Council clears way for voters to approve tax increase

Sunday Times Newspapers

RIVERVIEW – The City Council took the unusual step Monday of raising taxes by increasing the city’s operating millage in order to seek additional millage from voters in May.

The move raises the city’s operating millage to the maximum allowable under Michigan’s Headlee Amendment, which bars municipalities from increasing taxes without a vote of the people.

Headlee also restricts tax increases to 5 percent per year or the rate of inflation, whichever is lower. It forced officials to make the move in order to give taxpayers the chance to approve the balance of the millage needed to try to maintain the existing level of city services for the current budget year.

City Attorney Randall Pentiuk said the council conditionally approved a 1.6- to 2.5 -mill increase on all real and personal property for the fiscal year starting July 10, subject to the successful passage of a May 4 ballot proposal to increase the millage by 3.4 mills – which would authorize an override of Headlee and allow the city to collect taxes at a higher rate.

Councilwoman Betty Priskorn explained it more simply, saying the council had to impose a tax on the residents to let them vote to increase it. She reminded residents that officials don’t know what revenues will look like in the future, and there is no guarantee it will not continue to decrease.

Priskorn also said the loss of state revenue sharing and lower-than-expected landfill revenue were factors. The latter is a result of less waste being taken in, as well as past clients who failed to pay that are being pursued through legal means.

The council intends to rescind the tax increase authorized last week if voters do not approve a corresponding one on their own. Members approved the motion for the conditional tax increase unanimously. Councilman Elmer Trombley said if the millage passes, there will be no layoffs until next year’s budget. City Manager Dean Workman confirmed that the layoffs are on hold for now.

“For the past five years the council has instructed me to balance the budget without raising taxes,” he said, adding that attrition, combining departments and cutting benefits have allowed him to do so.

Workman added that state revenue cuts in the middle of a budget year is a situation the city never has faced before.