Hard Times Heading Our Way

By Charles Sercombe

Since this is an election season, candidates may want to heed the words of warning coming from City Manager Bill Cooper.

Cooper said the next three years are going to be rough, financially-speaking, for the city. He said the city faces a $1 million deficit next year and an additional $1 million deficit the year after that.

This budget year, however, is good. Hamtramck will finish with a $300,000 surplus.

Why will there be a turn for the worse in the coming years?

Cooper said the former administration used settlement money from Wayne County over a dispute about how much the county should pay for locating its jail here in the city. For two years the city received payments of $2 million a year from the county to settle the dispute.

Now that the county has paid up, the city will receive only $1 million a year.

There’s more bad news as well. Hamtramck will lose $500,000 a year it collected from income taxes from workers who used to be employed at American Axle & Manufacturing. Nearly all production was shifted a few months ago from the plant to the company’s new plant in Mexico.

Also on the horizon is an appeal by GM over how much it pays in lieu of property taxes at its Poletown Plant. Hamtramck receives $4 million a year from the plant. GM is seeking to reduce that payment by 80 percent.

The appeal will be heard by the state’s Tax Tribunal. No date has been set yet for a hearing.

Also coming next year is a likely reduction in the amount of money the state doles out to communities in the form of tax revenue sharing. The amount of taxes the state receives has gone way down in recent years. This year it will lose hundreds of millions of dollars. That means the state will have less money to share with municipalities. Just how much less Hamtramck will receive is unknown at this point but it will likely be substantial.

Cooper said it will take him 45 to 60 days to come up with a plan to survive the financial blow.

No matter what, it won’t be pretty.

“Nothing will be sacred,” Cooper said.

Cuts to city employees may go deep. On the possible list to go are the economic director, the DDA, the special events coordinator, Treasury Department employees, DPW employees and police officers and firefighters.

Cooper said that as a last resort the city will ask voters to OK a three-mill tax to keep the police and fire departments intact. The cost to the average household would be about $100 a year.

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