Millage Rate Proposal
Current operating tax payments compared with operating tax payment made if entire 3 mills is levied:
Operating tax payments made in FY 2009 compared with those made under the current operating tax rate:
Comparison of property tax payments between FY 2009 and FY 2013 if the entire 3 mills is levied:
1. What will the ballot proposal look like?
WYANDOTTE CITY CHARTER AMENDMENT FOR OPERATING MILLAGE
Shall Section 5 of Chapter XIII of the City Charter of the City of Wyandotte be amended to require the levy of an ad valorem tax in an amount of three tenths of one percent of the assessed value (3 mills) for a period of five (5) years, from 2014 through 2018, on all real and personal property subject to taxation in the city as new additional millage for the purpose of providing additional funds for general operating purpose? It is estimated that 3.0 mills would raise approximately $1,112,000 when first levied in 2014.
May 6, 2014 Election Sample Ballot
2. Didn’t the voters just approve a charter amendment that increased the operating millage?
In November of 2011, voters approved a 1.75 mill increase to the operating millage authorized in the City Charter. At that time, the City was facing a projected annual deficit of $1.4 million. The increase was limited to a term of three (3) years and the additional mills were levied in 2011, 2012, and 2013. Thus, this additional funding does not exist for this year and into the future.
3. Why is it necessary to approve the additional 3-mills when only 1.75-mills are expiring?
When approved in 2011, the additional 1.75-mills were expected to result in $1,015,000 in additional operating tax revenue. In 2014, the additional 3-mills being requested are estimated to raise $1,112,000 – an increase of only $97,000. The fact is that the new 3-mill request is essentially the same as the previous 1.75-mills due to the drastic loss of tax base since 2011. If the 1.75-mill increase was simply renewed, the City would realize approximately $650,000 which is far short of the estimated budgetary shortfall of $1.1 million in the 2016FY.
4. How did the City Leaders conclude that a millage increase was the best option?
A recommendation for a 3-mill increase came from members of a Citizen Advisory Committee appointed by the mayor that met for several months and issued a report dated June 30, 2011. The City Council authorized a ballot question for the November, 2011, election asking for an increase of 1.75 mills for operating purposes. The additional 1.75-mills were expected to raise $1,015,000 annually with an expiration date of three (3) years. But, property values continued their dramatic decline which mitigated the effect of the additional mills that were approved. In reaction to the continued loss of revenue, and increases in most operating expenditures, the Mayor and City Council reduced the operating budget by almost $2 million dollars annually during the last three (3) year. At this point, City leaders have determined that additional reductions in operating expenditures would severely impact the level of service currently being received by the citizens. Thus, the request for additional operating mills was approved for the ballot.
5. What does this mean to my pocketbook?
To maintain services at the same level as they are now and in the future, a home with a taxable value of $50,000 would incur an increase in property taxes of approximately $62.50 annually or $5.21 per month. Note that the taxable value for the average home in Wyandotte is $38,000 which equates to an annual increase of approximately $47.50 or $3.96 per month. These estimates are based on an increase of operating mills of 1.25, calculated by considering the new 3-mills will replace the 1.75-mills which expired in 2013.
6. What has the City done in response to the decline in revenue?
Since 2011, the Mayor and City Council has reduced the General Fund budget by $1.89 million. These reductions came in the form of the elimination of thirteen (13) full-time employees, the implementation of a 20% employee contribution to healthcare premiums, reductions in holiday pay, elimination of longevity pay, eliminations of various part-time employees and contractual agreements, increased user fees, and consolidation of services with the Department of Municipal Services and with several neighboring cities through the Downriver Centralized Dispatch, Downriver Animal Control and the Downriver Consolidated Assessing. Over the past ten (10) years, additional budget cuts have been implemented including the elimination of full-time employees (from 174 to 125), sharing of employees with the Department of Municipal Services, closure of recreation facilities, and the elimination of defined benefit retirement and health care plans for newly hired employees.
7. What will happen if the ballot question is not passed?
Unless the millage is approved, Wyandotte will be required to implement a deficit reduction plan reducing current levels of City services. These reductions may impact the current service levels from Police & Fire, DPS, and Recreation, Leisure, and Culture.
8. What will the money be used for?
The revenue collected will be used to cover City operating costs, including police and fire, public services, and recreation and culture services. It does not represent additional revenue but instead will essentially replace the revenue currently being received from the 1.75-mill operating millage that expired in 2013.
9. Why is the City asking for this increase?
As a result of the struggling economy, and in spite of sound financial management, the City of Wyandotte has experienced an ongoing decrease in revenue. Rising costs of goods and services, coupled with reductions in state-shared revenue (over $10 million since 2003), , and a 40% decrease in property tax revenues has led to the need for additional funds to maintain basic City services. Attached are a number of articles identifying the funding challenges that face local municipalities.
MML Publication “The Review" Articles
Other factors include drastic increases in the actuarially determined annual contribution to the defined benefit retirement system, continued loss of investment income due to the financial markets providing a lack of sufficient rates of return at an appropriate risk level, decreases in revenue from fines and forfeitures from the 27th District Court, and continued increases in health insurance premiums for both employees and retirees.
10. What will the Millage Proposal cost each property owner?
The actual value will vary depending on the specific property’s assessed (taxable) value. We estimate the average homeowner will see an increase of $42.50 in the yearly tax bill. Eligible senior citizens will receive a full or partial refund by filing for the Michigan Homestead Property Tax Credit. The increase is also deductible for those who itemize expenses on their Federal income taxes. To calculate the cost to you, please use the calculator provided.