More doom and gloom from Council over City Income Tax and Water Street

(May 26, 2007) The Doom and Gloom over city finances continues. At the Thursday budget session, Ypsilanti City Council laid out the parameters for the City Income Tax. The proposal is for a 1% tax on residents, 1/2% on non-residents, and a 4-mill roll back for all property owners. Numerous residents spoke out against the City Income Tax while only one resident spoke in favor of the city income tax. The lone supporter was former Mayor Cheryl Farmer who is likely heading up the pro-income tax group.

Watch video of May 24, 2007 Ypsilanti City Council

While the current mayor is proposing new services with the City Income Tax, Council finally learned tonight that even with a City Income Tax, by year three they won’t have enough money to pay for current services, much less any new services.

The problem is the crushing debt from the former mayor’s pet project Water Street. Debt payments balloon to over $2 million a year and the only way for the city to pay for Water Street is with the City Income Tax or a 4 to 5 mill increase in property taxes. That is the same 4 mills that is being proposed as a reduction to entice residents to vote for the City Income Tax.

For the first time, council also admitted that the promised 4 mill property roll back could be raised with a simple 4-vote majority at a later date to pay for Water Street or other emergency spending. City Attorney John Barr argues that there may be a lawsuit if the millage is raised, however he also pointed out that the bond holders of Water Street would also likely sue and force the city to increase the millage to pay for Water Street. What a mess.


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