Budgets, Taxes, and Other Fun Topics

Anyone who knows me, knows I have a lot of opinions.  I’ve established this as a matter of record, by public commentary at meetings, comments on online publications, and most of all, by publishing a blog since 2009 with observations and opinions about Ann Arbor’s civic life.

A wise political adviser would probably not have recommended this behavior as a basis for running a political campaign.  In fact, one person advised me to lock the whole thing (the blog) under a password.  But since I’m on record with Local in Ann Arbor on a number of subjects, here is where I step up and take responsibility on some difficult subjects that I’ve written on in the past.  I’ll also set out my positions on those subjects.

Budgets

Budgets are boring.  Budgets are essential. The budget process that every elected body undergoes each year is often frustrating, usually incomprehensible to almost everyone but those obligated to dive into it, and is the major job of government.  The budget is the actual embodiment of the policies that will direct what our government does for us.  In the budget, important programs come to birth, live, and die.  As a veteran of many budget cycles (as a county commissioner), I’ve gotten to have an understanding of a few of the “tricks” and a philosophy of how it should be done.

Note: This year’s City of Ann Arbor budget deliberations fit the description.  Congratulations to the Ann Arbor Chronicle for doing a heroic job of summarizing the discussion.  (I’ll read it in detail later, honest.)

Here are the essentials of my budget philosophy:

  • Take care of business first:  make sure that there is enough money to conduct the ordinary and expected business of government.  This includes services and functions mandated by law and also “basic” services, which in a city include road maintenance, trash removal, fire and police protection, and water utilities. This is my first priority.
  • Keep the cost of government itself within bounds: administrative and technical departments should have adequate funding to operate properly, but watch the natural tendency to spread out, buy the latest equipment, hire consultants or more staff than necessary.  The amount spent on these departments should not be disproportionate to the rest of the city’s operations.  Council should not waste money on its own activities, either.
  • Keep promises made to voters:  Dedicated millages and fees should be used in a responsible way to fulfill the purposes for which this money was collected, not carved out to support different programs.
  • Don’t spend money based on the most optimistic future scenario: I wrote about this concern in a blog post in which I related some of my frustrations with  financial decisions made by Washtenaw County (which did, ultimately, turn out badly).  Here is part of what I said:

Second, decisions have been made that seem to depend on wishful, or worse, magical thinking.  This is what I also refer to as linear or “what could go wrong?” thinking.  For example, during the housing boom, the county budget director repeatedly and yearly came out with budget forecasts prefaced with the statement (in writing!) that “the best predictor of the future is the past”.

On the one hand, we must not be paralyzed with fear and must plan for the future.  But those plans should evaluate risk and should not depend on assumptions that, for example, Federal funding will be obtained to pay for most of the cost, or that the economy will expand in a continuous upward trend.

Figure from Local in Ann Arbor, published 2010, showing city bond indebtedness

  • Avoid creating a “debt mountain”:  Many communities around the country (and a couple in our own county) have found themselves in dire trouble through incurring debt for what seemed a good idea at the time.  May I just mention the City of Ypsilanti?  And Sylvan Township is another example of disastrous misadventure (a story I hope to tell one of these days).  Ann Arbor has so far avoided outright disaster, but the trend is bad.  The figure to the right was prepared in 2010 and needs to be updated.  (The curve did not continue upward after that year.)  I consider taking on debt for large projects to be one approached with a good dose of caution, and only through necessity. I’ll be very skeptical of any scheme which requires bonding for large capital projects, of public-private partnerships that commit the city to expenditures, and of spending general fund money for studies leading to such projects.  I’m looking at you, Fuller Road Station.
  • Money is fungible:  We hear a lot about “buckets”.  But except for restricted funds that are dedicated, for example, to a ballot measure-approved activity, or are grant funds awarded for a particular purpose, money can be moved around from fund to fund, and should, when the circumstances require it.  It all depends on the priorities you have set. I’ll be open to re-examining the current organizational structure, including some enterprise funds, for budgetary purposes, especially when that structure does not serve our priorities.

Taxes

Last year, upon hearing of some draconian cuts proposed by the former (and unlamented) city administrator, Roger Fraser, I wrote three posts proposing that Ann Arbor should adopt a city income tax. (Post I   Post II  Post III)  These are still worth reading if you would like to dig really deep into taxation as a subject, and I stand behind my statement.  But if you’ve read Local in Ann Arbor regularly, you’d have noticed that I went silent on this subject.  That is because I no longer support a city income tax at this time.

One reason is, simply, that the city’s finances appear to have improved slightly.  The dire consequences being proposed have mostly not come to pass (except for severe cuts in police and fire protection).

Other reasons for my change of heart are the changes in Michigan tax law.

  • The credit for income taxes paid to cities has been removed.
  • Most retirement income is now taxable by the state.

Both of those changes mean that a city income tax would have a much broader impact on our citizens.  Previously, any taxpayer could recoup part of the city tax through the state tax return, and persons living primarily on retirement income would actually see a lower tax bill (because property taxes would be lower).  If we were to entertain the idea of an income tax now, there would need to be a new study that measured impacts on different classes of taxpayers.

But finally, my revised position is partly guided by concerns about the judgment of the current city council majority. To be fair, several of those who pushed a new expensive (and ugly) city hall addition onto the city are no longer on council.   But I’m uneasy about some future possibilities.

  • They seem to be leaning toward supporting a project to build a new train station on Fuller Park.
  • They appear to support the proposed transit plan that includes a highly capital-intensive connector system.
  • They stubbornly continue to insist on the Percent for Art program.
  • There are other straws in the wind, too poorly defined to go into right now.

In other words,  I’m not sure that the current council should be given a new pot of money to spend.

UPDATE: An issue looming ahead is the possible repeal of the personal property tax by the state legislature.  This is a significant point of policy as Ann Arbor attempts to attract new business and high-tech industry.  The PPT is a major source of income from those new businesses.  (It is a tax on equipment used by businesses; the name of the tax is misleading.)  We should evaluate actual revenue balances when issuing tax incentives to attract them, for example.

Percent for Art

In 2011, I wrote a three-part series on the Percent for Art program.  (Part I Part II Part III)

As I stated at (great) length in those and earlier posts, I believe that this is a bad program on almost every level.  Although the City Attorney has reportedly assured the council that it is legal, I am not convinced of this.  It is certainly improper. (See the first post linked above for an extensive discussion of legality.) It takes money that was levied (either by fees or taxes) specifically for basic utility or infrastructure programs.

The Percent for Art program has so many flaws that it would be comic, if public money were not involved.  For an excellent update on the current status of the program, see this article by the Ann Arbor Chronicle.  AAPAC commissioners are now complaining about the work load and suggesting that a full-time staff be assigned – at a time when our public safety staffing is at historical lows.   And this fund takes money (illegally, in my opinion) from the water utilities funds, which are paid for by user fees, at a time when those fees are being raised (see discussion by the Chronicle).

One of the disturbing aspects is that much of the product of this program seems pointless.  Though it is always risky to make aesthetic evaluations of art objects, some of their notable achievements have been a much-derided sculpture with a water feature that doesn’t appear to work, metal trees in a park where natural features are more welcome (and where the stormwater installation that helped to pay for the art didn’t work), a decision to put a chandelier where the public is restricted in access, and now they are discussing an artwork in a roadway roundabout, where surely driver distraction is not a good thing.

If elected, I will work to return those monies to the programs from which they were diverted.  I’ll also happily vote for a ballot measure whereby Ann Arbor voters can choose to support the arts through a millage.  Perhaps that could be written so as to support programs like FestiFools and even small festivals like Water Hill MusicFest.  Those are true expressions of a community artistic spirit. I’m happy to support public art, and even public funding of art, but the current program is just wrong.


The Future Face of Ann Arbor

Many of the issues that will be important in this council campaign apply to one central question: What will be the future face of Ann Arbor?

The present council majority and the Ann Arbor Downtown Development Authority have often taken a stance that could fairly be described as pro-development.  Does that mean that many of us who have opposed one project or another, or lobbied for open space in a particular location, are anti-development?  Not necessarily.   Rather, it is often a disagreement about the future course of the city, both how its physical environment (built and natural features) will be presented, and how the life of the city will revolve around and within that physical reality.

Don’t forget.  This is where we live.  What happens to the spaces around us affects our lives.  Ann Arbor is changing daily, and will continue to change, and that is just fine.  But the question of how it will change should be open to discussion.

There are several important initiatives afoot that will affect the future face of the city.

Connecting William Street is a project in which the DDA (by assignment from the City Council) is seeking to determine the best use for several city-owned parcels in the downtown.  I will be discussing this process in detail, and I favor a park or open public space on the Library Lot.

New task forces are being formed to examine other city-owned lots, especially those in the Allen’s Creek floodway, in the path of the proposed Greenway.  Here is a good recent review by the Ann Arbor Chronicle.  These include sites that have previously been discussed in several contexts, such as 415 West Washington, the First and William parking lot, 721 North Main.  I don’t currently have any position on the outcomes, but it will bear watching.

Note that we are talking here about city-owned land in both cases. Last year a group of citizens formed the Public Land – Public Process group as a basis for resistance to the plan to put a hotel and conference center on the Library Lot.  Here is a link to the statement of principles we devised.  I think it is pretty good and I still endorse these principles. The statement says in part:

When estimating the value to the community of the land and of a changed use, discussion should not be limited to extracting the top dollar value from the project. The city should not be acting as a venture capitalist or a dealer in real estate. Rather, broader public benefits must be considered. These would include enhanced services, enhanced local environment, and enhanced vitality of the area for residents and businesses.

Fuller Road Station is another example of public land being used for a new purpose, and one that has never really gotten adequate public review.  It was originally a joint project between the University of Michigan and the city, in which the first phase was basically a parking structure.  The UM pulled out of the parking structure agreement in February 2012 but some at the city are still talking about a train station at that location.  It looks from here as though part of the motivation is that there are other plans for the area where the current train station is located.  As the Ann Arbor Chronicle reported, some of those may be linked with development around the area of the MichCon site by the river.  I am already on record as opposing a new station at the Fuller Road site.

Not about city parcels, but still important to the face of Ann Arbor: the R4C/R2A report (here is a good summary by the Ann Arbor Chronicle) and whatever ordinance changes may result.  This could have major effects on the scale of new developments in the near-downtown neighborhoods and elsewhere.  Certainly we want to avoid another travesty like City Place.  (I commented on the history and meaning of this project several times: here was the last one.)

I’ll be examining these issues in more detail over the course of the campaign.  It is clear that Council will be making a lot of decisions in the near future that could determine the future face of Ann Arbor, and I’m on the side of the community in making them.  As Yogi Berra said, “If you come to a fork in the road, take it”.  We have to figure that one out.


The Transit Changeover: What Does It Do for Ann Arbor?

I’ve been following the changes in our city transit system, the Ann Arbor Transportation Authority, since 2008.  Much of that time I’ve been blogging about it, too.  For a listing of posts, see the Transportation Page in Local In Ann Arbor.

Surely, everyone has heard that AATA is in the midst of attempting a makeover from a city transit system based on Act 55 (but with service contracts outside the city) to a “countywide” (really regional) transit authority based on Act 196.  Everyone has also heard that this would entail a new countywide millage, currently estimated at 0.5 mills.  In a recent post I estimated, based on what I consider to be fairly reasonable assumptions, that this would mean Ann Arbor taxpayers would pay up to 75% of the taxes to support the new system.  (We already pay about 2 mills for support of the AATA and we’d add the new tax to that.)

So, aside from issues of fairness and possible benefits to Ann Arbor as an employment center (there are many such arguments to be made in favor of the new system), what benefits do we, as Ann Arbor residents, expect to get from the changeover?

This is getting to be a serious question because we are evidently coming in to crunch time.  Last night I attended the “District Advisory Committee” meeting for Ann Arbor.  I was appointed to this body a few weeks ago and our job is supposed to be to represent the interests of our district.  (I’ll leave the detailed explanation of why the DAC is completely ineffective till another day.)  We were tasked to read the entire 5-year transit service plan (big file).

So – I wrote a memo.  Here are the concerns I listed:

1. Finances: Ann Arbor residents (depending on assumptions) may be paying for up to 80% of this system. This means that costs and assignment of expenditures are of great consequence to us.

2. Level of service: Obviously, Ann Arbor residents would like to continue to receive transit service and there are a number of improvements that would be welcome.

3. Likelihood of system success or failure: Since our citywide transit system is at risk, any overreaching and excessive risk has the potential to harm our community over the long term.

I’ve been fretting and worrying over what I identify as financial risks and magic thinking in this matter for a couple of years.  But put those aside.  How about that level of service?

The “urban network” in the 5-year service plan, including Ann Arbor, Ypsilanti, and Pittsfield and Superior Townships. Click for larger to see bus routes.

What is proposed is improvements in the “urban network” of fixed-route buses.

Here are the benefits specifically proposed for Ann Arbor:

Sounds pretty good, doesn’t it? But on closer examination, most of these enhancements appear to be directed at the goal of getting commuters from outside Ann Arbor in and to the central area as efficiently as possible.  Here’s what I said about that:

The routes (even those within Ann Arbor) have apparently been prioritized on the basis of a central employment center (downtown and the University of Michigan). This follows the traditional wheel-and-spoke configuration that AATA has long used. But in order to make Ann Arbor truly independent of automobile travel for its citizens, we need better routes that take us to locations not in the downtown. For example, if one wishes to travel from the West side to the St. Joseph-Washtenaw Community College area, the time involved is almost prohibitive, given that it requires routing through downtown.

The major improvements listed are more park-and-ride lots (commuters), faster main commuter routes, and improvements along the Washtenaw corridor (primarily serving commuters from the Ypsilanti area).

Routes other than the commuter routes are still given minimal service. For example, my own local bus route (13), though shown as having a modest level of transit dependence, has no evening or weekend service.

There is more detail in the plan, but I’ll skip that for now except to note that most of the service improvements in western Ann Arbor are in new routes 8,9,10,11,12, 15 and 18.  Most of the bus stop enhancements are along Washtenaw, specifically tagged as part of the Reimagine Washtenaw initiative.   “Bus priority measures” refers to designated lanes for buses and so-called “queue-jumping” – as in rapid bus transit.  These will require reconfiguring some of our streets.  The main point is to make commuter routes more efficient.

So what do you think?  Aside from the wider community connectivity, etc. what benefits would we like to see for our own local bus system if we make the “transit transition”?


My Life in the Democratic Party

As I was luxuriating in the afterglow from submitting petitions yesterday (and thanks to my wonderful supporters, I turned in 158 signatures in only one week of collecting them), it suddenly hit me:  I didn’t happen to mention here that I am running as a Democrat!

So here it is, the official story.

I’m running for the nomination (City Council, 5th Ward) in the Democratic Party primary of August 7, 2012.

And yes, I’ve always been a Democrat and proud of it.  Here is a little of my history.

  • First vote: as a college student, voted for Lyndon Johnson against Barry Goldwater, 1964. (Students were not allowed to vote in local elections at that time, something I took note of).
  • First political contribution: to Eugene McCarthy in 1968 ($5, a significant fraction of my monthly income at the time).
  • First participation in a political process: knocking on doors for Hubert Humphrey later in 1968, after the antics at the Democratic convention tore the party apart.
  • First real sacrifice for politics: 1972, knocking on doors for McGovern in the midst of a doctoral research program (my professor didn’t really understand).  We also donated $200, which was nearly half a month’s income.
  • Vivienne Armentrout in graduate school at the University of Wisconsin, about 1975

    First movement into a Party organizational position (1976) while still in graduate school, knocked on doors to help elect Jimmy Carter.  My husband and I were named delegate and alternate to the Wisconsin state convention and later to the Governor’s electoral ball.  (No finery involved, it was very down-home.)

  • First serious responsibility in a Party office: In 1980, extreme frustration and unhappiness about Ronald Reagan’s changes to the American landscape drove me  into a congressional campaign office (our candidate lost in a strongly Republican district) and then, in 1982, to help reorganize the local Democratic club.  I became president of the North Shores Democratic club (North San Diego County) and built it into a strong regional organization, partly through assembling a list of Democrats who had been involved in various local campaigns.  Our candidates still lost but meanwhile my husband and I were delegate/alternate to the California State Convention in time to hear Nancy Pelosi assume the chairmanship of the party.  (She was great then too.)

When I first landed in Ann Arbor, I also immediately found a home in politics by working in a congressional campaign (he lost) and the council campaign for re-election of the first Democrat to represent the Second Ward on Council (Seth Hirshorn).  (He lost.)

At that time (late 80s) the City Council fluctuated in its partisan makeup, with Democrats sometimes in the minority, then ascending to a majority, with both Democratic and Republican mayors elected alternately.  I was a member of the Ward 2 organization and in 1992 assumed the role of Ward Chair.  At that time the Democratic ward organization was central in elections, turning out the vote and delivering candidate literature.  All of that stopped after Democrats became a permanent Council majority.  (I’ve recounted some of this recent party history in my Local in Ann Arbor blog.)

I was nominated as the Democratic candidate for Washtenaw County Commissioner, NW Ann Arbor in 1996 (the district number changed from 9 to 10 during my tenure) and was challenged by a Republican in 2000.  I’m a member of the Michigan Democratic Party.

So yes, I’m running as a Democrat.


Why I’m Running for Ann Arbor’s City Council (Fifth Ward)

Why am I running for City Council again?  Because Ann Arbor is my home town, and I care about it.  I want Ann Arbor to continue to be a good place to live, regardless of your age and income level.  I want all the qualities of a healthy, resilient community.  I want a city that is supportive of its residents, with (better than barely adequate) services delivered at reasonable cost.  I want to see a thriving economy that supports local business.

I first ran for Council in 2008 because I was concerned about certain trends (specific policy directions) that I believed would harm Ann Arbor’s quality of life and community, and burden us with debt.  Some of those trends have worked themselves out with time (and citizen action), and we are literally paying for some of the others.  There are a number of important decisions yet to be made in the future. They will help determine what kind of city we live in.

The current incumbent, Carsten Hohnke, has announced that he will not run for re-election. I want to give Fifth Ward voters a choice, not only about what person will fill this open seat, but about the direction that our city will take in the future.  I hope that the campaign will be an opportunity to discuss  current issues and also the picture (or vision, if you will) of what we want Ann Arbor to be.

In future posts, I will begin to address some of the main thrusts of the campaign.

I have written about some of these issues in my blog, Local in Ann Arbor.