Patterson’s proposed budget seeks tax cut

Mike Martindale
The Detroit News

Pontiac — Higher pay for county workers, a tax cut for homeowners and more money for capital improvements were part of the Oakland County executive’s budget proposal presented Thursday.

L. Brooks Patterson’s proposed three-year budget calls for an additional 0.05 mill tax cut, dropping the current millage rate to 4.04 mills, Laurie Van Pelt, director of management and budget for the county, told the Board of Commissioners.

The cut is the second part of a 0.15 mill property tax reduction Patterson announced in his 2015 State of the County speech. Commissioners passed a 0.10 mill decrease this past spring for the summer tax bills. Patterson’s budget plan calls for implementing the additional 0.05 mills tax cut.

“Oakland County’s future is bright. Employment is up, housing starts and prices are up, and the entrepreneurial spirit is alive and well,” Patterson told commissioners Thursday morning.

The county’s general fund budgets for fiscal years 2016-18 are approximately $429 million, $437 million and $442 million respectively. The total budgets are $825 million, $832 million and $835 million.

Patterson, the county’s top elected official since 1993, said the county’s fiscal policies and its “triennial” budget plan have put it on track to rebound even more over the next three years, during which management will continue to post a balanced budget.

Commissioner Dave Woodward, D-Royal Oak, said he is not in disagreement with some of Patterson’s proposal but would like to see the budget address concerns of more citizens. He said Patterson’s proposed tax cuts are “insignificant and only provide about $3 for the average homeowner.”

“Too many working families in Oakland County are not feeling the healthy economy,” Woodward said. “Improving our roads, and the public health of Oakland County families need greater investment than in the recommended budget.”

Woodward said in coming weeks he and other Democratic commissioners want to discuss how to increase pothole repairs and obtain new road funding; expand dental care to all children in the county; and provide additional tools for economic development.

“Oakland County can do more so more working families feel the benefits of the strengthening economy – and we should,” he said.

Much of Patterson’s budget proposals dovetail with forecasts earlier this year from University of Michigan economists Dr. George Fulton and Donald Grimes, whom county officials paid for a fiscal overview. The economists are predicting about 49,000 new jobs will be added in the county between 2015-17.

The top emerging sector jobs are in fields such as advanced electronics, alternative energy, communications and information technology, health care, robotics and finance.

Pay for county employees has trailed the labor market for years and Patterson noted that since one-third of the county’s workforce is expected to either retire or move on within the next five years, steps need to be taken to recruit and retain skilled employees. Patterson proposed, beginning in October, a series of salary increases over the next three years: 3 percent for fiscal year 2016; 2 percent for fiscal year 2017 and 1 percent in fiscal year 2018.

He also wants to reinstate a county match of up to $300 a year for a voluntary deferred compensation plan effective next January, which is separate from the county’s defined contribution retirement plan. The county ended traditional retiree coverage for new employees in 2006, but Patterson also wants approval to increase a Retiree Health Savings plan from $50 to $75 bi-weekly.

Patterson also wants a $4 million increase in the county’s building improvement fund, from $1.5 million to $5.5 million. The county only made essential improvements during the recession, but Patterson said now is the time to increase building security and make repairs that have been deferred.

The county of more than 1.2 million residents has a 4.1 percent unemployment rate, which is below Michigan’s 5.5 percent unemployment rate and the nation’s 5.3 percent rate.

He said private industry job growth was aided by county economic development programs such as the Emerging Sectors and Medical Main Street commitments.

“Since the inception of Emerging Sectors in 2004, there have been 337 successful Emerging Sector endeavors with new investments of $3.05 billion and creation 35,106 jobs,” Patterson said.

Since Medical Main Street initiatives were launched in 2008 “nearly 50 companies have invested close to $1 billion to create or retain 8,000 jobs,” he said.

Patterson also credited the county’s Automation Alley economic development initiative, started in 1999, and which “in 2014 reached a half-billion dollar mark in export sales and completed its 23rd trade mission.”

The group announced plans this week to explore investment potential with Cuba.

After years of record-setting foreclosures and declining property values, Oakland County’s tax base stabilized in 2013 with an assessed value increase of 1.16 percent countywide. Assessed value increased 7.11 percent in 2014 and 10.39 percent in 2015 — the largest increase since 1999, Patterson said.

Sheriff’s deed foreclosures continue to drop and while 1,500 are estimated this year that’s the lowest level in a decade.

“The approximate market value of property within Oakland County is $121.6 billion, the highest value of all 83 counties in Michigan and 15 percent of the state’s total property value,” he said.

From 2013-14, the average price for a home in Oakland County increased by 7 percent, from $193,508 to $207,110, he said.

Patterson said the county has been able to maintain its AA bond rating through tough economic times.

“We in Oakland County have much to be proud of,” he said. “Tough decisions have been made over the past several years to ensure long-term financial sustainability for the services that we provide to our citizens. ... While this budget recommendation is more optimistic in comparison to the past several years, our challenge is not yet over.”

Budget hearings begin next Thursday by the Finance Committee. The full board is scheduled to vote on the budget Sept. 17.