By Charles Sercombe
Hamtramck, like dozens of communities in Michigan, is set to receive a financial shot in the arm.
According to a federal breakdown of where stimulus dollars are going, Hamtramck will receive $2,132,652 million.
But that amount won’t go far, said City Manager Kathy Angerer.
She said it will be spent on shoring up budget shortfalls that are due to COVID’s impact on the economy.
“This is going to be backfill,” she said.
And by that, she meant that the city saw a drastic downturn in revenue from property and income taxes, as well as what comes yearly from the GM Poletown plant.
Usually, the city receives about $800,000 a year in lieu of GM paying property taxes, in a complicated deal that was worked out when the plant was first built.
That income is tied directly to whether the plant is operating, and how many employees are working there.
For the past several months, and likely for the rest of this year, the plant has been idle – meaning there will be hardly a trickle of dollars coming from GM.
Property and income tax collections are collectively down by $700,000 because of COVID, which led to a number of residents losing their jobs, or experiencing reduced work hours, which in turn meant many could not afford to pay their taxes.
“This barely helps make up what we lost,” Angerer said.
Even with this financial boost, it’s been projected by financial auditors that Hamtramck will continue to remain in deficit spending going forward, due to high pension costs that keep increasing.
Hamtramck’s portion of the stimulus package pales in comparison to what Detroit will receive: $879 million.
Just north of Hamtramck, the City of Ferndale (which has a smaller population than Hamtramck, at about 20,000) is getting just a little less: $1.98 million.
In comparison to Hamtramck, which has a population of 22,000, Ferndale is affluent. Yet that city also suffered a financial loss in the last year of $1.5 million, due to COVID’s financial impact on that city’s once-thriving restaurant scene.
The national stimulus money is part of the $1.9 trillion American Rescue Plan. The total package for 1,500 Michigan communities is $4.22 billion.
Posted March 19, 2021