Group sues city to stop tax

Anti-tax lobby files suit with city over language on November's ballot

Thursday, October 4, 2007
BY DAN DUCHENE
Ypsilanti Courier Staff Writer

The anti-tax campaign group, Stop the City Income Tax, has filed a lawsuit with the city of Ypsilanti.

Joining SCIT in the suit are City Councilman Brian Robb, D-3rd Ward, Mayor Pro-tem Trudy Swanson, D-1st Ward, and former Ypsilanti Mayor Peter Murdock.

Deputy City Clerk Ed Golembiewski confirmed the city had received a summons this afternoon. He said he could not comment on the complaint.

Steve Pierce, a member of SCIT, said the lawsuit was filed early on Friday at the Circuit Court in Ann Arbor. He said Timothy Connors was assigned to the case, but no hearing dates had been decided. SCIT member Cameron Getto, of the Detroit-based law firm McKeen and Associates P.C., will be representing the plaintiffs in the suit.

Pierce said the suit is being filed over the ballot language for the income tax question, scheduled for November's election.

"The language is biased and illegal," he said. "It talks about things that are not being voted on and future events that we don't know are going to come to fruition."

Both Pierce and Getto said there is case law to back up their claim. The complaint also points to the Michigan Home Rule Act.

Pierce said the Home Rule Act requires municipalities to adopt and treat all ballot questions as if they were charter amendments. He said the law requires three-fifths, or 60 percent, of the vote by Council to adopt language. Four-sevenths, or 57 percent, adopted Ypsilanti's language. He said the vote would have needed to be rounded up to five in favor to meet the requirements.

They didn't have five (votes), they had four," Piece said. "They're not following the state law."

Getto said the lawsuit is asking the election to be stopped or the language to be changed plus any court or attorney fees. He said he expects to file for a preliminary injunction by the end of next week, and hopes to go to trial by mid-October.

Ed Koryzno, Ypsilanti's city manager, said the ballot language for the income tax question followed the same structure as the Ypsilanti Public School's ballot measure in August. He said John Barr, the city attorney, had reviewed the complaint.

"I'm looking at it," Barr said.

When asked if the city plans to fight the complaint, Barr said he takes his direction from City Council and Koryzno.

"I intend to protect the interest of the city," he said.

"They are saying 'we don't think this ballot language is fair,' " Barr said. "This is a fact question. It is an opinion question. The judge will have to determine if this language is fair."

As far as the illegal adoption by City Council allegation, Barr said he believes SCIT's interpretation of the law is inaccurate.

"This is not a charter resolution," he said. "This is an income tax question that requires the vote of the people."

Another complaint made by SCIT was a City Council resolution passed last month, which maintained the city's long-toted stance that the budget must maintain a 10 percent fund balance to remain fiscally solvent. Members of SCIT said the resolution contradicts the ballot language because city staff has presented budget predictions placing the city's spending dipping below the 10 percent threshold in 2013 with an income tax.

"I think it's a stretch," Barr said. "What difference does that make?

"That doesn't affect the ballot language one bit," he said. "They really don't have anything to do with another."

Contact Staff Writer Dan DuChene at 697-8255 or at dduchene@heritage.com.

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Ypsilanti Chamber and EMU Student Government both say NO to the City Income Tax

Wednesday, October 3, 2007
SCIT PRESS RELEASE

(Ypsilanti, Michigan  October 3, 2007) The Ypsilanti Chamber of Commerce has recommended a No Vote on the November 6th City Income Tax ballot proposal. This is the second vote the Chamber has taken on this important policy issue and the result was still a resounding no.

The Chamber said “the City Income Tax doesn’t represent the long-term economic best interest of the Chamber membership.” The Chamber went on to say the City Income Tax, “would be economically difficult to impose such an income tax.”

The Eastern Michigan Student Government Senate also voted this week to Support the No campaign and oppose the City Income Tax. Senator Sam Cash in his presentation to the student senate said, “The City Income Tax unfairly targets students and employees and doesn’t solve the problem.”

Students and business leaders have both figured out the City Income Tax is not a plan. It is a recipe for disaster said one downtown merchant at a recent Income Tax forum.

In the last three years of the so-called “Six-year Temporary Income Tax”, the city’s own solvency plan slashes employees and still has a $3 million dollar deficit while saddling city residents with the highest property taxes in the County.

“The City Income Tax just kicks the can down the street”, says former Ypsilanti Mayor Pete Murdock, “leaving the problem for someone else to fix. The problem is, even with a City Income Tax, the city is spending more than what they are taking in and Lansing is not going to bail out the city for continually over spending their budgets.”

The Chamber of Commerce and EMU Student government join an ever growing list of Ypsilantian’s opposed to the City Income Tax and we publicly thank them for their support and courage to speak up on this important issue.

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Why are you opposed to a city income tax?

Wednesday, October 3, 2007

First, the city income tax would create another barrier to investment in the city. The city, with the highest property tax rate in the county, and one of the highest in the state, is already struggling to attract new business and investment. An additional tax in our city of four square miles would further discourage investment and reduce property values as surrounding communities would have a competitive advantage.

Second, the city income tax is a huge tax increase, increasing the city's local tax revenues by nearly 50 percent and placing an added burden on our residents who are struggling under the hard economic times that confront the entire state of Michigan. According to the mayor, the average household in the city would see their city taxes increase by 35 percent and one to one-half times greater than the city taxes in Ann Arbor as a percentage of household income.

This huge tax increase comes on top of automatic increases and the pop-ups of Proposal A, as well as an increase of more than five mills in city taxes over the last five years. This has caused a shift of the tax burden to residents, which in the last six years, has resulted in a 60 percent increase in residential property taxes to the city.

This increase is far greater than inflation and far greater again than any wage increases seen by city residents.

Third, none of the problems cited by the proponents of the city income tax are solved by city income tax. Not the issue of state shared revenue; not the issue of Eastern Michigan University's tax exempt status, not the issue of inequities in Proposal A or Headlee, or the rapidly rising increases in legacy costs.

In fact, under the solvency/tax plan, the city continues to spend more money than it takes in and, in the "final year" of the "temporary" city income tax, the city has a deficit of $3.6 million and has wiped out the nearly $2 million currently in reserve.

The city's so-called "plan" just kicks the can down the road and puts off any real decisions for others to make.

Written by Brian Robb and Steve Pierce for The Stop City Income Tax Committee. For more information, visit www.stopcityincometax.com.

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Anti-tax group sues city

Argues language of law, practices unfair to voters

Monday, October 1, 2007
BY JAMES CAVANAUGH
Eastern Echo Staff Writer

Last Thursday, the group Stop City Income Tax filed suit against the City of Ypsilanti in the 14th circuit court for Washtenaw County.

At issue is the language of the proposed city income tax, to be voted on this November. If passed, those living in Ypsilanti would have to pay a 1 percent income tax. Those who only work in Ypsilanti will face a half percent income tax. The ballot language states the tax, if passed, will go into effect on July 1, 2008 and end on July 1, 2014.

Stop City Income Tax was formed in December 2006, specifically to stop the possibility of an income tax in the City of Ypsilanti.

SCIT lays out two main complaints in its suit against the city. First, they claim the text of the ballot itself is illegal. SCIT said the language is too vague and too speculative in that it makes too many assumptions based on projected future revenue.

Second, they believe the decision to place the tax on the ballot violates Michigan's Home Rule Act. SCIT accuses the city of violating section 117.21(5) of the act where it states, "Propositions and questions shall be proposed, initiated, and canvassed in a manner similar to that provided for charter amendments."

Amendments to a city's charter require a 3/5 (60 percent) vote of the council before they are put before the city for a vote. Four of the council's seven members voted to place the tax proposal before the voters 4/7 (57.14 percent.)

Two City Council members, Brian Robb, D-Ward 3, and Mayor Pro-tem Trudy Swanson D-Ward 1, have joined SCIT in their suit against the city.

"The city should not be advocating one side of the issue or the other and the city cannot have ballot language that violates state law," Robb said.

City Attorney John Barr takes issue with some of SCIT's claims. Specifically, he disagrees with SCIT's assertion that the city crafted the ballot language in an unfair manner.

"City council believed they weren't hoodwinking the voters," Barr said.

Barr also disagrees with SCIT's claim that the income tax equates to a charter provision. "This [tax proposal] is not a charter provision, this is an ordinance," he said.

Steve Pierce, a member of SCIT, disagrees with Barr's statements. He said the ballot language is too editorialized and thusly, it violates the law, Pierce asked, "Why does it take a bunch of citizens to stand up and say follow the rules?"

Cheryl Farmer, co-chair of the Campaign for Ypsilanti's Future and former mayor of Ypsilanti did not specifically comment on the suit, but did say, "I hope we pass this temporary tax, because I think it's important for our future."

The fate of the ballot proposal remains unclear at this point. According to Barr, the city has 21 days to file a response to the suit. After that, the judge assigned to the case, Timothy Connors, will decide on how to continue.

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Lawsuit: Ypsilanti tax ballot misleads Two council members join filing against city

Saturday, August 18, 2007
BY KHALIL E. HACHEM
News Staff Reporter

An Ypsilanti group fighting a proposed city income tax filed a lawsuit against the city this week, charging that the ballot language is biased, misleading and violates state election law.

Joining the suit with the Stop City Income Tax group were Mayor Pro-Tem Trudy Swanson, D-1st Ward, Council member Brian Robb, D-2nd Ward, and former Mayor Pete Murdock. The suit was filed in Washtenaw County Circuit Court Thursday.

The plaintiffs are asking the court to declare the ballot proposal invalid, order the county clerk to withhold the ballot language and amend it.

The tax issue is set to appear on the Nov. 6 ballot, and all ballots must be printed by Oct. 17.

"We always thought that the ballot language was editorializing,'' Murdock said. "It should be a straight-up question of yes or no.''

Mayor Paul Schreiber said the tax ballot language was modeled after the Ypsilanti Public Schools bond ballot question. He said the language gives voters the information they need to make an informed decision, and it was approved by City Attorney John Barr.

Barr said he has not reviewed the lawsuit carefully, but said the ballot language does not create prejudice. He called the group's allegations simply an opinion.

The city is asking residents to vote on a 1 percent income tax on Ypsilanti residents and businesses, and a 0.5 percent tax on nonresidents who work in the city. The proposal includes several exemptions and would reduce property taxes by 2 mills. The income tax would end in six years.

Among the charges made in the lawsuit:

The ballot language is biased for including certain exemptions that influence voters in favor of the tax. The ballot language makes reference to items not being voted on, such as the millage rollback, the lawsuit says.

The ballot language predicts future consequences if the proposal fails - such as the effects on revenue, expenditures and level of services.

A recent resolution adopted by the city to maintain a 10-percent reserve causes the ballot language to be false, misleading and inaccurate. According to the suit, the city is telling residents if they pass the tax, services won't be cut, but if the city wants to maintain a 10 percent reserve, it would have to make spending cuts in 2011.

The city violated the Michigan's Home Rule Act when the council approved the ballot language by a 4-3 vote, when a 5-2 vote should have been needed because the proposal is similar to a charter amendment.

Barr countered that the reserve resolution was adopted after the ballot language was approved. "I'm having hard time seeing how that is going to affect having an income tax vote,'' he said.

Barr also said the ballot issue is not a charter amendment and only requires a simple majority vote.

Swanson has voiced opposition to the tax because she said residents are paying enough taxes. "I would like us to look at other avenues,'' she said.

No hearing date has been set for the case.

Khalil E. Hachem can be reached at khachem@annarbornews.com or 734-482-3225.

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Big mistake to ban marchers

Thursday, August 23, 2007
BY KATHLEEN CONAT
Ypsilanti Courier Special Writer

The Heritage Festival's sudden ban on the Stop City Income Tax political action committee from marching in the parade was a misstep that has cost the festival and the City in negative publicity, ill will, and suspicion of bending City laws.

I don't pretend to know the thought processes that led the festival committee to first accept SCIT's entry then, at the last minute, reject it. That really doesn't matter anymore unless, as some suspect, City leaders put pressure on the committee to deny the entry.

What matters is that the story of SCIT's rejection has spread across the State. It makes Ypsilanti appear to be run by a Tammany Hall-style, Boss Tweed operation.

Had the committee rejected the application in the first place, this probably would not have been a big deal. It only became one when the group was contacted last Wednesday evening and told they couldn't march.

Understandably, the would-be participants were upset. They had spent a great deal of time and effort on this and spent money on shirts, signs, and costumes.

Now, the SCIT people did march in the parade after all. Another group allowed them to wear their shirts and costumes and carry their signs and they were a big hit along the parade route.

But, the whole brouhaha brought out an opinion from Assistant City Attorney Karl Barr with which I must take issue.

In this opinion, Barr said the committee's decision to reject SCIT's entry was not a violation of the City's Human Rights Ordinance because it did not fall under the area of "race, color, religion, national origin, sex, sexual orientation, age, marital status, having a disability, familial status, educational association, source of income, height or weight."

But Barr ignored the first part of the paragraph that reads, "It is the intent of the City that no person be denied the equal protections of the laws; nor any person be denied the enjoyment of his political rights or be discriminated against because of " all those things listed above.

That's correct: "civil or political rights." It's been a time-honored tradition in this country, going back well before it was, in fact, a country to publicly demonstrate one's political position. It is, regardless of what Barr says, a right and one of the most strongly supported ones in history.

In addition, the festival committee, which had to get a permit for the parade, appears to be in violation of this ordinance by its rule that says, "Units sponsored by or depicting a political or controversial issue will not be permitted in the parade.

If the festival committee chooses to follow Mr. Barr's opinion and its own rule in the future, it needs to ban all elected officials, including the mayor, City councilpersons, local school boards, and judges. Because, let's face it, all of them are politically motivated to be there. They can't selectively choose who will be allowed to show up.

Or, someone could actually ask for a legal ruling on whether Barr's interpretation of the ordinance is correct, because I believe a good argument could be made that it's not.

And lest anyone believe the matter should be dropped, let me remind them that unless that opinion is challenged it will stand. The festival parade committee will be able to bar any group just by saying it is controversial and/or political.

I think we all knew that there would come a challenge to our Human Rights Ordinance. But I, for one, never imagined it would be the City itself that tried to weaken it.

Kathleen Conat is a long-time Ypsilanti resident and freelance writer for The Courier. She can be reached through editor@ypsilanticourier.com.

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Anti-tax group kicked out of parade

Saturday, August 18, 2007
BY KATHLEEN GRAY
Free Press Staff Writer

Some Ypsilanti residents were looking forward to marching in the parade this morning with the city's leaders, the marching bands, even the LaLeche League and the guy who wants to raise chickens in the city.

But their group, Stop the City Income Tax, has been pushed to the sidelines of the Ypsilanti Heritage Festival Parade.

Their crime: advocating a political or controversial issue, a violation of Rule 7 of the parade guidelines.

Stop the City Income Tax is opposed to a proposal on the Nov. 6 ballot that would impose a 1% income tax on Ypsilanti residents and a 0.5% income tax on nonresidents who work in the city.

The group won approval to be in the parade earlier this month from the Ypsilanti Jaycees. So members spent about $750 on banners, costumes -- barrels and British Revolutionary and Paul Revere gear -- and bright red T-shirts with the logo "The taxes are coming ... The taxes are coming."

But the Campaign for Ypsilanti's Future, which supports the tax, isn't in the parade. So Stop the City Income Tax is out.

Still, the action won't stop members from wearing their T-shirts and jumping in with a neighborhood association that's still in the parade.

"This is about free speech," said member Steve Pierce. "If they order us off the street, we'll step aside."

Parade organizers didn't return phone calls seeking comment.

Contact Kathleen Gray at 313.223.4407 or gray@freepress.com.

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Anti-tax group banned from parade

Members plan to march anyway

Saturday, August 18, 2007
BY KHALIL E. HACHEM
News Staff Reporter

A group that opposes a city income tax proposal was banned from participating in today's Ypsilanti Heritage Festival parade, after initially being approved by festival organizers.

Festival co-coordinator Lynda Hummel said the group was signed up by mistake. Festival rules exclude groups that represent political or controversial issues, she said.

"The city income tax is ill-advised and would be bad for the city ... residents and businesses,'' said former Mayor Peter Murdock, who announced formation of the group Thursday at the downtown branch of the Ypsilanti District Library.

"It was an error, and we feel very badly about it,'' Hummel said.

Steve Pierce, a member of the Stop City Income Tax group, said the tax is a public issue but not necessarily a controversial issue.

Pierce said his group applied for a spot in the parade several weeks ago and it was approved on Aug. 9. The group ordered costumes and T-shirts, made signs and invested many hours preparing for the parade, he said.

"We made no secret about our entry,'' he said. "And we spent a lot of money.''

Organizers informed the group on Wednesday that they could not be part of the parade, Pierce said.

Hummel said the mistake was discovered when organizers were reviewing the list of participants. "It was a huge error on our part,'' she said.

Pierce said the decision is a violation of the group's rights under the city's nondiscrimination ordinance.

Assistant City Attorney Karl Barr said the decision is not a violation of the city's ordinance because political groups are not protected by the ordinance, which includes race, color, religion, national origin, sex, sexual orientation, age, marital status, having a disability, familial status, educational association, source of income, height or weight.

"We're not talking about a protected class,'' Barr said. "This is a political group over a political issue.''

Pierce said group members plan to march in the parade with one of the neighborhood associations but without a banner. "We will be there,'' he said.

The parade takes place at 10 a.m. today through downtown Ypsilanti toward Riverside Park where the three-day festival is held.

City residents are scheduled to vote on the income tax issue in November.

Khalil E. Hachem can be reached at khachem@annarbornews.com or 734-482-3225.

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Ypsi prepares for income tax

Possible increase to be included on fall ballots

Friday, March 9, 2007
BY LUCAS WILSDON
senior Staff Writer

The Ypsilanti City Council is considering whether or not to include a city income tax on Ypsilanti voters' ballots in August or November.

"The tax ballot question has not been put in front of voters yet," Mayor Paul Schreiber said.

The proposed city income tax would include a 1 percent increase for all residents' wages, and a .5 percent increase for non-residents' wages, both intended to help close Ypsilanti's annual budget gap of $2.5 million. The tax is projected to expire five years after it is initiated.

A group of concerned residents has voiced anxiety about the negative affects the tax would have on the community.

"Basically the city income tax would make our city less attractive to investment, business development, home ownership, employees and renters," said Pete Murdock, head of Stop City Income Tax, a group organized to inform people of the tax.

Average household taxes in Ypsilanti would rise 30 to 35 percent as a result of the implementation of this tax, according to SCIT's primary press release.

"We are letting people know that there is an organization formed in opposition to this tax," Murdock said.

Schreiber and Murdock said the income tax is ultimately up to the voters of Ypsilanti and the city council merely has the power to put it on the ballot.

Murdock cited the fact many cities across the country ? already with an income tax in place ? are not faring much better than Ypsilanti, and the residents of Ypsilanti need to do what is in their power to defeat the tax increase.

Murdock said the Eastern Michigan community should be particularly aware of the possibilities of a city income tax. He said all workers at EMU would be subjected to the tax increase, whether they live in Ypsilanti or not.

"EMU would pay no extra taxes ? but EMU employees would," Murdock said.

Schreiber said the issue of an income tax would be the basis for the upcoming budget discussions among city officials.

"The state of Ypsilanti is strong, although the city remains financially challenged," Schreiber said in his mayoral update on Feb. 25. "Ypsilanti, however, is facing a dire financial crisis."

City council has appointed the Blue Ribbon Finance Committee to address the financial challenges facing the city. The committee recommended city council appoints the accounting and management-consulting firm Plante-Moran to evaluate the feasibility and potential of a city income tax.

"The city of Ypsilanti does face a long-term structural finance challenge," the committee said in its report submitted to city council on June 15, 2004.

The amount of city land not subjected to property taxes, and continued declines in state revenue sharing, were among some of the prominent causes to Ypsilanti's financial situation, according to the committee's report.

A "less than full recovery of costs" for fire, emergency and hazardous material services for EMU and other state supported services was also one of the causes listed among several others.

The finance committee also cited an city income tax may offer an opportunity to more effectively provide revenues to the city from those who benefit from city services, but who are not subjected to property taxes or other fees.

"We are mindful that, if an income tax were imposed, we should not view an income tax as a means for overburdening current or future residents of the city," the finance committee said in their final report to the city.

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Foes plan fight of tax issue

Proposal faces opposition from Stop City Income Tax

Friday, February 23, 2007
BY KHALIL E. HACHEM
News Staff Reporter

A group of Ypsilanti residents is organizing to oppose a proposed city income tax months before the issuegoes on the ballot.

The group on Thursday announced the formation of Stop City Income Tax, a ballot committee to oppose the tax. The group includes business owners, residents, a union representative and Council Member Brian Robb, D-Ward 3.

"The city income tax is ill-advised and would be bad for the city ... residents and businesses,'' said former Mayor Peter Murdock, who announced formation of the group Thursday at the downtown branch of the Ypsilanti District Library.

Murdock said the tax would deter residents and businesses from relocating to the city. He said communities that have an income tax are facing the same financial challenges Ypsilanti is dealing with.

Ypsilanti has been struggling to balance its budget for several years. The council eliminated its recreation department in 2003 and reduced fire and police services. It approved a plan last year to trim more than $1.5 million over three years and reduce jobs and services.

The City Council is planning to ask residents to vote on the income tax either in August or November.

Mayor Paul Schreiber said the tax is being considered because the city council is facing either cutting services or increasing revenues. He said state assistance is shrinking and the cost of delivering services is increasing. The former Visteon plant, the city's largest taxpayer, is scheduled to close next year.

"I understand that residents do not want the tax,'' Schreiber said. "But how are we going to pay for the services?''

Joe Lawrence, a rental property owner who was one of about 20 people at the library Thursday for the announcement, said the city ought to look at different methods to save money, including regionalization and combining services.

Robb, the third ward councilman, ran for election in November opposing the tax. He said the city needs to get past the tax to solve its problems.

The council formed a special committee a few years ago that recommended a 1 percent income tax on residents and a one-half percent on nonresidents and corporations. The proposal also calls for a 2-mill reduction in the city property tax and ending the income tax in five years. The tax is expected to generate about $2.5 million a year. The city's budget is about $14.4 million.

Council Member William Nickels, D-Ward 2, said he is not surprised that the anti-tax group has formed.

"This is the way all of the information will get out there,'' Nickels said. "The residents will have to listen to both arguments and make a decision.''

To reach the city, call 734-483-1100. To reach the anti-tax group, call 734-557-4080.

Khalil E. Hachem can be reached at khachem@annarbornews.com or 734-482-3225.

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Ypsilanti Area Chamber of Commerce City Income Tax Public Policy Call To Action

Wednesday, September 27, 2006

After many months of review and interviewing and receiving responses from our Chamber Members, the Public Policy Committee has prepared for Chamber Board approval, a Call to Action.

We have interviewed and received responses from over 70 of our member companies located in the city, as well as from business persons who are not members, but have businesses located in the City of Ypsilanti. It should be noted that some of these who have responded are non profits who say that it would be very difficult for them to find and keep employees with this additional tax imposed on them. Of the Ypsilanti Businesses that have responded, 100% are on record as being opposed to the City Income Tax.

Also, it is very difficult to find anyone who says that a City Income Tax will solve the financial problems of the city. In addition, we have not found any city in the State of Michigan with a city income tax that is doing well. Most are experiencing job loss with companies moving to the surrounding areas where the income tax is not a factor. In most cases the cities that have the City Income Taxes are surrounded by prosperous smaller towns, villages, and townships, while the cities continue to lose jobs and tax base.

With the position we are recommending, we are strongly suggesting that it is our responsibility to work with the City of Ypsilanti to help find solutions to the financial problems of the city. We will work with the city to look for alternatives, consolidation of services with surrounding communities and the county, work with the State and Federal Government to find additional funding or to encourage full funding of state promises to local communities (Fire Protection Funds, etc.).

In addition we will work toward economic development and attracting new companies to our community. To this end we will work with the city to help make it as easy as possible for new companies to locate here. We must make sure that roadblocks are removed that hinder companies from locating in the City of Ypsilanti.

The CALL TO ACTION: We the Board of the Ypsilanti Area Chamber of Commerce, representing over 625 businesses in the Ypsilanti area, are opposed to a City of Ypsilanti Income Tax. We feel that the City Income Tax is not the answer to the short or long term problems the City faces. Instead we will work with the City to find solutions for the financial problems and challenges it currently faces and future financial needs.