Hazel Park and Eastpointe are forming an authority that would allow them to seek 14-mill tax increases for fire protection. They should ditch that idea and try to find savings elsewhere.
The Oakland County and Macomb County communities are miles apart geographically, so funds from the tax hike would go directly to the respective local governments.
The authority would not coordinate any consolidation or sharing of services between the cities.
According to a 1988 state law, communities can form such authorities and seek up to 20 mills for public safety.
The authority is deceptive way of allowing municipalities to go beyond their statutory tax limits. Cities must restrict their general fund levies to 20 mills or less. Eastpointe’s general fund rate is 19.17 mills and Hazel Park’s about 19.5.
Exploring ways to save taxpayers money is a better idea. Forming such an authority as an avenue for a large tax increase isn’t fair to residents. Police and fire protection should be basic services financed through regular taxes, not extra millage levies.
Although the cities can form an authority on their own, they must get voter approval for any tax boosts to take effect. City officials are looking at the Feb. 24, 2015 election.
Before supporting any tax hike, residents should be convinced that their local governments have exhausted all other means of cost savings.
Both communities have already made some efforts to save money.
Eastpointe has privatized public works. It has joined Roseville and St. Clair Shores for 911 dispatching services. Also, Eastpointe has formed a new recreation authority with Roseville after both communities eliminated their individual departments.
Standard and Poor’s, a national municipal rating service, has even described Eastpointe’s 2014 financial management assessment as “strong,” upgrading it from “good.”
Officials from both communities say their staffs have been cut over the past few years and those remaining have taken wage decreases. Also, employee and retiree health care benefits have been modified or eliminated.
Eastpointe City Manager Steve Duchane and Hazel Park City Manager Edward Klobucher say they’ve investigated consolidating services with neighboring communities and also looked into contracting with their respective county sheriff offices for police services. The city managers claim these measures wouldn’t save any money.
But that’s hard to believe.
The communities decided to form an authority because each needs about 14 mills to balance their budgets, although the specific financial effects will vary.
If the millage is approved, Klobucher says Hazel Park would reduce its 9.8 mills approved for police and fire services in 2011 to 2 mills for just the police. Other general fund money would be used to support the police department while the 14 mills would go to the fire department.
In Eastpointe, the 14 mills would bring in about $5.9 million and erase a general fund deficit of about $4 million.
Officials say tax revenue has drastically dropped because of plummeting property values. They warn of deep cuts if the millage is not approved.
But if the cities can find savings through consolidation and shared services, then this kind of tax hike can be avoided.