By Charles Sercombe
It’s the proverbial 800-pound gorilla sitting in the room that City Councilmembers finally can’t avoid any longer.
And that metaphorical gorilla is something the council has adamantly avoided acknowledging: raising the city’s property tax rate to its legal limit.
From what councilmembers recently have said about the tax increase, it appears they are ready to approve it with this year’s new city budget, which kicks in July 1. City Manager Bill Cooper said it looks like a done deal for the 2.3 tax mills that this year’s budget is counting on to help balance the books in the coming two years.
“The council realized it has to do everything in its power to increase revenue,” said City Manager Cooper in a telephone interview with The Review.
For the average homeowner, the tax will translate into an additional $60 a year. Although no one likes a tax hike, keep in mind that property owners have enjoyed a tax break during the past few years.
That’s because property values have dropped a whopping 13 percent in recent years, which has meant a loss of about $700,000 a year in property taxes for the city.
The tax is expected to raise an additional $420,000 a year. That may sound like a lot of money, but the sad fact is that by the end of 2012 the city will still have a $3.4 million budget deficit.
Hamtramck will not be alone in raising taxes. Voters in several communities just passed various tax increases to help offset costs, mainly for police and fire service.
The budget also counts on getting drastic contract concessions from the police and fire unions. Cooper said he needs the unions to agree to kick in 20 percent of their health coverage, end minimum staffing requirements and take the hit of losing five cops and five firefighters.
Those are big concessions and there is no guarantee the unions will agree to them. In fact, it’s a good guess they won’t, if the past is any indication of what is to be expect.
Still, the city can pass the new budget on any number of hopeful savings and new revenue streams.
The Hamtramck 31st District Court will also continue processing traffic tickets in exchange for reinstating a 5 percent salary cut to the staff and funding additional hours for a magistrate to catch up on tickets.
Councilmembers have met several times in the last few weeks to hammer out the budget with the city manager.
If the expected savings do not come in the coming fiscal year, the council will have to go back to square one and adjust the budget. But reality is, there are no other options, or ‘Plan B” as Councilmember Cathie Gordon asked for.
All of the aforementioned budget proposals could end up on the cutting floor by the time the council has a budget to vote on.