Voters in Mount Clemens face a difficult choice on Tuesday: Approve a big property tax increase or risk a state takeover of their city.
The recession of 2008 cost Mount Clemens more than a quarter of its property tax revenues. The city also saw a more than 40% drop in state revenue sharing between 2000 and 2012.
Robert Bruner is Mount Clemens' interim city manager. He says the city has only been able to balance its books in recent years by slashing employees and by dipping into the city’s reserves which are now nearly gone.
“There’s really not much juice left to squeeze out of city hall,” says Bruner.
Last month, the credit rating business Moody’s downgraded Mount Clemens’ bond rating from Aa3 to A2. Moody’s cited the "notable depreciation” of the city's tax base, “limited revenue raising flexibility, and underfunded benefit pension liabilities.”
Bruner says if voters don’t approve a five mill increase on Tuesday, the city may not be able to pay its bills in the near future.
“This type of charter amendment can only go on the ballot once every two years if it fails,” says Bruner, “So this is the community’s last chance to approve a charter amendment before the city runs out of cash in 2017.”
If that happens, Bruner says Mount Clemens may find itself in a “financial emergency” and that may lead to state intervention.
Mount Clemens voters have rejected three previous efforts to increase property taxes, the last time two years ago.
If it passes this time, the average Mount Clemens homeowner would pay an additional 20 dollars a month in property taxes.
If voters says ‘no’ to the millage increase, a consultant for the Southeast Michigan Council of Governments recommended the city should go to a four day work week and try to reopen contracts with city unions with hopes of reducing pay by 15%. The consultant also suggested negotiating with city retirees to reduce legacy costs.
