By Charles Sercombe
How the city survives financially now depends on voters.
Acting on a suggestion by the city administration, the city council last week agreed to ask for voter-approval of a millage to cover the cost of the police and fire pensions.
The city currently collects a half mill for the cost, but that raises only a little over $103,000 a year.
The city’s actual cost is over $2.2 million a year, which comes out of the city’s general budget.
To cover the actual cost, the city wants to levy up to 10.5 mills, which could be adjusted down if pension costs decrease, or if another revenue stream is found.
The city is aiming to get wording for the ballot proposal approved and ready to be on the August Primary Election.
For the average homeowner, the millage increase would cost an extra $300 to $400 a year in property taxes. The new millage would expire in 20 years.
As it stands now, the city is projecting about a $2 million budget deficit for the new fiscal year, which starts on July 1. That’s because revenue collection has dried up since most businesses were shut down due to the coronavirus pandemic.
People in Michigan have also been ordered by the governor to self-quarantine at home unless they were involved in essential work, or had to perform essential chores.
That projected deficit is on top of the $1.8 million budget deficit the city is running in the current budget year.
The city had a $5 million budget surplus a couple of years ago to dip into, but that will be wiped clean in another year if finances don’t take an uptick.
That appears unlikely. The state is also losing billions of dollars in revenue, which will likely lead to a 25 percent cut in state revenue sharing, the funds the state shares with communities.
The police and fire millage will likely face an uphill battle as many homeowners are also hit hard financially.
Some may even be looking at foreclosure in the coming year.
Not all city councilmembers were on board with the millage. Councilmember Mohammad Hassan, who is running for county commissioner this year, said the police and fire pension plan is “luxurious.”
“Hamtramck has already given enough,” Hassan said about their pensions.
Councilmember Ian Perrotta said the millage at least allows the city to “put out all on the options.”
City Manager Kathy Angerer said she cut as deeply as she could into the city’s budget, without having to seek changes to union employee contracts.
She has taken a 10-percent pay cut herself and ordered a 5-percent pay cut to department heads.
Another proposal is to end the city’s $134 a month contribution to all retirees for their health plans.
Posted May 29, 2020