Forum On Income Tax Proposal Attracts About 20 Persons

Speakers taKing pare in a i debate of the proposed Ann l Arbor city income tax last night I generally agreed such a tax is Imore equitable than the properIty tax, but disagreed on the Imerits of the proposal which Iwill face voters Nov. 3. I Speaking in support of the tax ■package were Joseph R. Julin land Robin Barlow, while John ■C.Feldkampand Jerome lüupont spoke in opposition. The Idebate was sponsored by the iLeague of Women Voters and Iwas attended by a sparse audilence of about 20 persons. I Julin, associate dean of the llJ-M Law School and former lAnn Arbor School Board presiBdent, noted that he was billed las a Republican but said his lopinions "are not necessarily Bthe views of the city RepubliBcan committee. I'm sure Brian Bconnelly would like that made ftlear." (Connelly and the GOP ■committee have come out in Bopposition to the income tax I proposal.) The issue of needed revenue must be faced squarely, Julin said, adding that the "attitudes of some who say sit tight and wait bothers me." Leadership on local taxation has been provided by two mayors, he added, one a Republican (Wendell E. Hulcher) and one a Democrat (Mayor Robert J. Harris). Julin said the income tax is more related to a person's ability to pay. "It is fairer and more equitable. If you don't agree ability to pay is a prime criteria, then you should vote against it." Stating the city should have adopted the income tax "a long time ago," Julin said "it is not the answer to all money problems, it may not be as fair a tax package as man can devise, but it is much fairer and equitable. We shouldn't sit back and let the property tax inequity last one day longer than necessary." Feldkamp, a former City Councilman and member of the Blue Ribbon Committee on Taxation, said he basically endorses an income tax but not this package and not this year. He said the new tax is being pushed by its backers on grounds of equity, but will bring in new revenues of upwards of $1 million. He also criücized the timing of the income tax vote, stating there has been no widespread campaign to gain acceptance and the "council has asked that the community make a basic change in its municipal finance structure with only four months notice." He said the "haste of the current proposal" will force the city to esfablish its own collection system which will cost about four per cent of the revenue gained from the income tax. "If the income tax were enacted one year later the state could collect the tax for the city and charge only two per cent ..." This would represent asavingsofnearly $100.000 "in needless short term administrative machinery." Feldkamp also claimed theB benefits of the proposed 1 fcgr tax relief of 7.5 milis "have I been grossly exaggerated." He ■ said with reassessments and ■ aew taxes levied by other II ernments "few if any II ers will see any decrease in II their property tax bilis." "Another exaggerated I ment of the supporters is the I statement that lower property I taxes may stimulate the II ing of new housing and this I increased supply will prevent II rents from rising rapidly," I Feldkamp said. "As a housing ■ officer (at the University) ijl know the only hope for new ■ housing rests in less costly con-B struction techniques and great-B er availability of financingB money at more attractive inter-B est rates." He said lowerB property taxes might even raiseH land values and make housingB more costly. Barlow, an economics profes-HJ sor at the U-M and also a mem-B ber of the Blue Ribbon Com-BJ Imittee, said the income tax Ipackage has been so devised Ithat Ann Arbor taxpayers will Ipay no more total taxes than Ithey have been paying. AddiItional revenues will come from ■non-residents working here, and ■city residents will receive some K300,000 in tax credits from the Istate, he said. I Barlow said the income tax Bias been discussed here for a Iperiod of 5-to-6 years and is not Ibeing enacted hastily. "It is labsurd to say there has not Ibeen public discussion," he Isaid, adding that most persons ■are knowledgeable about the ■tax package and have made up Itheir minds. On the question of waiting a lyear to permit the state to colllect the tax, Barlow said to Idate the state has refused to do I this. He also said cities that I have levied the income tax I have stayed within the two per I cent mark for collections. I It is false, Barlow said, to ■ state that homeowners would Inot realize property tax tions. The tax tö some extent will transfer the burden from Low income to high income persons, he added, and "it doesn't impose an absurdly high burden on those who like to put their dollars in housing." Dupont, chief reference librarían at the U-M Law Library, said he agreed the income tax is better than the property tax. "It is this particular income tax along with this tax package I'm opposing." He said in Ann Arbor the tax package will result in the shifting of an inequitable burden from one group to another. He said renters will be hit hardest by the tax package. "If the landlord's heart is made of gold he will be able to pass on the savings. However, there is a pretty strong feeling they won't pass on the savings. Renters will have to pay the same rent plus the income tax." Dupont said there are a large number of older persons renting, and that these individuals will be hardest hit by the new tax. Also, he said, the tax will hit out-of-towners who work tiere and most of these persons are in the lower income bracket. During the question and answer portion of last night's debate, Julin commented that every year the tax is deferred the city is "losing" about $800,000. Commenting on Feldkamp's contention that the city should wait to have the state collect the tax, Julin said the collection at most would cost $160,000. "To save that we're not collecting $800,000." Julin added that t h e r e appears to be general agreement that the income tax would be a good plan a year from now. "This dilutes the argument that it's not a good plan tomorrow," he said. There ae merits in the package, Feldkamp said. "My point is that we should wait a year. We should then know how much property tax reduction can be accomplished." He said his endorsement of a tax package next year would depend on what is to be done with the extra money and how much of a property tax there would be. Barlow disagreed with Dupont on the effect of the tax on renters, stating deriving benefit would "not rely on the I landlords acting out o f I generosity." He said renters I would likely enjoy benefits in al "year or so" when more newl apartments are built, the I increased supply forcing rentsl down. Asked what the U-M reaction to the income tax would be, Julin said since students living off-campus would not be paying directly toward property taxes as they now are the University therefore should pay a larger percentage of the city's budget. I Feldkamp said he didn't believe the tax would have any great affect on current U-M payments to the city, but that these payments may be affected in the future by the state Legisla ture. - - - '■ ■ - "