Allow Detroit to keep a tool to help itself

BY JEFF GERRITT

DETROIT FREE PRESS COLUMNIST


It’s crazy, but bills that would only allow Detroiters to continue to tax themselves at a higher rate have jacked up more Detroit bashing. One blogger — incredibly called “truthseeker”— compared the legislation to welfare and crack. Gimmeabreak. This law wouldn’t cost anyone anything, except those of us who live in Detroit. One reason it’s needed to keep Detroit solvent is the state’s broken promises. An earlier plan to phase out Detroit’s income tax was based on assurances from the state that revenue sharing would be protected. What a joke.

The state long ago reneged on its 1998 deal to freeze Detroit’s slice of revenue sharing at $333.9 million until 2007. Instead, the state cut revenue sharing, to Detroit and other Michigan cities, by more than $3 billion over the last decade. By 2007, Detroit was getting only $275 million. Since then, the amount has dwindled to $179 million. Revenue sharing is no handout. It’s money communities send to Lansing that the state promised to return.


Continued at: http://www.freep.com/article/20110512/BLOG2505/110512022/Jeff-Gerritt-Allow-Detroit-keep-tool-help-itself-?odyssey=nav|head

It's a little more complicated that this.

Much of this revenue generation is from non-Detroiters who have no say in the situation. The commuter tax is viewed by many as unfair, and is a huge revenue source for Detroit.

And the Detroit income tax isn't paid by most Detroit households, so it isn't shocking that it's popular among Detroiters. I would guess most Detroit households pay close to nothing in federal-state-city income taxes, and many receive a sizable net refund.

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Originally Posted by Bham1982

And the Detroit income tax isn't paid by most Detroit households, so it isn't shocking that it's popular among Detroiters. I would guess most Detroit households pay close to nothing in federal-state-city income taxes, and many receive a sizable net refund.

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Are you sure about that? Detroit income tax has no standard deduction and an exemption of $600/person. It is pretty hard not to owe tax unless you don't have any income. Do most Detroit households really have no earned income?

I didn't know it was a $600 exemption; I thought it was higher.

But I still think most city households aren't paying income tax, given that public assistance, pensions and unemployment aren't taxed, and that Detroit household sizes are unusually large and household incomes are unusually low.

And Detroit has extremely low workforce participation rates.

When income goes down, revenue goes down. To maintain the same level of services, something's gotta give. Tax hikes are the most obvious answer. We all got sold a bill of goods by good old Ronald Reagan, that we could have it all and never have to pay for it. Wake up, folks, the piper must be paid. If the service levels can be made more efficient and less costly, that is one place to look, but ultimately, there will still have to be some level of revenue to pay for what is basic.

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Originally Posted by Bham1982

I didn't know it was a $600 exemption; I thought it was higher.

But I still think most city households aren't paying income tax, given that public assistance, pensions and unemployment aren't taxed, and that Detroit household sizes are unusually large and household incomes are unusually low.

And Detroit has extremely low workforce participation rates.

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Here you go again, with more of your ongoing "Detroiters just sit around on their asses and the city wouldn't even exist but for the good graces of altruistic suburbanites" diatribe.

You seriously aren't claiming that the vast majority of Detroiters don't have jobs and incomes and tax bills, are you??? Statistics, please. Otherwise, one might think you're just making shit up.

As someone who works in Detroit but lives elsewhere for family reasons, I have no problem with paying tax for city services. And anyone who does have a problem with it should quit his/her damn job in the city and find one someplace else.

People who bitch about taxes have no idea how historically low taxes actually are these days.

The high cost of this "tool" is one more reason people are fleeing to the suburbs and out of state. The high tax rates continue to be another reason businesses and people won't move into the city. The state lagislature ought to do Detroit a favor and force it to lower it's tax rates.

Why do you think the city has to dish out brownfeild, historic, NEZ and OPRA tax breaks to help[ get people to move into the city? If the tax rates made sense none of this would be needed.

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Originally Posted by ndavies

The high cost of this "tool" is one more reason people are fleeing to the suburbs and out of state. The high taxes rates continue to be another reason businesses and people not moving into the city. The state lagislature ought to do Detroit a favor and force it to lower it's tax rates.

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Yeah, that whole 1% [[for corporations) and 2.5% [[for resident individuals)...what a bitch.

You want to lower tax rates in the City of Detroit? Adopt a metropolitan government to spread the cost of social services, re-establish Detroit's share of state revenue sharing, or some combination of the above.

And when you lump that 2.5% on top of the 4.35% state income tax, well that's a sky-high 6.85%. That's lower than the top marginal income tax rate in "overtaxed" states such as Arkansas [[7.0%), Delaware [[6.95%), Idaho [[7.8%), Iowa [[8.98%), Maine [[8.5%), Minnesota [[7.85%), Montana [[6.9%), North Carolina [[7.75%), South Carolina [[7.0%), Vermont [[8.95%) and Wisconsin [[7.75%).

So what was that about high taxes discouraging growth?

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Originally Posted by ghettopalmetto

Yeah, that whole 1% [[for corporations) and 2.5% [[for resident individuals)...what a bitch.

You want to lower tax rates in the City of Detroit? Adopt a metropolitan government to spread the cost of social services, re-establish Detroit's share of state revenue sharing, or some combination of the above.

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how about before we go pillaging the neighbors, perhaps deal with the incompetents and thieves that run the city? Start with Anthony Adams... and continue through the alphabet of buffoons that pop up time and time again when multiple millions disappear down a rabbit hole.

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Originally Posted by bailey

how about before we go pillaging the neighbors, perhaps deal with the incompetents and thieves that run the city? Start with Anthony Adams... and continue through the alphabet of buffoons that pop up time and time again when multiple millions disappear down a rabbit hole.

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How about when suburbanites seek geographic solutions to societal problems, they forfeit the right to pass judgment?

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Originally Posted by bailey

how about before we go pillaging the neighbors, perhaps deal with the incompetents and thieves that run the city? Start with Anthony Adams... and continue through the alphabet of buffoons that pop up time and time again when multiple millions disappear down a rabbit hole.

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Why make it a precondition when it's a likely result? When you have a city that abounds with poor, poorly educated, civically unengaged people, of course you're going to have the scum rise to the top. If we could expand taxation AND representation into a metropolitan government, it would help clean up Detroit's entrenched kleptocracy, yes?

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Originally Posted by ghettopalmetto

How about when suburbanites seek geographic solutions to societal problems, they forfeit the right to pass judgment?

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When the solution is something other than "send us your money, but don't dare ask to have much of a say in how it's spent" I'll get right on that regional plan.

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Why make it a precondition when it's a likely result? When you have a city that abounds with poor, poorly educated, civically unengaged people, of course you're going to have the scum rise to the top. If we could expand taxation AND representation into a metropolitan government, it would help clean up Detroit's entrenched kleptocracy, yes?

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That would presuppose a drawing of the district lines so that the poor, poorly educated, and civically disengaged don't continue to make up the majority of the pool. There are far too many invested in keeping that population in the majority for it ever to happen.

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Originally Posted by bailey

When the solution is something other than "send us your money, but don't dare ask to have much of a say in how it's spent" I'll get right on that regional plan.

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And conversely, you can't unilaterally deny the City of Detroit self-determination [[no matter how flawed it may be) if you insist that the City carry the burden of housing the region's poor, indigent, and disabled.

If you plant hay seed, you can't expect to grow cotton.

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Originally Posted by bailey

That would presuppose a drawing of the district lines so that the poor, poorly educated, and civically disengaged don't continue to make up the majority of the pool. There are far too many invested in keeping that population in the majority for it ever to happen.

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And far too many too timid to share power to force a majority.

It's frustrating to have a conversation that, probably, is just a stream of rationalizations rather than any serious evaluation of a proposal.

The central city need services, infrastructure and investment.

"Oh, they just want my money."

OK, how about if you get a say in how the city is run?

"Oh, now they want to rope me in with them. I won't do it."

How about if we have an area-wide metropolitan government to ensure a vibrant city, quality suburban environments and pare down the oversprawl?

"It would never work."

We can come up with as many good, sound ideas as we want, but we always hear the same rationalizations. So I posit that there is something distinctly IRRATIONAL behind all these rationalizations. Call it racism. Call it fear. Whatever it is, it's sending us down the drain. And these rationalizations will be on our collective tombstone unless something changes ...

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Originally Posted by Detroitnerd

We can come up with as many good, sound ideas as we want, but we always hear the same rationalizations. So I posit that there is something distinctly IRRATIONAL behind all these rationalizations. Call it racism. Call it fear. Whatever it is, it's sending us down the drain. And these rationalizations will be on our collective tombstone unless something changes ...

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Spot on.

Although, I think you forgot the timeless classic, "...but Detroit isn't like _________ [[name of city)."

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Originally Posted by Detroitnerd

We can come up with as many good, sound ideas as we want, but we always hear the same rationalizations. So I posit that there is something distinctly IRRATIONAL behind all these rationalizations. Call it racism. Call it fear. Whatever it is, it's sending us down the drain. And these rationalizations will be on our collective tombstone unless something changes ...

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How about this rationale:

The city of Detroit is widely perceived to be corrupt and/or incompetent. Based on the regular accounting irregularities and the stream of officials appearing before judges, I'd say that's a fair assessment.

So, why, exactly, do you think other people in the state are loathe to heap more money into the city? Racism?

The city government needs to take drastic action to show that they are on the ball. Conduct independent audits and act on them. Line item everything. Focus on getting the basics in proper working order - police, fire, education, public works. And, above all, be completely open about everything. If some scandal breaks out at the DPD and the police chief goes incommunicado for two weeks - he's fired.

It appears that it has recently been getting better, but a lot more needs to be done. Check out the thread on the Detroit incinerator - this kind of thing shouldn't be happening.

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Originally Posted by JBMcB

How about this rationale:

The city of Detroit is widely perceived to be corrupt and/or incompetent. Based on the regular accounting irregularities and the stream of officials appearing before judges, I'd say that's a fair assessment.

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Let's qualify this carefully, because I think there are a lot of good, honest, hardworking city employees. But, yes, as I said, the scum rises to the top when the so many voters are apathetic, poorly educated and without money. Opportunistic charlatans rise to power more easily in this kind of environment. So, essentially, with that careful qualification, I heartily agree.

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Originally Posted by JBMcB

So, why, exactly, do you think other people in the state are loathe to heap more money into the city? Racism?

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This is how it goes: Somebody presents a rational reason for not helping the city. Sure. Why should a suburban person, in any way, want the city to have a penny more until they get their act together?

But, of course, they CAN'T get their act together. Or their act, such as it is, is as together as it's ever going to be. It's obviously too poor, too corrupt, too much a warehouse for a pool of cheap, unskilled labor -- or more grist for the army or the prison system.

So, that proposal is totally unrealistic. But what if we could have a regional government that brings corruption and incompetence under control, and give us the resources to reinvest in our central city while preserving our desirable suburban environments? What say we all throw in and take responsibility for our region?

No, it's much more comfortable to say you'll help if and when the impossible happens...

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Originally Posted by JBMcB

The city government needs to take drastic action to show that they are on the ball. Conduct independent audits and act on them. Line item everything. Focus on getting the basics in proper working order - police, fire, education, public works. And, above all, be completely open about everything. If some scandal breaks out at the DPD and the police chief goes incommunicado for two weeks - he's fired.

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That is as simple as having an involved electorate: Which is exactly what you don't want to be, and which is exactly what you demand the poorest and least educated become...

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Originally Posted by Detroitnerd

Let's qualify this carefully, because I think there are a lot of good, honest, hardworking city employees. But, yes, as I said, the scum rises to the top when the so many voters are apathetic, poorly educated and without money. Opportunistic charlatans rise to power more easily in this kind of environment. So, essentially, with that careful qualification, I heartily agree.



This is how it goes: Somebody presents a rational reason for not helping the city. Sure. Why should a suburban person, in any way, want the city to have a penny more until they get their act together?

But, of course, they CAN'T get their act together. Or their act, such as it is, is as together as it's ever going to be. It's obviously too poor, too corrupt, too much a warehouse for a pool of cheap, unskilled labor -- or more grist for the army or the prison system.

So, that proposal is totally unrealistic. But what if we could have a regional government that brings corruption and incompetence under control, and give us the resources to reinvest in our central city while preserving our desirable suburban environments? What say we all throw in and take responsibility for our region?

No, it's much more comfortable to say you'll help if and when the impossible happens...



That is as simple as having an involved electorate: Which is exactly what you don't want to be, and which is exactly what you demand the poorest and least educated become...

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sounds like the perfect scenario for an EFM with broad powers to clean house? No?

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And conversely, you can't unilaterally deny the City of Detroit self-determination [[no matter how flawed it may be) if you insist that the City carry the burden of housing the region's poor, indigent, and disabled.

If you plant hay seed, you can't expect to grow cotton.

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Detroit's massive structural issues are not the result of being the regions magnet for the poor/indigent/disabled. Detroit has a 3 billion dollar a year budget it can't figure out how to balance. The presence of some homelessness is not causing 300 million dollar deficits every year. A dysfunctional city government is.

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Originally Posted by Detroitnerd

That is as simple as having an involved electorate: Which is exactly what you don't want to be, and which is exactly what you demand the poorest and least educated become...

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Not so simple. What are the options for a regional government?

1 - A superset over existing governments. Bad idea all around - just another layer of bureaucracy heaped onto the already bloated bureaucracy in existence.

2 - Replacing local governments with a regional authority. This won't happen, either. The first in line to veto that idea would be the city of Detroit. Crap, they fought tooth and nail to maintain control of the zoo. You know, the zoo that isn't even in the city of Detroit. What makes you think they are cede control of everything else? The bureaucrats and lifetime appointees are very comfortable in their current situation.

First you need a housecleaning. That must come from within. Then you can have the change you want. Until that happens, you'll get more of the same.

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Originally Posted by ghettopalmetto

Here you go again, with more of your ongoing "Detroiters just sit around on their asses and the city wouldn't even exist but for the good graces of altruistic suburbanites" diatribe.

You seriously aren't claiming that the vast majority of Detroiters don't have jobs and incomes and tax bills, are you??? Statistics, please. Otherwise, one might think you're just making shit up.

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What he said was true. I disagree with your conclusions as to the motive. And, the "vast majority" of Detroiters statement doesn't make sense, either. Last year, the unemployment rate in the City of Detroit was 50%. Not everybody on public assistance, to be sure, but there are those on public assistance who work as well. Google either one, and you'll have your proof.

People who do not pay taxes tend to vote for tax increases more than people who do...there are a large number of folks in the City of Detroit who are on public assistance and vote. It isn't a revolutionary statement. If that makes someone anti-city and pro-suburban, let me suggest that you find some common fucking sense.

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Originally Posted by ghettopalmetto

Yeah, that whole 1% [[for corporations) and 2.5% [[for resident individuals)...what a bitch.

You want to lower tax rates in the City of Detroit? Adopt a metropolitan government to spread the cost of social services, re-establish Detroit's share of state revenue sharing, or some combination of the above.

And when you lump that 2.5% on top of the 4.35% state income tax, well that's a sky-high 6.85%. That's lower than the top marginal income tax rate in "overtaxed" states such as Arkansas [[7.0%), Delaware [[6.95%), Idaho [[7.8%), Iowa [[8.98%), Maine [[8.5%), Minnesota [[7.85%), Montana [[6.9%), North Carolina [[7.75%), South Carolina [[7.0%), Vermont [[8.95%) and Wisconsin [[7.75%).

So what was that about high taxes discouraging growth?

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You're forgettring the utility tax which no other city in the state can charge and the 73 mills for non homestead property tax. Ithe next nearest cities non homestead millage rate is 55 mills. So I pay far more than I would anywhere else in the state, and I get no police protection and a school system in complete meltdown.

If you want to know why every new development require huge incentives, you can look directly at the absurd tax rates.

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Detroit's massive structural issues are not the result of being the regions magnet for the poor/indigent/disabled. Detroit has a 3 billion dollar a year budget it can't figure out how to balance. The presence of some homelessness is not causing 300 million dollar deficits every year.

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I don't think this is logical. First, the person you were replying to didn't specify homelessness, but rather the " poor, indigent, and disabled". The costs of hosting those folks isn't just whatever is paid to do it, less whatever limited taxes they could pay, but the fact that many people who are better-off don't want to live near them, so those resources are denied the city as well.

In fact, I think I can state quite confidently that if there were some way to remove all the poor people from Detroit next week, the city would be visibly improving within a year, and vastly improved within five years. So I would say there is a considerable cost to Detroit in being the home to that group.

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Originally Posted by JBMcB

Not so simple. What are the options for a regional government?

1 - A superset over existing governments. Bad idea all around - just another layer of bureaucracy heaped onto the already bloated bureaucracy in existence.

2 - Replacing local governments with a regional authority. This won't happen, either. The first in line to veto that idea would be the city of Detroit. Crap, they fought tooth and nail to maintain control of the zoo. You know, the zoo that isn't even in the city of Detroit. What makes you think they are cede control of everything else? The bureaucrats and lifetime appointees are very comfortable in their current situation.

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This is just another ride on the merry-go-round. Option 1 is done in some instances, by taxing new growth only and using new growth to redirect development into the city. But rather than just give the city money, I would like to see the region itself grow up and have a real regional government. I do think there's a lot of resistance to that idea, but I'm frankly surprised to hear that you think the first in line would be the city [[by this, I take it you mean the leaders) of Detroit. I should think it would be much more hotly contested by the likes of L. Brooks Patterson, Mark Hackel, etc.

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Originally Posted by JBMcB

First you need a housecleaning. That must come from within. Then you can have the change you want. Until that happens, you'll get more of the same.

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And this is where the merry-go-round goes another whirl. I'd LOVE to see a vibrant city. It's such a SHAME that they are so poor. But, until they get their act together, I am afraid I cannot help. They will just have to educate their young people super well, raise their standard of living to where neighborhoods are safe, and get so civically engaged that they throw those corrupt bums out. Then, once the city has magically made itself into a bright, clean, fair and prosperous place -- without any of our help, remember? -- then I would be happy to spend mountains of money on that place.

See, that just doesn't make sense. That's why I say there's something IRRATIONAL driving this. And I don't claim to know what it is, just that plenty of people, such as yourself, can say things that, at first blush, SOUND rational. But when you break it down and look at it, it's actually about as rational as saying our astronauts can achieve high Earth orbit by pulling on their bootstraps. ...

More than half of Detroit residents fail to pay income tax, costing $155M annually, city says

If all of Detroit's residents paid their income taxes each year, the city would no longer have a deficit, budget officials told the council this afternoon.

http://www.freep.com/article/2011051...ally-city-says

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Originally Posted by Detroitnerd

. I do think there's a lot of resistance to that idea, but I'm frankly surprised to hear that you think the first in line would be the city [[by this, I take it you mean the leaders) of Detroit. I should think it would be much more hotly contested by the likes of L. Brooks Patterson, Mark Hackel, etc.

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Sooo.. the city with all the incompetent and/or corrupt politicians and bureaucrats... They're going to be totally cool with some uber-governmental body calling the shots?

You could try forcing regional management on the city - that's when the street protests start up and whomever cooked up the idea gets lambasted for disenfranchising the poor people of Detroit.

It wouldn't be a merry go round so much as a three ring circus ;)

I wonder if the columnist had a minimum # of words for the column, cause he's basically guilty of the same thing that has been happening in this thread - roaming all over the place, although he keeps the roaming focused on promises Michigan apparently made but didn't keep with regard to some wonky funding detail or another. Whatever.

The whole premise is flawed. State law should not govern local taxation, plain and simple.

There are numerous other helpful suggestions that have been made on this board and elsewhere over time. I can accept an EFM if he or she can root out corruption and eliminate some waste, for example. But that is a different conversation.

And finally: This endless refrain about how grating Detroit taxes are is hyperbole. It's like that old line about how if you're not mad, you're not paying attention. If taxes are what you're mad about, your head is up your butt. The commuter tax is marginal at best. The Crown Vic ambulance, now that is something worth bringing up. If you make $70k, your commuter tax is less than $1,000 [[right? 1.25%?) What are you paying for parking that this is a headline concern for you? For gas? How long is your commute? The commuter tax is there, sure, but it's total background noise. A minor consideration.

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Originally Posted by JBMcB

Sooo.. the city with all the incompetent and/or corrupt politicians and bureaucrats... They're going to be totally cool with some uber-governmental body calling the shots?

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Now you're just putting words in my mouth. I, personally, would relish the sight of some of Detroit's bloated, dysfunctional bureaucrats skidding out on their asses after an election. Of course, they'd resist it. That said ...

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Originally Posted by JBMcB

You could try forcing regional management on the city - that's when the street protests start up and whomever cooked up the idea gets lambasted for disenfranchising the poor people of Detroit.

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... maybe it's just a matter of personal perspective, but I imagine that city people are quite different from a lot of corrupt city politicians, and may welcome the changes. No doubt there would be suspicions and worries, but you're telling me that the most disenfranchised, poverty-stricken, unengaged people are going to suddenly organize and start bounding down the streets with placards? ... I don't see that happening. Where I DO see that happening is in Oakland County, Macomb County, and, to a certain extent, Wayne County. The perception there is that they'd have something more to lose than just racial block politics and leaders who "look like me" under an overarching regional government.

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Originally Posted by JBMcB

It wouldn't be a merry go round so much as a three ring circus ;)

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Just like right now... ;)