Like it or not, a tax hike is coming
Doing nothing is not an option.
Hamtramck’s financial forecast is not looking good. In about two years, the city will no longer be able to pay all of its bills.
What’s killing the city is the cost of retirees’ pensions. Add it all up, and it comes to about half of the city’s yearly budget of $16 million.
Voters were asked last year to help ease that burden by agreeing to a property tax increase to pay for the police and firefighters’ portion of the pension.
The city sought to raise property taxes up to 10.5 mills. The city now charges a half mill, but that covers only a fraction of the cost. Predictably, voters rejected the proposal.
While we understand this is not a good time for many households to agree to a hefty property tax increase, there will likely come a time when they have no choice.
Fortunately, city officials agreed this week to ask voters for approval one more time. An election is scheduled for Aug. 3.
(Editor’s note: In the print version of The Review it was said the election would be held on May 4. Although that date was stated in an overview of the city council’s resolution, the date was changed during Tuesday’s council meeting.)
We don’t mean to beat a dead horse here, but if the city misses a payment to its pension system, it will likely land in court, where a judge will impose a property tax.
Don’t think it will happen?
Look no further than the City of Melvindale, which was in the same predicament as Hamtramck is in: The city couldn’t afford to pay all of its bills, and missed a pension payment. A judge ordered 12 mills onto the property roll.
Hamtramck voters have a chance now to craft their own millage increase.
If we do nothing, a judge will likely impose a much higher millage judgment.
Posted March 12, 2021
8 Responses to Like it or not, a tax hike is coming
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Nasr Hussain
March 12, 2021 at 8:14 pm
Not necessary, the city can earmark all income tax revenue (which Melvindale does not have) + GM plant payments towards the payment of pension obligations.
All other obligations can be cut till the budget fits without a threat of emergency manager or court judgement.
-resident
March 12, 2021 at 10:49 pm
Not so fast!
City of Detroit is getting about $800 millions from Biden Rescue Act. Detroit public school is getting about a billion dollar.
Hamtramck city should be getting millions from the Biden Act. Use it to fund pension. Then everything else.
Hamtramck public school should be getting millions as well… lots of money to build new school. 🙂
Nick
March 13, 2021 at 7:38 pm
When the People worked for The City of Hamtramck 25 years 30 years that’s what they Deserve and were promised when they Retired or why would they of Worked their whole live if Its just gonna be Taken from them…. come on now… Get your Heads out of your Asses Quit wanting to Raise Taxes to pay for Retirees that’s been Retired for years.. Bring Buissnesses In Town fill up all the Empty Storefronts…
mark stema
March 14, 2021 at 10:06 am
Looks like Hamtramck will be getting almost 2.2 million dollars in stimulus funds. Use the whole amount to cover the pension and no need to make the residents pay.
Nasr Hussain
March 14, 2021 at 4:24 pm
More info:
https://www.thehamtramckreview.com/for-some-retirement-pays-well/
Resident
March 14, 2021 at 7:30 pm
@Mark Stema – where did you get your stimulus number? Hope it is not accurate. 2.2 million is too low. I think it is going to be over 25 million.
-Resident
Nasr Hussain
March 15, 2021 at 11:22 pm
@Resident
$99 per person, total : $2,132,652
https://www.bridgemi.com/michigan-government/biden-covid-stimulus-brings-billions-michigan-how-much-will-your-town-get
Resident
March 16, 2021 at 10:20 pm
@Nasar – thanks. Stimulus bill supposed to provide more money to poor struggling cities. Detroit is getting $879,589,797 or $1,313 per person… Huge difference. Ours is a poor city just like Detroit. Yet, we are being shortchanged.