The gloves may be coming off

October 20, 2008
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Grand Rapids Township Supervisor Michael DeVries seemed to summarize the feelings of all Grand Valley Metro Council members last week when he said state lawmakers have placed them between a “rock and a hard place.”

The rock means their residents would pay higher property taxes, while the hard place means their units would get less property-tax revenue.

“Not only does it mess up every local government’s budget, but also the schools’ budgets,” he said.

Grand Rapids City Manager Kurt Kimball said the Legislature’s property-tax maneuver would cost his city’s budget about $1 million next year if it was enacted this year — a revenue loss he said the city couldn’t afford.

“It will be embraced by legislators who are cowardly and citizens who want a tax break,” said Kimball, who is leaving the post he has held for 22 years on Dec. 31.

But the biggest outcry last week against the potential legislation came from Wyoming Mayor Carol Sheets. She called for the recall of state lawmakers who support it.

“We have to have a united front. I hate recalls, but this is what has to be done. I don’t think they really understand the ramifications of this and I don’t think the press understands it either. We have to take the gloves off,” said Sheets at last week’s council meeting.

HJR III is a proposed amendment to the state constitution that, if approved by two-thirds of both state chambers, would appear on the November 2010 statewide ballot. If voters ratify it, which they surely would, the measure would prohibit property tax increases when home values don’t rise to the rate of inflation.

Right now, a homeowner’s tax bill can rise even if the taxable value of that house falls. An increase is currently set to the inflation rate or 5 percent, whichever is lower, and the inflation number is added to a home’s taxable value. In Kent County, the taxable value is expected to go up by roughly 4 percent next year based on this year’s inflation figure.

Having HJR III eliminate an increase would mean local governments, public school systems, community colleges and transit agencies wouldn’t get the inflationary boost in property-tax revenue but would see their operational costs go up by inflation. Sheets said Wyoming would likely be forced into making further cuts in public safety if the constitution is amended.

“Maybe the state should take care of its own problems before it hurts cities, townships and counties,” said Al Vanderberg, Ottawa County administrator.

Metro Council at-large member John Helmholdt, also communications director of Grand Rapids Public Schools, said passage of HJR III would represent a $500 million revenue loss for schools across the state.

“It’s shocking that this is flying under the radar screen,” said Helmholdt.

The Michigan Township Association estimated HJR III would reduce property-tax revenues by about $100 million statewide next year and it would come on top of lower revenue-sharing payments. Property taxes and revenue sharing are the top two revenues sources for most local governments.

“It got 105 votes in the House; it was unanimous and it came out of nowhere,” said GVMC Executive Director Don Stypula of the chamber’s recent record roll-call vote.

“It’s probably going to be up there in the high 70s, at a minimum. It’s a no-brainer,” he said of the percentage of state voters he thinks would favor the measure.

Stypula added that House Speaker Andy Dillon, D-Redford Township, let the proposed amendment go through the process.

“He could have stopped this,” he said of Dillon, who is facing recall and re-election votes Nov. 4.

Metro Council members decide last week to try to squash HJR III before it can pick up any steam in the upcoming lame duck session, when outgoing term-limited lawmakers make decisions they might not normally make if they were facing re-election. The board plans to enlist additional support from area school systems and then take their message to Lansing.

“We need to continue talking with our legislators and we need to increase the intensity,” said Stypula. “Of all the possible times to roll this out, this is the worst.”

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