Tax Cap a Cruel Hoax

From its beginning, the cap has been a cruel hoax.  It was poorly designed and it never capped the total tax bill for anyone; all it did was cripple essential government services to city businesses and citizens.

Consider this...When the 1979 tax caps were voted in, the total tax rate was about 54 mills. By 1994, the total millage rate from all taxing units had skyrocketed to 66 mills. And even though the city's property tax base had actually grown, the city administration was forced to continually reduce its operating millage, which required cutting the number of operational departments in half and reducing the workforce which served its citizens by over one third.

·        At the time of its passage, the cap limited less than 20 percent of the total bill.  The part of your taxes that provide police protection, firefighters, money for social service agencies and funding for workers who kept streets repaired, weeds cut and ensured blight fighting ordinances were enforced.

·        The next time you need a cop, or see a firefighter carrying a body  from a burning home,  remember,  one out of every three city of Saginaw police and firefighters is now gone due to the tax “cap”.

·        The so called “tax cap” never limited taxes collected for Saginaw County, the County Intermediate School District (ISD), the public school system, the public library system, the Historic Society of Saginaw County, Mosquito Control, a County Senior Citizens program and Delta College --- it applies only to the city of Saginaw – the government unit that happens to send out the annual tax bill for all jurisdictions taxing Saginaw's property owners.

·        The tax cap never limited taxes period – In fact, one new taxing jurisdiction has arisen since the so called cap was put into place: Saginaw Transit which collects 3 mills annually – That three mills by itself adds over 10 percent to the current total “homestead” levy.

·         The tax cap never limited taxes period --- if fact, the Saginaw Public Library System which prior to Michigan’s 1994 had been funded through the Saginaw School System, has become a separate taxing unit and now collects its own millage which is double the pre-Proposal A library millage.

·        The tax cap guarantees that when GM or any major taxpayer invests in the community, the city can’t collect one extra dime in taxes from the investment.  Everyone else gets new taxes based on the investment, but not the city of Saginaw.  Its millage rate must be rolled back to offset the new tax base.  Smart eh!

·        The tax cap is a cruel joke -  the accounting firm of Yeo and Yeo was asked to perform a “Fact Finding Report” of the impact of the tax cap. In it the firm said, “we confirm the fact that the City of Saginaw Property Tax Dollar Cap prevented the City of Saginaw from potentially collecting $1,528,986 in state revenue sharing from 1979 to 2002.  The City of Saginaw Property Tax Amended Charter Cap prevented the City of Saginaw from potentially collecting $5,099,239 in State Revenue Sharing from 1979 to 2002.  Real smart eh!

·        Speaking of facts, during the last election campaign to remove the tax cap, a group called “Revived Saginaw United taxpayers” made the following claim:  “Did you know that 70% of the total property tax is paid by homeowners and renters?”  It’s not clear where that number came from, so here are statistics from city Assessor’s records.  Note that homeowners currently pay about 30 percent of property taxes collected in Saginaw.

Since the claim that 70% of the total property tax is paid by homeowners and renters is so blantantly incorrect, one might begin to wonder what other things proponents for the tax cap are wrong about?