Thoughts on Headlee, taxes, and Geoffrey Dollars

[Note: This article originally appeared in the April 2010 edition of Ferndale Friends]

For the third year in a row, Ace Hardware has been recognized by J. D. Power and Associates as having the highest customer satisfaction of home improvement stores. Scheer’s Ace Hardware in Oak Park on Nine Mile at Republic is certainly deserving of that award. The folks there have been doing their damnedest to help me through my home improvement ineptitude for 12-years in a row.

I also want to congratulate Wyll Lewis on a successful fundraiser to return Thunder, the mechanical horse, back to the front of American Pop! Thunder has become a better-known and loved Ferndale landmark in five years than the solar-powered 100-foot tall Viagra® advertisement erected at Woodward and Cambourne will ever become. Unlike city council, Wyll doesn’t need to compensate for anything.

If you’re like Covey, Lennon, and Galloway, you missed the first Wednesday night budget meeting in March (canceled due to lack of quorum). If you missed the second meeting (both of us showed up) you also missed what I thought was an amusing moment.

City Manager Robert Bruner had just finished telling council that the service-counter at city hall will require some remodeling so the remaining public-facing staff can move upstairs. Bruner didn’t have a cost estimate, but indicated the remodeling wouldn’t be cheap.

Galloway started (and I’m paraphrasing) “If the cost difference between remodeling the counter and renovating city hall isn’t that big, maybe we can save money by renovating city hall once instead of the counter now and the building later.”

Boy, that guy doesn’t give up, does he? In the face of a $3.5 million budget deficit this year Galloway still holds a candle in hopes we can buy a $4 million service counter (a really nice counter) and get city hall renovations thrown-in.
Not even the helpful hardware folks at Ace could pull that off.

It’s a good thing Councilwoman Kate Baker was there to suggest a new counter would likely only have three or four zeroes after the first digit, and not six.

While we are on the topic of the budget, I recommend the 14% of registered voters interested in Ferndale’s budget emergency visit the city’s website and check-out Bob Bruner’s slide show. While reading it, contemplate Bob’s graph showing how Proposal A and the Headlee Amendment will likely prohibit property tax revenues returning to last year’s record $9.2 million until 2023 or 2043.

Heck, even I could be elected to council before 2043. Or not…

Anyway, rather than holding on to the pipe-dream of a renovated city hall, or blaming senate Republicans for Ferndale’s financial woes and not repairing the garage on his vacant property, I’d rather Galloway talk more about the remedy he suggested to The Daily Tribune—a Headlee Override.

The two most interesting numbers on your assessment are your home’s State Equalized Value (SEV—roughly half your home’s estimated street value in Goeffrey Dollars) and its Taxable Value (TV—calculated by laid-off NASA scientists).

Whenever a home is sold and its taxable value adjusted up to the higher SEV (uncapping) the city gains NO EXTRA TAX REVENUE. Instead, all the nearby homes have their taxes lowered. The longer you’ve owned your home the lower your taxes will be thanks to your new neighbors paying your freight. The net result is the burden of property taxes falls on new home-buyers. The older a city’s neighborhoods, the more disproportionately its property taxes are likely to be distributed.

In older cities like Ferndale, one homeowner may be paying $9000/year in property taxes while their neighbor with a nearly identical house (as far as SEV is concerned) only pays $1200/year. The difference being the first home was purchased in 2007 and the second in 1997.

If we raised property taxes the reality may be the biggest burden is born by our newest residents, and our homes become even less attractive no matter how often the Woodward Avenue tent pole is polished.

Let’s not rush into millage increases until we examine the alternatives.

A quick story

While campaigning last year in “The Dales” I met a woman that moved to Ferndale from Detroit and for many years enjoyed her beautiful neighborhood. In the last couple years, however, more junky cars, trucks, and vans have been accumulating on the street creating an eyesore.

“All my neighbors hate it. We complain all the time. If I wanted my street to look like this I could have stayed in Detroit.”

“Have you called the city?” I asked. “I know someone that called the police for a long-parked truck near our street and it was towed a few hours later.”

“No, we haven’t called anyone,” she told me. “We just complain to each other.”

If you don’t have your own tow-truck, badge or other credentials, call the police non-emergency hotline at 248-541-3650.