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Tough financial times call for tough decisions

As we reported last week, 60 percent of the city’s $16 million yearly budget goes toward providing police and fire services.
It’s typical for most communities to spend the lion’s share of their budget on public safety.
But the city administration delivered grim financial news last week. Over the next five years, unless something is done to prevent it, the city will be running a multi-millon dollar budget deficit.
Its $5 million budget surplus will evaporate quickly, and unless spending goes unchecked, the city will spiral right back into state receivership.
How is the city going to avoid this crisis?
There is an expectation that new parking meters, which will soon be installed, will bring in additional revenue, and also the sale of city-owned lots will bring in a windfall.
There is also a beefed up economic development team that will work toward pumping up economic development, which in turn will produce tax revenue.
Apparently, a good portion of the city’s savings will come from defunding the fire department.
At a city council meeting last week, we learned that contract negotiations with the firefighters’ union had broken down, and talks are heading toward arbitration.
To say that firefighters are upset with the city administration is an understatement.
They appear to be furious.
Generally, in years past, arbitration has not gone well for the city administration, no matter who is in charge.
But times have changed, and union jobs are getting squeezed. Also, the city has an agreement with Detroit and Highland Park, where their fire departments assist with our fires, and Hamtramck assists with fires close by in those cities.
In other words, Hamtramck will continue to have fire service.
We don’t know how this financial challenge will work out, but it’s obvious that something has to give in order for the city to survive.
March 13, 2020

6 Responses to Tough financial times call for tough decisions

  1. Dennis Nowak

    March 14, 2020 at 8:22 pm

    Bring back state receivership!

    Emergency Manager Cathy Square and the Receivership Transition Advisory Board did a superb job in running the City of Hamtramck – as well as Ms. Katrina Powell.

    Sell off city-owned properties and give tax breaks to those opening up businesses and developing properties within the city.

  2. Resident

    March 15, 2020 at 6:23 pm

    @Denis – no. Not the state receivership. City should hire Nasr Hussain as consultant to tackle “Over the next five years…the city will be running a multi-million dollar budget deficit” with income tax in place.

    Nasr had us believe the city could eliminate income tax, provide essential services, and balance the budget on his extensive posts here: ”
    http://www.thehamtramckreview.com/poletown-closing-comes-with-a-stiff-financial-setback-for-city/

    Nasr was arguing property tax was going to go up. (Was he trying to warn/inform us about upcoming 7-mil bond proposal?) So, why not give the residents and businesses a break from income tax?

    -Resident

  3. Nasr Hussain

    March 16, 2020 at 3:54 pm

    @Resident

    you stated:

    “Over the next five years…the city will be running a multi-million dollar budget deficit” with income tax in place.

    So you agree with me that, even with income tax in place, the city keeps going into deficits?

    Couldn’t this income tax be the reason that the city is going into deficits by turning away development and keeping wealthy residents out of Hamtramck?

    That along with updating our codes to allow for more development.

    We have been keeping that status quo, income tax being one of them, for decades and we still go into deficits.

    There is a reason most of our teachers, police officers, firefighters city officials do not live in the city and it’s time to change that.

  4. Resident

    March 17, 2020 at 10:46 pm

    @Nasr – Yes, I do agree that income tax revenue isn’t sufficient to keep the city afloat. Eliminating income tax will add more to the deficit.

    If the city cuts fire services and relies on Detroit/Highland Park, residents will be paying more on homeowner’s insurance. And Detroit/Highland Park won’t be doing it for free.

    Ask people who migrated from Hamtramck to northern suburbs in recent years, they almost always will tell you “better school” as the reason. I have had privilege to speak with quite a few people and none of them mentioned Hamtramck’s income tax was the reason.

    If income tax goes away, I’ll get to keep more even if the property tax goes up. Win win for me. 🙂

    City council should explore your idea and have extensive discussion with you.

  5. Nasr Hussain

    March 18, 2020 at 12:40 pm

    I think the best option will be to put the issue on the ballot and let the residents decide, if our council is afraid to take this action.

    Any shortcomings in meeting our contractual obligations that “may” happen will be settled by the courts who will place a special assessment on our property tax bill for such, as they have done previously.

    We should trust Hamtramck residents to make the right decision.

    Note: School district pays a very generous sum of the income tax (withholding) to the city, which contributes to their desire for more mileages and bond issue.

  6. Ken Hissong

    March 18, 2020 at 1:07 pm

    Bernie wins big in Hamtramck. Surprise, surprise. Its no big secret that the “Bernie Bros” want freebies. They want to sit on their butts and let others work for them. This is exactly what Bernie has done for his entire life. He was on welfare…got elected Mayor of Burlington, Vermont. Parlayed that into a seat in the House and finally the Senate. So in other words Bernie has never worked at a real job in his life! People who are in favor of Bernie’s “freebies” obviously are not familiar with how Congress works. Congress has control of the country’s wallet. A bill for getting freebies would have to pass both the house AND and the Senate. So in other words, the freebies are not going to happen even if (and that one huge if) Bernie is elected president, he’ll never be able to make good on his promises.

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