure would double to an additional $700.00 per year.
But what supporters fail to figure into this mix is the recent approval of the STARS levy, which adds another 3 mills to the bill, adding another $75.00 per year to the owner of that $25,000 home, and another $150.00 per year to the owner of a $50,000 property.

And then lets not forget the recent School Bond millage, which tacks another 4 mills onto that figure, and suddenly you see that the owner of a $50,000 SEV property is paying $1050.00 more dollars a year in property taxes.

Ask yourself this: Can you afford to add $100.00 a month to your mortgage payment, especially if you are a (non-government) retiree living on a fixed income or a small business owner?

I suppose you can if you're living in Frankenmuth, but again - they won't be the ones paying the bill after May 3rd. 

And let's not forget all the other taxes citizens of this fair city shore upon their feeble shoulders - income tax rates that are the 3rd highest in the State of Michigan, special assessment taxes, the list goes on & on.
A significant part of the charm & viability of the City of Saginaw is that it has always been an affordable place to live comfortably and do business.

And make no mistake.  Come May 3rd if these proposals pass, you will see an exodus from the city limits unlike any in our history, especially from landlords (that own a majority of City Property) who have told me that if these proposals pass they will either sell, vacate, or move on.

As one landlord commented, "As it stands right now I need to be collecting $600.00 in rent to cover taxes, repairs, escrow, and make a minimal profit.  Who that is forced to live in the city can afford to pay that, and if you can, why would you in order to live in a marginal area?"

Harsh words? Perhaps. Of course the larger question is why our city leaders charged with protecting our assets have allowed core residential areas to deteriorate over the years; but that's another story for another time.

A Myriad of Myths
Supporters of lifting the tax caps argue that if they city of Saginaw is not able to maintain its current staff levels of police & firefighters, our insurance rating will change and rates will dramatically increase and also lower our property values.

Several insurance agents I spoke with (requesting to remain anonymous) have told me that whether the tax cap is lifted or not has no bearing on insurance rates.  "There is already a  $1,200 difference between the 48602 and 48603 zip-code area," he commented. "It all has to do with the number of claims being made. 

Given current population sizes, the City should be able to maintain its police & fire staffing without cutting deeper into the departments, as several council members have argued for years with block grant funding, but they always dump a large portion of the pot into non-essential city services."

Supporters of the lift also echo the sentiment that if people are not willing to invest in their community and pay for basic services, who will be willing to invest in homes & businesses in the area?

Guess what - we already do invest in those basic services, and as outlined last issue, the amount of revenue received by the city is nearly double what it received in 1979, plus 2.9 mills extra for garbage collection, and factoring in the state sales tax puts the total revenue well over $115 million dollars.

And threatening to cut police & fire more should these caps not be lifted is despicable, especially insofar as in the year 2002 the city budget shows $2,552,226 spent for 'informational services'.  I don't know what it is either, but in 1979 (the year the caps went into effect) there was no budget at all for information services.

In summation, the solution  comes down to money management, not more money and threats to cut essential services that taxpayers are already shelling out hard earned money for.

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