Water Street Millage: Unnecessary, Unwise, Unkind
Thank you for your interest in Stop City Increasing Taxes, or “SCIT.” SCIT is a community of friends and neighbors working to keep Ypsilanti vibrant, livable, and strong. As people living, working, and raising families in Ypsilanti, we are invested in this city, and want it to succeed.
This year, the Ypsilanti City Council proposed a new tax dedicated to the debt incurred for the failed development project called Water Street. The tax is for that purpose alone, not better infrastructure or services.
In 2007 and 2012, SCIT played a role in the resounding defeat of the City Income Tax and other tax increases that are similar to Water Street millage on the ballot August 2nd.
It is SCIT’s position that rejecting higher taxes is the best outcome for both the people of Ypsilanti, and the long-term viability of our city. SCIT recognizes the fiscal challenges faced by Ypsilanti, and that progress has been made. SCIT also believes that had we approved past taxes:
- We would not be enjoying the recent strong growth in property values and home equity; and
- City Leaders would have lost incentive to control costs.
High property taxes hurt communities in many ways, and the rate in Ypsilanti is among the highest. Ypsilanti ranks #7 statewide, placing it in the top 1.5%.
This rate has increased by 22% (10.65 mills) since 2007. That is $800 more per year, for a typical house with a taxable value of $75,000. To be clear: taxes in the last 9 years alone are $800 more per year, DESPITE DEFEATING the tax increases sought by the City.
Our goal should be to decrease that rate, not elevate it beyond already-elevated levels. Excessive taxes will precipitate a downward spiral of population and business flight.
Weighing the pros and cons, SCIT finds the proposed tax Unnecessary, Unwise, and Unkind.
It is unnecessary because tax revenues are increasing as property values increase. If the City continues to control costs, secure grants, and return unused city-held properties to the tax rolls, we can resolve the debt without additional burden on taxpayers.
City Leaders say they have “cut to the bone,” but still spend hundreds of thousands on non-essentials they find more interesting than basic infrastructure, services, and debt retirement.
This includes millions of dollars for a train platform; tax breaks to developers; a pedestrian bridge; unnecessary studies; and even a new walking trail on Water Street later deemed unsafe to use, due to soil contamination.
These are not the decisions of past City Leaders, but those serving now.
No, our challenge is not a revenue issue, but a priority issue.
The proposal is unwise, because high taxes degrade property values and therefore the long-term financial viability of the City.
Were the City to double taxes, no one would live here; property values would be zero, as would City revenue. There is an optimal balance between securing suitable revenue for City operations, but still allowing businesses and homeowners to build equity. As one of the highest-tax cities in Michigan, Ypsilanti is on the wrong side of that balance.
Draining savings and equity is a short-term fix, and disregards the positive relationship between reasonable taxation and home appreciation. SCIT is looking at the long term.
Certainly, there are things Ypsilanti could enjoy more of without the Water Street Fiasco. But the past is the past, and the wise policy now is to manage the fallout while keeping taxes competitive. This will enrich both the people and city of Ypsilanti.
Finally, this proposal is unkind. Higher property taxes disproportionately harm low- and moderate-income families.
Median household income in Ypsilanti is only $33,000. A loss of a few hundred dollars can cause financial hardship. Many lower-income families rent, and therefore pay regressive “non-homestead taxes” through their rent – almost 27% higher than homeowners for comparable housing. Higher taxes exacerbate this inequality.
In simple terms, rent can never be less than property taxes. As tax increases, so does rent. When taxes are high, landlords can also compensate by offering shabbier products; or just get out of the business entirely, which reduces the availability of affordable housing.
For the elderly, home equity can be a major portion of retirement assets. Higher taxes depress house prices – and therefore home equity – as buyers discount asking prices to compensate.
Please consider everyone in our community before voting to worsen a regressive tax that strains household finances and savings.
Despite challenges, the City of Ypsilanti is safer and sounder than ever. Home values are up, making it easier to finance college, home improvements, or even a well-deserved vacation. The City is slowly but surely resolving Water Street, through creative approaches to fiscal management. Together, let’s encourage continued creativity, and move forward in a responsible and sustainable manner.
Please vote “NO” on August 2.