When Farmington council members approve the city’s 2018-2019 budget later this month, they’ll also set the year’s property tax rate.
During their Monday, June 4 meeting, officials will set a public hearing on the budget. They must also decide whether they’ll stick with the current 14 mill property tax rate or bump it to the cap set by the city charter.
Conversations during two recent special meetings have focused on the outcome of two community financial forums. Citizens who attended clearly favored raising taxes over significant cuts in city services.
View video of the first community meeting, and presentation materials on the city’s website.
On April 26 and May 16, officials laid out the city’s position, with triple digit deficits expected over the next five years. During the forums, Mayor Steven Schneemann said challenges lie with both operating expenses – for public safety, public works, administration, district court, recreation and culture, economic and community development, and street lights – and capital improvements, such as roads, sidewalks, water and sewer, city hall and grounds, parking lots, park facilities, and streetscapes.
Schneemann said the city does have a road millage, but the funding is limited and “more is needed to maintain and improve the roads.” The same holds true for water and sewer expenditures.
Funding sources for parks, buildings, parking lots, and public safety equipment were eliminated due to the 2008 recession.
Operating revenues have not increased over the past 10 years. Expenditures have increased, but at less than the rate of inflation thanks to “some major belt-tightening over the past 10 years,” Schneemann said.
Municipal money issues across Michigan
Despite a modest recovery in property values, the city’s ability to capture any increase in property taxes is limited by Michigan’s Headlee Amendment and Proposal A.
According to SEMCOG (Southeast Michigan Council of Governments), Michigan ranks 50th among U.S. states in overall municipal government revenues, with a decline of 8.5 percent From 2002 to 2012. Neighboring Ohio increased by more than 25 percent; the U.S. average was a 48.9 percent increase.
Through that same period, state funding for municipalities dropped by a whopping 57 percent in Michigan, even as the national average rose by more than 23 percent. Michigan also ranks among the states receiving the smallest amount of federal aid.
Survey says: 3 mills
Given the choice between significant service reductions and a tax increase, the majority of those who attended the community forums said they preferred the latter. Participants favored a 1.5 mill operating millage increase, which officials could enact without voter approval, and a 1.5 mill Capital Improvement millage, which would be on the November ballot.
Officials could lower the millage rate after the public hearing notice goes out, but would have to hold another public hearing if they decided to raise it. The 2018-2019 budget must be approved before June 21.
Other Monday agenda items
During their 7 p.m. Monday meetings officials will also:
- interview for an open position on the Emergency Preparedness Committee
- consider giving the city Treasurer authority to deposit surplus funds with a list of approved financial institutions
- review a contract for asphalt repairs due to 21 water main breaks and at Oakwood Cemetery
- finalize the city’s participation in a joint Commission on Community Health
- talk about video recording the first council meeting of each month
- review a request for a partner agreement that would bring new playground equipment to Flanders Park
The full agenda for Monday’s meeting with supporting materials is posted at farmgov.com.