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Benton Harbor leaders have more convincing to do on income tax proposal

Lindsey Smith
Michigan Radio

Elected leaders in Benton Harbor have a lot more convincing to do if they want to get a city-wide income tax on the November ballot.

Supporters of the income tax proposal aren’t sure exactly what the rate would be or how the money would be spent. They have general ideas, but that ambiguity makes business owners nervous.

“If they really want to do something like this they really have to have the trust of the citizenry and the business community that they will, in fact, spend the dollars that they earn in the way in which they say that they’ll spend them,” said Pat Moody, Executive Director of the Cornerstone Chamber of Commerce.  

Moody wanted to read a statement from the business community at a town hall meeting about the proposal Monday night. The statement asks for a “concrete, detailed, itemized balance sheet that portrays an accurate picture of what kinds of dollars could be generated side by side with a reasonable, plausible, ironclad blueprint where precisely where that revenue would be spent.”

But Moody and others were told that the meeting was a chance to ask questions, not make statements. Benton Harbor commissioners hosting the meeting made presentations and then officials from the income tax department in Grand Rapids answered dozens of questions.

Jim Peterson has worked in Benton Harbor for around 30 years, but he doesn’t live there. He’s upset he would still be required to pay the income tax.

“They’re taxing me and I have no representation here. No one is accountable for what they’re doing with my money,” Peterson said.

Peterson’s not convinced the income tax is legal, even though more than twenty other Michigan cities have one. He asked how a city could tax people without fair representation.

“I tax them,” John Schaut said dryly. Schaut heads the income tax department in Grand Rapids.

That prompted a mix of laughs and dirty looks from the crowd. Peterson uttered something about King George III and was scolded for interrupting the meeting out of turn. After that, he left early.

“This fella wasn’t out of order for making a mockery out of a reasonable question,” Peterson said of Schaut, shaking his head in disbelief, "I was out of order for pointing out why he shouldn’t make a mockery out of a reasonable question.”

Peterson said there are plenty of people like him who are having a hard time making ends meet. He says Benton Harbor needs to live within its means and get people back to work if they want to turn the city around.

Benton Harbor has been under the control of a state-appointed emergency manager for three years. Elected city leaders hope an income tax will allow them to pay off long-standing debt and regain local control. The emergency manager has not taken a public position on the proposal.

Commissioner Marcus Muhammad says most residents seem supportive of the proposal. He says the biggest challenge to getting it on the November ballot is time.

The next town hall meeting is set for July 27th.

Lindsey Smith helps lead the station's Amplify Team. She previously served as Michigan Radio’s Morning News Editor, Investigative Reporter and West Michigan Reporter.
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