The City Commission held a Recreation Study Session on May 22, 2024, prior to approving the millage language. The slide shown was part of a presentation given by City Commissioners and Recreation Director. While questions were addressed verbally during the session, the answers were not included in the presentation materials nor the minutes from the session. Although I attended, I honestly do not recall the response to the question, “Why aren’t my taxes enough?”
In looking into the history of how the city has funded our parks and recreation, I found a letter from the Finance Director included in the agenda for the Plymouth City Commission Budget Study Session on April 24, 2006. The letter provides insight into the financial history of the city’s support for recreation from fiscal years 1998/1999 through 2006/2007. Here are some key excerpts:
“In the early 1990’s and prior the city was subsidizing recreation with the equivalent of approximately 1 mill of support. That support was slashed from more than $ 249,000 in 95-96 to only $114,000 in 96-97 which is a new equivalent of .43 mills. That reduced millage rate was maintained a couple of years and then escalated up to .60 mills where it has remained since the 01-02 fiscal year. In 05-06 we ended direct depositing of .60 mills in the Recreation Fund and, in turn, replaced the revenue with an equivalent interfund transfer from the General Fund.”
“From a financial perspective, I have always had a concern regarding this fund because it is nowhere near self-supporting. We simply cannot charge enough to recover operational costs as well as share all of the capital facilities required to run the services we provide which is what would be necessary if this operation was being accounted for as an enterprise fund.”
It seems there has never been a long-term plan to support our existing recreational facilities, particularly the cultural center. As a taxpayer, I always assumed that part of my taxes went toward funding our recreation programs and facilities. Why wasn’t there an open public discussion on both the immediate needs and long-term plans for supporting these facilities and programs before deciding on a millage proposal? After all, how many of us would purchase a house we cannot afford to maintain?
To read the entire letter click this LINK.
The City Administration frequently cites the impact of the Headlee Amendment on revenue sources. There are always opposing forces to consider. The Headlee Amendment does limit the amount of property taxes local governments can collect and requires a “rollback” of the property tax rate when revenues from existing properties increase faster than inflation. Both provisions protect property owners by preventing excessive tax increases. Without these safeguards, local governments could raise more revenue without voter approval, simply due to rising property values. The Headlee Amendment also protects local government because the State can not impose new mandates, such the voting requirements approved by Michigan voters in 2022, without providing the necessary funding.
The result is that while the Headlee Amendment limits the tax increases, it does not prevent property taxes from rising. Instead, it serves to protect against excessive hikes. The City Charter requires the City Commission to adopt the budget for the next fiscal year no later than the second regular meeting of the Commission in the month of June. I reviewed the agendas from these meetings over the last ten years to analyze how property tax revenue has changed annually. The data, summarized below, shows that while the City is restricted in how much it can collect through property taxes, it is not entirely prohibited from raising taxes. It just means like the rest of us, the City must operate within its means.
