Kalamazoo has struggled with balancing its budget, and finding enough money to invest in new programs.
Mayor Bobby Hopewell wants to accept a private donation of $70 million to help balance the city’s budget, and partner with those donors to set up a foundation where other philanthropists can donate even more money.
Then, the city would be able to lean on those donated funds to pay for city services in the future.
“(The donation) will address our budget deficit, it will lower our property tax from 19 to 12 mills, and then it will allow dollars to support our community’s vision that’s being developed right now.”
According to Hopewell, voters won’t approve an income tax – the most straightforward way of padding the city’s coffers.
“We’ve attempted to pass an income tax at least twice in Kalamazoo before,” said Hopewell. “And It’s failed every time.”
Hopewell says his administration approached William Johnston and William Parfet about ways to help provide the city with more revenue to meet the city’s needs and vision for future services.
The pair of local businessmen committed to giving more than $70 million, and have agreed to partner with the city to help set up the proposed Kalamazoo Foundation for Excellence and recruit other donors.
A memo of understanding released by the City Manager Jim Ritsema’s office today outlines the plan to use the money to stabilize the budget for the next three years while the city takes on the work of setting up the foundation.
“This is a new day for Kalamazoo, and a new day for our citizens,” Hopewell said. "And I think It's going to be a better day."
Hopewell envisions using funds from donors to fight poverty and make new investments in the city's neighborhoods, and children.
There is a significant history of philanthropy in the Kalamazoo area. Perhaps most notably is the Kalamazoo Promise.
However, some city commissioners have reservations about accepting private donations to pay for public services.
Commissioner Shannon Sykes told The Kalamazoo Gazette that in order for the proposed to plan to work, it would have to be made sure that donors aren’t looking for a quid-pro-quo.
The concern is that allowing private money to fund public services could lead to donors seeking some sort of influence over those public programs or policies.
In order to go forward, the plan has to be ratified by city commissioners. They could vote as early as their next meeting on October 24.