In his latest installment on the financial meltdown of the Western democracies in the current edition of Vanity Fair, Michael Lewis points out how the State of California - which represents the 8th largest economy in the world - has managed to import all the economic woes of our European allies, and even add a few new ones.
This year California will spend $32 billion just on state payroll and pensions. That' up 65% over the past decade, while spending lags on areas such as higher education and health and human services. Indeed, in California, a prison guard who begins his career at 45 can retire with a pension almost equal to his salary - after just five years of service.
Before he left our fair city for the sunny climes of Florida, former Saginaw City Manager Reed Phillips and several other former city employees collected similar 'golden egg' pension plans.
And from a state perspective, the unfunded liability for the state's four major pensions -- schools, state employees, police, and judges -- is pegged at $11.6 billion, and the future health care liability ranges from $45-50 billion. Even if the state started meeting its obligations today, it would take $2 billion annually for the next 30 years just to get even.
And from a local perspective in this election year, these are the realities coming home to roost.
A former Saginaw County Board of Commissioner member, Jim Graham, had a favorite story. He was door knocking near Gratiot Avenue in southwest Saginaw during a campaign, and a constituent told him, "I don't live in the county. I live in the city."
Well, needless to say, Saginaw city dwellers indeed are part of the county. And on the Nov. 8th ballot, we have a countywide tax proposal and a city-only tax proposal.
The countywide proposal comes not from the courthouse, but from the Saginaw Intermediate School District (SISD), which oversees special education and other functions for Saginaw County's 13 local school districts.
Count 'em alphabetically: Birch Run, Bridgeport, Buena Vista, Chesaning, Carrollton, Frankenmuth, Freeland, Hemlock, Merrill, Saginaw City, Saginaw Township, St. Charles, Swan Valley. The proposal would add 1.4644 mills (apologies for the multiple digits; blame the old Headlee Amendment - we won't increase the headache by trying to explain it) to the existing 1.9417 mills for Special Education.
Okay, let's simplify. This involves adding something barely short of 1.5 mills to the existing 2 mills.
We should also explain Special Education. Children (and young adults through age 26) with major congenital disabilities attend the Millet Center out near Bridgeport. Special Education also has expanded to encompass home-district challenges such as autism and attention deficit. And so, believe it or not, about 1 in 5 students will receive some sort of special education.
Costs of Special Education vary widely, depending on the individual. A wheelchair-bound student at Millet obviously will require far more special attention than an ADHD pupil at a home district school. But when all the costs are added up, special education requires nearly twice the money as so-called regular education.
Michigan's funding formula does not take this difference fully into account, and so money is sapped from regular education in order to pay for the unfunded mandate of special education.
In Michigan new teachers make an average starting salary of $35,557 and an average overall salary of $54,739.00 according to teacherportal.com. The median salary of a Special Education teacher in Saginaw is $45,694, but those with higher credentials and seniority can earn as much as $65,251
The SISD millage proposal would help to more fully pay for Special Education, which in the process would also help to support regular education in each home district. A taxpayer in Frankenmuth, for instance, would be supporting Frankenmuth schools. Skeptics should not view this as some sort of lottery-style trick, or three-card monte. The ISD Board of Education and the superintendent, Richard Syrek (formerly a veteran at the helm of Swan Valley schools) have openly and honestly made clear their intent to help the local districts make ends meet.
How much would this tax increase cost you? Take your home's taxable value, which is half of the sale value, and for each $1,000 in SEV, add about $1.50 per year.
Tax Proposal for City Hall
The city-only tax proposal is for 1.1916 mills (or 1.2 mills rounded off) to renovate an aging 75-year-old City Hall is controversial, to say the least.
During a City Council planning session back at the turn of the millennium. Reed Phillips was the City Manager back in year 2000, and he described two facilities in need of major repairs. One was the Civic Center, which was transferred away from the City over to the County for the 0.45-mill tax, which since has been reduced to 0.25 mills. Meanwhile, City Hall's needs were postponed in favor of some semblance of maintaining police and fire funding.
Anyone who has visited City Hall has witnessed the room air conditioners during summer, and windows opened during winter because heat is not equally dispersed
Still, the City Council did not seem to devote a whole lot of in-depth study to this $7 million proposal (the entire three-part Civic Center was renovated for less than $14 million). Council members simply accepted the maximum study and decided, if we can do the job for less money, great, we will either reduce the bond issue or shorten the 16-year payoff. Scant attention was given to less costly options, such as moving into abandoned existing structures that are in better shape and require less investment.
Voters may wish to measure this factor and wait for an inevitable revised proposal that doesn't necessarily tear up the total innards of City Hall for a redo. Use of an alternative existing building might be considered, especially if the feds follow through on closing the main post office, which is right next door.
Also, the City Council will have at least three new members with the departures of Paul Virciglio, Amanda Kitterman-Miller and Bill Scharffe, and the trio of newcomers just might want to have some input.
How much would this first proposal for City Hall renovation cost? Add about $1.20 per year for each $1,000 of your home's taxable value.
Remembering Proposal A
Back in 1994 Michigan voters passed Proposal A, which slashed property taxes in favor of a two-penny boost in the sales tax. It seemed like a good deal back then. We saved about 30 mills in property taxes, or even more depending on the school district of our residences, and we really didn't notice the sales tax hike unless we were purchasing a big item such as a car.
Since then, we have been sort of nickel and dimed on the property taxes, even though they remain lower than the pre-1994 levies. City dwellers now pay a transit tax, a rubbish fee, a school facilities tax, and city and county public safety taxes.
We may ask will these millages ever end?
We should not blame our local leaders, be they SISD board members or City Council members. They are only striving to cope with federal and state cutbacks, along with the bad economy. And while we might wish to revisit the entire nature of taxation in this country and rethink it; the reality is that government needs to operate within its means the same way as the average citizen footing the bill needs to. In retrospect, it would have been a lot easier to be a public servant 40 years ago, when the auto plants were humming. But then again, we all seem to have had a much better time of it 40 years ago.
Of course, 40-years ago would we ever think that we would find a billionaire like Warren Buffett pleading with Congress to actually tax him more rather than shifting the burden to the average American? And of course, policies set in Washington all flow downhill, right to the local levels.
You the reader and citizen can decide for yourself. Please take the time to vote. It's a shame that we only have 20 percent participation, of sometimes worse, in these local elections.
State of Repair at Saginaw City Hall a Case of Neglect & Irresponsibility
Editor, the Review;
In 2001 the City of Saginaw paid $47,000 to fund a study to formulate a plan to fix City Hall. The cost to update City Hall at that time was $2.9 million dollars. No recommendations from the study were implemented to repair City Hall.
Our present City Council and City Manager Darnell Earley only want to point fingers at previous council members as to why nothing was done. Not even the leaky roof was replaced, which is fairly basic and fundamental.
Now fast forward to 2011 and the newest $50,000 study that tells us it will cost $7 million dollars to fix City Hall. The proper terminology for what has happened to City Hall is 'benign neglect.' Benign neglect is where you know you have problems that need fixing, but they are ignored. Money that should have been spent fixing City Hall was spent on other projects.
We as members of the Saginaw Landlords Association are not buying these 'sky is falling' cries of Darnell Earley. We say fix the building in steps just like you and I do when we need to fix our homes, businesses, or rental properties. Budget for a roof next year, windows the following year, etc.
In the past year two public safety millages were approved totaling 7.5 mills. Our solid waste rubbish bills went from $50.00 to $165.00 per home or rental unit. It's time to say enough is enough.
The economy is in shambles, record unemployment is rampant, and a million home foreclosures are projected for this year. Where does City Hall think its citizens will get the money to pay for 1.2 mills for 16 years to fix City Hall?
You got us into this mess and its time to stand up and say NO to this millage proposal on November 8th.
Saginaw Landlords Association Board Member