There has been a lively discussion on our website (www.hamtramckreview.com) about whether to abolish the city’s income tax.
One reader insists that the city’s ongoing re-assessment of property values will bring in more revenue and thus, cover any loss in revenue from getting rid of the income tax.
Also, this reader argues, by eliminating the tax, that would attract developers, entrepreneurs and folks looking for a place to live.
And also, this reader has argued that if need be, ask voters to increase the city’s millage to make up for any financial loss.
Hamtramck’s income tax is 1 percent for those who live here, and ½ percent for those who work here but don’t reside in Hamtramck.
To us, that is hardly a deterrent for folks to do business and live here. But perception is everything, and perhaps this could be a turnoff for some.
But taking away the income tax would be an immediate loss of $2.5 million a year.
The city’s total budget is $16 million – so obviously such a hit to the budget would be catastrophic.
Also, the re-assessment of properties won’t mean there will be a sudden influx of money gushing into the city. For sure, our property values will be increasing. We have not had a citywide re-assessment in about 50 years.
But that increase in value won’t happen until properties change ownership. Otherwise, by law, the taxable value is capped for current owners.
Also, asking voters to increase the millage is out of the question. By law, we are also capped by how many total millages we can charge property owners.
A bigger point, though, is why penalize property owners with a further financial burden so we can lift the income tax? Wouldn’t a higher millage rate, if we could increase it, be a turnoff to any potential investor?
It seems unfair to keep punishing property owners. It’s better to spread the financial obligation around to everyone – not just property owners.
Besides, it’s likely voters would reject an increase in property taxes.
But even if you were to buy into the thinking that an increase in property assessments will be some magic financial bullet, wouldn’t it make more sense to first wait and see if that bundle of revenue comes in before rushing to eliminate the income tax?
We mention all of this because there were some city council candidates who campaigned on a promise to lower taxes and water bills. This is reckless thinking.
Do you really think the folks at the state Treasury Department would allow Hamtramck to commit financial suicide?
Move on folks, there’s nothing to see here.
Nov. 29, 2019