Taxes vs. Services

[Meddle]

This is a worldwide issue, but since there's a thread here about some sort of property tax relief and so many complaints about high property taxes .....


Nobody like to pay taxes, but everybody likes paved roads and public services. If your house catches fire, you want responding crews to have hoses that don't leak. Do you know what a 50' section of 2 1/2" fire hose costs? Do you know how many sections are on each rig? Do you know how long a section lasts before it has to be replaced? Have you even seen one rupture and the damage and injuries it can inflict?

That's just one example of what governments have to deal with. Think of what it costs to run your office, then think of all the offices the City of Detroit operates.

People complain about the size of Government, then get all fussy when Government lays off workers. People gripe when the hear the salary of a police officer, then bitch when there aren't enough on the streets at one time.

Where is the middle ground?

What are the alternatives?

[KnnNike]

The problem usually isn't taxes in general [[the people who are blanket anti-tax are morons and you'll never be able to do or say anything to change their minds). The problem usually arises when the taxation system gets knocked out of balance.

Here in Detroit, the city was built up from the taxes paid by nearly 2 million residents and tens of thousands of businesses and industry. Roads, bridges, services, etc.. But then a lot of these people and businesses left and stopped paying taxes. But the infrastructure and services are still there and need to be paid for.

It's at this point where a death spiral begins, as has happened in Detroit for many years. You've got to raise taxes to continue paying for everything, since your tax base is smaller. But this encourages people and businesses to leave at an even faster rate. So you have to keep raising taxes. Oh, and this exodus simultaneously results in plummeting property values, so even if a homeowner is still paying property taxes, their house is now worth less so you're getting less money from it for the city.

This is one of the reasons Detroit property taxes are so high; much of the property was basically 'worthless' for years. 10% property tax rate? Seems insanely high, except 10% on a $10,000 house is still only $1,000 per year in taxes. That same house might be worth $200,000 elsewhere, and you'd get the same revenue with a 0.5% tax rate.

The other issue is *how* the money is being spent. I'm not saying I oppose how Detroit spends its tax dollars, but when you've got $100k salaries + benefits being paid for things like 'diversity ambassadors', you'd better be sure those things are ultimately translating into value for the city. My firsthand experience is that while Detroit has a lot of hard-working civil servants, there are also a lot of employees who half-ass their jobs or just generally aren't the sharpest tools in the shed...so what one motivated, competent city employee could do now takes 2-3 staff members. This all translates to higher cost and higher taxes.

So, to answer your question, there aren't really alternatives...we all need to keep paying taxes. But there needs to be more accountability, more work to ensure that the programs being funded are actually translating to tangible benefits, and that incompetent city workers are fired.

The other part of this solution is a wholesale property tax reform in the city. Right now, we still have crazy high tax rates even though there are an increasing number of high-dollar properties. The solution so far has been to subsidize the insanely high taxes that these properties would otherwise pay, through NEZ programs and such. The better solution is to start knocking down the subsidy programs and tax rates simultaneously, so that people in higher value properties pay a higher [[but not crippling) amount of tax, while people in lower value properties don't get stuck with unaffordable tax bills.

[Hermod]

The city lost 2/3 of its residents from 1950 to today. The staffs of the individual council members have increased by insane multiples in that time. When the city has to reduce headcount, they lay off the people that actually work instead of useless drone bureaucrats.

Also, the city used to have rather difficult civil service exams that you had to pass to be hired. Those have been gone for years.

[ABetterDetroit]

The ability to be reasonable has left the room.

The ‘No new taxes mantra’ is ludicrous. How can you not replace outdated bureaucratic tax vehicles that punish capital investment with new efficient ones that can be applied with low cost and minimal repercussions?

A simple example: Why in the hell do we not charge a 6% sales tax for entertainment venues with a capacity for over 1000 people? Lets see, the tax payers built the stadiums, the team owners get tax breaks up the wazoo, then the owners of these venues use actuaries to mathematically fill the venue for the maximum revenue with tickets priced with 25+ different price points based on seat location and amenities. Next up, in this day and age all the patrons of these facilities require a virtual army of law enforcement [mostly on overtime] to protect all these masses, as one poster once accurately stated, to safely escort fans across the street.

It is insanity. A suite that rents for hundreds of thousands of dollars every season pays nothing for excellent protection from the police while a homeowner pays 4% annually for weak at best law enforcement protection in the city. A sales tax is a low cost tax vehicle. People will still go see games and concerts. The owners and players will still make oodles and oodles of money. Owners adjust the prices of these tickets constantly to demand. These sports franchises can absorb a 6% hit easily. They are a license to print money, that’s why the are worth billions of dollars.

When you sit in these stadiums you can literally listen and hear the suburbanite fans exclaim ‘what a shame it is there is so much crime in Detroit it could be so nice’ while they are getting the best protection and a free ride on the property owner’s back while the Detroit neighborhoods have a draw down on their own protection because there is a game in town.

It is F#$&ing hypocrisy at its finest. The people that use some of the best entertainment that a city can offer would be the first to bitch ‘that is a new tax! ’ and then expect someone else to pick up the tab for them and then complain constantly that is exactly what others do and that’s the problem. Idiots that worship billionaires are useless.

Concerts: You can see the same Taylor Swift show note for note in a stadium in LA or Detroit. The ticket prices are again figured out by professional actuaries to extract maximum dollar out of the different markets. Obviously her show tickets cost considerably more money in LA than Detroit. At $300 dollars a pop for rich families to take the kids to see Taylor in Detroit they too will pay the 6% the show will go on and Detroit will get a sizable chunk of change that would allow them to reduce property taxes.

The DPD is hitting Detroit’s budget to hard at 1/3 of the total budget when the evidence in the neighborhoods show a obvious need for even more money still for community policing, better training, and better pay to attract higher educated quality individuals to be peace officers. This is is America. You get what you pay for, pay more you get better. Simple.

[Jason]

One of the issues is that the suburbs have artificially low taxes because their infrastructure is newer and maintaining it isn't expensive yet. Low density, relatively low value suburban development isn't valuable enough to cover the total costs of city services throughout the total lifecycle. As the suburbs get older their taxes and budget problems will approach Detroit's.

This problem could be solved by making laws which require cities to account for the full lifecycle costs of things in their budgeting, forcing them to raise taxes earlier in order to have the money to maintain the infrastructure later. They can also limit how much debt a city can take on relative to revenues or the total taxable value of properties in the city.

An effect of this is that new cities and old cities would be on a more level playing field, and taxes would be linked to the expense of city services instead of being linked to the age of the city.


Cities can get around the problem by themselves by decreasing the cost of its services/infrastructure [[not usually practical), and increasing the value of its properties, so that in the longterm there is enough taxable value to fund everything at an acceptable tax rate. This can be done by changing zoning and other policies to encourage density. For example, a $5 million condo building can compensate for quite a few low density $150,000 houses, and the extra residents increase the value of local commercial space too.

The city lost 2/3 of its residents from 1950 to today. The staffs of the individual council members have increased by insane multiples in that time. When the city has to reduce headcount, they lay off the people that actually work instead of useless drone bureaucrats.

Also, the city used to have rather difficult civil service exams that you had to pass to be hired. Those have been gone for years.

The people who "actually work" are only following the policies that are set by city council and the "useless drone bureaucrats". The council members' staffs help them research and analyze and craft policy. Right now in the budget, "Legislative Agencies" [[which I think is everything related to city council) is $17.8 million which is less than one percent of the city's total $2.187 billion budget. The entire mayor's office is another $10.5 million. Together that's 1.2% of the total budget.

[SFDS]

A bit of a Geeky article on the subject, particularly if you follow the academic journal links.
https://www.city-journal.org/detroit...rty-tax-policy

[ABetterDetroit]

A bit of a Geeky article on the subject, particularly if you follow the academic journal links.
https://www.city-journal.org/detroit...rty-tax-policy

Great article.

The young generation just doesn’t get it because they view everything in payments. In real estate, sure it is just another payment but how that pie is divided up is critically important. A potential homeowner can buy one value of house in one location for 900 a month or a completely different value just down the road. Not only is it crippling Detroit but it is also a major contributor to people moving out of state. How much house one can buy for x amount of payment all over the country is no longer a secret in the internet age. Lansing needs to wake the f@#k up or there will be nobody left here but a bunch of old people. And farmers. Lansing seems to favor the hell out of old people and farmers.

[softailrider]

The ability to be reasonable has left the room.

The ‘No new taxes mantra’ is ludicrous. How can you not replace outdated bureaucratic tax vehicles that punish capital investment with new efficient ones that can be applied with low cost and minimal repercussions?

A simple example: Why in the hell do we not charge a 6% sales tax for entertainment venues with a capacity for over 1000 people? Lets see, the tax payers built the stadiums, the team owners get tax breaks up the wazoo, then the owners of these venues use actuaries to mathematically fill the venue for the maximum revenue with tickets priced with 25+ different price points based on seat location and amenities. Next up, in this day and age all the patrons of these facilities require a virtual army of law enforcement [mostly on overtime] to protect all these masses, as one poster once accurately stated, to safely escort fans across the street.

It is insanity. A suite that rents for hundreds of thousands of dollars every season pays nothing for excellent protection from the police while a homeowner pays 4% annually for weak at best law enforcement protection in the city. A sales tax is a low cost tax vehicle. People will still go see games and concerts. The owners and players will still make oodles and oodles of money. Owners adjust the prices of these tickets constantly to demand. These sports franchises can absorb a 6% hit easily. They are a license to print money, that’s why the are worth billions of dollars.

When you sit in these stadiums you can literally listen and hear the suburbanite fans exclaim ‘what a shame it is there is so much crime in Detroit it could be so nice’ while they are getting the best protection and a free ride on the property owner’s back while the Detroit neighborhoods have a draw down on their own protection because there is a game in town.

It is F#$&ing hypocrisy at its finest. The people that use some of the best entertainment that a city can offer would be the first to bitch ‘that is a new tax! ’ and then expect someone else to pick up the tab for them and then complain constantly that is exactly what others do and that’s the problem. Idiots that worship billionaires are useless.

Concerts: You can see the same Taylor Swift show note for note in a stadium in LA or Detroit. The ticket prices are again figured out by professional actuaries to extract maximum dollar out of the different markets. Obviously her show tickets cost considerably more money in LA than Detroit. At $300 dollars a pop for rich families to take the kids to see Taylor in Detroit they too will pay the 6% the show will go on and Detroit will get a sizable chunk of change that would allow them to reduce property taxes.

The DPD is hitting Detroit’s budget to hard at 1/3 of the total budget when the evidence in the neighborhoods show a obvious need for even more money still for community policing, better training, and better pay to attract higher educated quality individuals to be peace officers. This is is America. You get what you pay for, pay more you get better. Simple.

You get what you pay for except when you pay for what you don’t get. - economics 101 -

[ABetterDetroit]

You get what you pay for except when you pay for what you don’t get. - economics 101 -

I will call you on this one softailrider and raise. Where was that Econ 101 class? The University of Bitter Opinions?

There is world class capitalism going down every day in this country. Where is it flocking to because the local government is cutting its services? That was already forced on Detroit. The experience was more like being the poster child for Failure so the entire country could see what failure looks like rather than a magnet for business.

[JBMcB]

My family has a small outdoor clothing shop. My mom likes to chat up everyone who comes in. About 15 years ago a customer came in who worked for a water system monitoring company. They installed automatic water system management hardware, so you can see how much water is flowing through different parts of the city water system. He had installed dozens of these systems all over the Midwest, for large and small cities.

His day would consist of going to the DWSD service station, going to a room full of dozens of workers waiting to head out to jobs, grabbing a couple, and driving around taking pictures of valve rooms and pump rooms to spec out the equipment they were going to install. Not difficult or complicated work, but I think they had two workers along for safety. In any case, when he would head back to the worker pool, and the same two dozen people would be sitting around. He'd head out after lunch and get back in the afternoon, and the same two dozen people would be sitting there.

He didn't know, or ask, what they were doing, but he hadn't seen that situation at any other water department he'd been to. You'd usually have, maybe, a two or three people waiting around for work at a time, but never dozens.

This was before the bankruptcy where, I believe, they restructured the entire water department. I'm assuming they now have all the workers out doing things, but who is checking?

[Dumpling]

And there was even a HORSESHOER!!!!

https://www.michigancapitolconfidential.com/17404

[Item from year 2012!!]

This is a more recent article from Capitol Confidential.
It is on the topic of Michigan's recent COVID-19 surge.

https://www.michigancapitolconfident...thing-definite

The article doesn't seem to directly take into account the
possibility of the surge being partly due to the UK variant,
B.1.1.7. This variant is also likely causing the surge in
Ontario as well. Michigan and Ontario are more at risk for
the UK variant than many other states/provinces due to
their many economic and cultural links to the UK.

There are other factors such as a general reluctance to
completely forgo youth sports in Michigan and there being
overall fewer masks rather than everyone going to double
masks. It is what it is.

...and I can't just leave well enough alone...I went and
checked the official Ontario information. Ontario's population
is a few million more than Michigan's population. However
they have found a little over 16,000 B.1.1.7 variant cases
to date in Ontario. Mr. Gantert of Capitol Confidential cites
there being just under 2,000 cases of B.1.1.7 variant in
Michigan being a questionable reason for the Washington
Post's attribution of the most recent surge to the variant
here:

UK Variant In Just 0.02% Of Michigan’s COVID Cases; WaPo Blames It For Current Surge – Michigan Capitol Confidential

There is some reason to believe that the variant cases in
Michigan are undercounted or if not, they are about to spike
in very short order.

[Hermod]

The people who "actually work" are only following the policies that are set by city council and the "useless drone bureaucrats". The council members' staffs help them research and analyze and craft policy. Right now in the budget, "Legislative Agencies" [[which I think is everything related to city council) is $17.8 million which is less than one percent of the city's total $2.187 billion budget. The entire mayor's office is another $10.5 million. Together that's 1.2% of the total budget.

And there are [[or were back in the day) nine councilpersons. That is almost $2 million each for staffs.

[Dumpling]

The horseshoer job classification duties are now probably
under the heading "General Blacksmith".

https://detroitmi.gov/sites/detroitm...0%201221pm.pdf

There's probably a lot fewer civil service exams administered
in recent years.

This is probably partly because there are fewer who are big
fans of giving exams or taking exams in various education
and employment areas. It has been found that there is often
only a marginal correlation between exams and school and
work performance later. Of course sometimes what is on
the exam is extremely needed and relevant so the exams
should still be given.

It's also partly because we've gone online for so many work
functions that various tech certificates are more valued
than the old civil service exams.

It's partly because we have a mature economy that does
not need so much to have some kind of "fair" mechanism to
allocate valued school slots or jobs among a surplus of
applicants who come from impoverished backgrounds.

Another aspect of our mature economy is that it has become
more spread out in terms of income. Neither the very wealthy
nor the very poor are big fans of studying for and taking
various kinds of entrance exams.

[Jimaz]

The horseshoer job classification duties are now probably
under the heading "General Blacksmith"....

Another word for it is farrier.

[Jason]

And there are [[or were back in the day) nine councilpersons. That is almost $2 million each for staffs.

Some of them list their staff on their city pages and it's not a ton. Mary Sheffield for example: https://detroitmi.gov/government/cit...rict-5-pro-tem

She has three people who deal with constituents [[I personally don't think it's the city council's job to help people in their district navigate city government, but that's how it is and that's what they're expected to do), three people who deal with policy, and a chief of staff.

There would also presumably be some budget for running events and doing things, some budget for hiring consultants to assist in policy when particular expertise is needed. And then the city council overall probably shares staff related to running the meetings and keeping the documents, and there might be some shared legal staff and things like that. I don't know for sure [[if anyone knows of a budget breakdown I'd love to see it) but it's easy to see how it all adds up.

[Dumpling]

As of about April 12, 2021, the CDC Variant Tracker has stopped
counting up incidences of variant cases and started giving biweekly
percentages of variant cases for each state. As of today the
B.1.1.7 is just under 60% of COVID-19 cases in Michigan as
per the CDC.

UK Variant In Just 0.02% Of Michigan’s COVID Cases; WaPo Blames It For Current Surge – Michigan Capitol Confidential

Link to the CDC page of interest for variants:

US COVID-19 Cases Caused by Variants | CDC

[Hermod]

Some of them list their staff on their city pages and it's not a ton. Mary Sheffield for example: https://detroitmi.gov/government/cit...rict-5-pro-tem

She has three people who deal with constituents [[I personally don't think it's the city council's job to help people in their district navigate city government, but that's how it is and that's what they're expected to do), three people who deal with policy, and a chief of staff.

There would also presumably be some budget for running events and doing things, some budget for hiring consultants to assist in policy when particular expertise is needed. And then the city council overall probably shares staff related to running the meetings and keeping the documents, and there might be some shared legal staff and things like that. I don't know for sure [[if anyone knows of a budget breakdown I'd love to see it) but it's easy to see how it all adds up.

I know it quickly adds up, but how many clerks and jerks were employed by the council and its members back when they had to service 1.8 million people?