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Budget leaner, but more taxes not likely

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Budget leaner, but more taxes not likely

■ Mayor, Republican challenger agree on one thing: Boosting millage rate is not an option.



Lauded for his budget skills, City Administrator Alfred Gatta says he’s tightened Ann Arbor’s budget belt as much as he can.

“I can’t squeeze anything more,” Gatta said, adding that a year from now City Council will likely have to choose between cuts in basic services like police and fire protection or create “new sources of revenue.”

“New sources of revenue” is often a government code for higher taxes. But you won’t hear much about new taxes from this year’s mayoral candidates.

“We’re basing our budgets on continuing to cut spending,” said incumbent Democrat Liz Brater, adding that a higher millage rate “just isn’t reasonable.”

Republican challenger Ingrid Sheldon agrees.

“We’re levying the maximum (millage) now,” Sheldon said.

And Libertarian Emily Salvette is preaching immediate millage cuts and wants to turn over many city departments to private companies. Tisch candidate Paul Jensen also advocates budget cuts.

While city taxpayers are seeing property assessment increases averaging 8.4 percent, those increases aren’t really a boon to the city budget. Under the state Headlee Amendment, the city will have to reduce its millage rate slightly to assure that tax revenues don’t increase faster than inflation.

Specifics aren’t yet available, but Gatta plans to announce a 1993-94 budget proposal next month calling for spending cutbacks in all city departments.

Inflation and pay increases for the city’s mostly unionized workforce, as well as several revenue losses in recent years accelerate the need for increased revenue, Gatta said. Among the lost revenues in the past couple years:

■ Since 1991, when the University of Michigan deputized its own police force, the city has lost $500,000 in annual revenues the U-M previously paid for police services.

■ Under a June 1991 agreement, the city no longer gets revenue for parking tickets written on U-M property - a loss of some $300,000 annually.

■ Court revenues - such as parking tickets, speeding tickets, and building violations — are down some $600,000 from last year.

The loss in court revenues is especially troubling, Sheldon said, since a half-dozen traffic cops hired last year were supposed to boost revenues. Gatta doesn’t know why more cops produced less ticket revenue. “We’re just starting to look at that,” he said.

City Hall’s payroll has risen from 905 full-time slots during 1990-91, the last year of Republican Mayor Jerry Jemigan’s tenure, to 935 now.

“We can’t create any more positions, and we should probably keep any vacant positions open,” Sheldon said.

Both Brater and Sheldon say they’ll go to city employees for further financial advice on budget cuts if elected.

Sheldon and Brater both, when pressed, acknowledge the possibility of increased city fees over the next couple of years.

Brater points out that a consultant last year determined that city fees cover only half the cost of many services.

“Some fees may go up (in the next two years)." Brater said. “That won’t be a profit-making move for the city.”

Brater proudly sells the fact that she spiked a controversial $1.50 per bag garbage disposal fee shortly after winning election in 1991. Sheldon says the proposal may have to be studied again.

“We may have to institute a bag fee,” Sheldon said. “I’m being honest with you. which is more than 1 can say for some others.”



The issue: City taxes

Two years ago, the average Ann Arbor home had a market value of $118,000. It’s owner paid $989 in city property taxes. This year, the average Ann Arbor home will have a market value of about $125,000. It’s owner will pay roughly $1,020 in property taxes.

The significance

While state legislators malign the current property tax system, they’ve failed fix it. Ann Arborites joined other county residents in voicing their tax intolerance earlier this month by voting down a special education millage that would've cost the average homeowner about $75 a year.

The record

Under Mayor Liz Brater, the city millage rate has slightly decreased since 1991, the last year of Republican Mayor Jerry Jernigan’s tenure. The Brater-led City Council spiked a proposed bag fee for garbage disposal, but increased several other fees, such as water rates and towed vehicle impoundments.