Originally Posted by
mam2009
From the CRC report: Therefore, unless state law is amended, the municipal income tax rates for residents and nonresidents will fall from 2.5% to 2.4% and from 1.25% to 1.2%, respectively, in July 2012.The rate reduction will be the first of its kind since 2003.This will cost Detroitabout $8.5 million in lost revenue on a full-year basis if the rates are not frozen at 2011 levels through a statutory intervention [[similar to what occurred in 2008 and 2009).
And guess what? I'm told the State has indicated its willingness to allow Detroit to freeze its tax rate [[the rate rollback would mean lost revenue for a City in a cash crisis) ONLY IF the City supports pending legislation in Lansing [[HB 5705) that would allow for a portion of the utility tax [[which, by State law, is currently only to be used to pay for Police) to be used to pay back bonds that would be floated by the proposed Public Lighting Authority [[HB 5688) for system upgrades.
If this is true [[& I've got it on good authority that it is), why wouldn't the tax rollback legislation [[SB 970) just be a given since we are a city in a cash crisis? Why does that even have to be a subject of negotiations? For some idea of the truth of that statement go to the Michigan Legisture website and do a search for those bills. You'll notice that the Public Lighting Authority bill was introduced on May 29, 2012 and passed by the House less than two weeks later, while Senate Bill 970 regarding the income tax rollback was introduced in February 2012 and hasn't even been analyzed or heard in Committee yet.
I hope some of you can see how it is that the City could be concerned that the State has a funny way of showing how much it wants to help Detroit. I'm not saying the Governor doesn't want to help Detroit, but he is certainly making the creation of an amicable partnership very difficult.