Should Dearborn Heights Voters Approve a Headlee Override?

As a liberal who has never met a tax he didn’t like, Mr. Goodman is apparently more than happy to listen to Mayor Paletko’s double-speak. Unfortunately, when you do that you get less than half the story. It’s good to know that he is an equal opportunity tax promoter.

 

On Monday evening, my wife and I attended a Town Hall meeting at the Young Center. Mayor Paletko, the members of City Council, the City Clerk and the Treasurer were there. After a short speech from Councilwoman Horvath about the seriousness of the problem, the Mayor took the microphone, and went through some slides. In the first part of his presentation, the Mayor attempted to define the problem.

 

His first slide highlighted a $4.1 million annual loss in property tax revenues over the last two years, an annual loss of $3.2 million in State revenue sharing and a loss of $1.1 million in court generated revenues for a total loss to date of $8.4 million in annual revenues. An additional annual loss of $1.1 million in revenue is forecast for the next two years. His next slide showed a graph of expenditures and revenues, starting in balance for 2011, at about $36.3 million, with a deficit of about $1 million in 2012, growing to about $6 million by 2015. It wasn’t explained how the $8.4 million in lost annual revenue was absorbed for 2010 and 2011. He then showed a slide with proposed solutions, consisting of concessions from employees, re-negotiation with vendors and a Headlee override approval.

 

Another sheet was passed out showing how a typical taxpayer from either School District #7 or the Westwood School district would be affected by the proposed millage increase. In both examples, of course, taxes were shown to have diminished dramatically from 2008 to 2010 and the tax increases due to the Headlee override were projected to result in a relatively minor increase in taxes versus the current year.

 

During the years between 2002 and 2009, the value of my home in North Dearborn Heights plummeted by 43 percent, based on appraisals both years. The assessed valuation and the taxable valuation continued to rise through 2008. The City of Dearborn Heights has been fighting inflation by spending every red cent it can get its hands on. In 2008, the assessor apparently noticed that her over assessment of my home and that of many others was approaching criminal. My assessed valuation for 2009 was reduced by 23% to the same level as my taxable valuation. My total taxes went up the usual 3% that year, and my city taxes actually increased by about 7%. For 2009 both my assessed valuation and my taxable valuation were reduced by 18%.

 

When I was notified of the 18% reduction in the taxable valuation, I heaved a sigh of relief and decided to forego an appeal of the assessment. I expected that my 2010 tax bill would go down commensurate with this reduced taxable value. Was I stupid, or what? My total tax bill was reduced by approximately 11%. On closer inspection, I discovered that the item on my tax bill labeled "City Tax" actually increased slightly, while the other taxes collected for city services saw a modest reduction. It seems that the City was able to do some slight of hand with Police and Fire Protection pensions and increase the millage pursuant to P.A. 345, an obscure law approved by the voters 10 to 15 years prior to the Headlee Amendment.

I have paid some attention to the discussions regarding the sorry state of the fiscal situation in both Dearborn and Dearborn Heights. I have noticed that in trying to sell their citizens on the need to approve a Headlee override, both mayors have attempted to minimize the affect of the increase on the taxpayers. They have, in their sales pitches, suggested that approval of the requested override would still leave residents with a lower tax bill than they were paying before the crisis. They have attempted to obfuscate the fact that the requested millage increases would raise the city tax collections by the amount that total taxes have been reduced. Perhaps that isn’t important to an individual taxpayer, but it does reveal something about the city’s spending habits. It is also worth noting that a Headlee override is permanent. The new millage will become the base millage rate.

 

Each participant at the Town Hall meeting was given a survey to prioritize the city services they’d most like to keep. It seemed pretty clear that we were being told that services would be cut even if the Headlee override were approved. The floor was then opened up for questions. Many of them weren’t answered very satisfactorily.

 

I believe that the City of Dearborn Heights has failed to do enough homework to justify this millage cap increase, so it has failed to convince me to support it..

 

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