Wednesday, June 1, 2011


They run from January to April 2010 and I wrote them for EMPLOYEES POSITIVE VOICES but they were spot on with some predictions and shows it's not the unions fault but our leaders elected and appointed


Truth, Transparency, and Taxes
By Rick Tormala    MARCH EPV 2010

President Obama rightfully referred to a “deficit of trust” citizens have toward the federal government. He cited his 2008 election campaign riding a tide of change and pointed to Senator Scott Brown’s Massachusetts victory as an example of continuing voter anxiety. I agree with him and believe the anger is found at every level of government.

Citizens want to be heard. They want their elected officials to listen to their priorities and take constructive actions. Government belongs to the people. They will not be ignored. Tired of scapegoats, they want solutions. They want public servants, not politicians. Too often amongst elected officials there are plenty of profiles but very little courage. More think of the next election, than the next generation. No wonder the trust of the people has diminished.  How do we restore it?

Governing with truth and transparency would be a good start. Respect the people. Involve them in the process of governing. Give them straight talk instead of trying to tell them what you think they want to hear. There are times when our leaders need to be mirrors reflecting the concerns of their constituents. At other times they should be a light to lead us. Every elected official must be willing to lose their office fighting for what is right. Applying critical thinking, fairness, and imagination to the challenges facing us should be the norm, not the exception. I’m tired of the old cliché “government should be run like a business.” Which ones – AIG, Enron, or some other paragon of America’s corporate elite? Governments and businesses should both be run with efficiency and common sense.

All this brings me to the tale of three cities: Grand Rapids, Kentwood, and Wyoming. All are located in the state of Michigan, facing budget deficits resulting from cuts in state revenue sharing, factory closures, and double digit unemployment, causing the erosion of once stable tax bases. Like many citizens and businesses their expenses have surpassed the money coming in and they are required to balance their budgets through cuts or raising more revenue. Unlike businesses or citizens they have a powerful tool working in their favor, the ability to raise taxes. Appropriately it can only be done with the consent of their residents.

On May 4th of this year, all three cities will have tax proposals on the ballot at a time when the American public is up in arms and skeptical of how governments handle their tax dollars. Each city is heavily touting the popular concern of public safety as the purpose for the tax increases.

Wyoming is seeking a 1.25 mill property tax increase expected to raise $2.6 million each year to help retain police and fire staffing levels. They also will have a November ballot proposal seeking to shift a millage currently used for capital improvements to the general fund. In the future they may even look at creating a city income tax.

Kentwood is proposing a 2 mill request earmarked for public safety expected to raise $2 million and would pay for the return of police and fire positions. Grand Rapids using its ability to levy an income tax has approved a ballot proposal to increase the current tax rate from 1.3% to 1.5% for residents and hike the current rate for nonresident workers in the city from .65% to .75%. If approved $7million would be raised annually to rehire police and firefighters.

Tax is not a four letter word, but rather the price we pay for services we enjoy, expect and want from government. In each city the public safety positions are desperately needed. That is unquestionable. Even in this anti-tax atmosphere a legitimate request for funds should be supported. The appropriate demand to make of the leaders of each city is to provide the evidence supporting their request. If it is legitimate and they can show their budget is devoid of fat, that they are funding the voters’ needs and not their own wants, then I believe even in this economy they will succeed.

 Every elected official voting to place these measures on the ballot should take to the streets fighting for passage and prove to the taxpayers their budgets are trim and responsible and their tax request is fair and vital to the solvency of their cities. To not do so would be to fail as leaders and to reinforce the cynicism of voters. Either it is critically needed or it isn’t. Neutrality is not an option. At least state and federal legislators are forced to go on record when they vote on tax increases. We should expect no less from our local representatives. Again only truth and transparency can overcome the deficit of trust.

It is estimated the cost to Grand Rapids citizens for putting the income tax proposal on the May ballot is $83,000 when it could have been placed on the August ballot for free. Ever since the state consolidated elections, the ones held in May are designated for school districts alone and they pay the cities to run them, but if a city places their own proposal on a May ballot they have to cover the costs. Officials in Kentwood, Grand Rapids, and Wyoming should all tell voters what the extra cost of these elections is to their taxpayers, and then explain why they are pushing the proposals in May instead of on a free August ballot. Maybe they have a good answer on the timing, but maybe they don’t? Again the public expects and deserves the truth. In fact they are demanding it!

Another question begs to be answered. Why didn’t the staff and elected officials see these deficits coming last year? They had to if they really were on top of things. Large holes in budgets don’t suddenly appear. We knew about the poor economy and the revenue sharing cuts. They should have placed these proposals on last year’s ballot, but then they would have had to run for election and re-election while giving their positions on tax increases. If Grand Rapids, Kentwood, and Wyoming had announced their deficits before last year’s candidate filing deadline, probably no one would have been running unopposed and the make-up of these respective elected bodies might look quite a bit different today. Mayor Richard Root of Kentwood in particular cannot blame staff for missing the boat since he is by law a strong mayor. Serving as the city’s chief executive he prepares the budget .  Again he ran unopposed.

Previously, I outlined some of the reasons why these cities’ budgets were busted. National policies and events cannot be mitigated much or controlled by local governments. They must play the cards dealt them in the most creative and prudent way possible. State revenue sharing comes from a municipality’s share of the state sales tax. Under law it is collected by state government and then allocated to the respective cities, counties, and township. Long story short, Michigan’s dysfunctional legislature has been raiding part of the money owed to pay for its own budget problems. It is wrong, and breaks a decades old covenant, but it’s legal. What I find peculiar is despite all the moaning and cries of injustice from the elected leaders of the three cities over the state cuts, to my knowledge none have ever held any local legislators accountable for their actions. Instead they usually support their re-elections while hoping these legislators will then support the dutifully compliant mayors and commissioners that didn’t rock the boat. One of the many reasons citizens count their fingers after shaking the hands of many politicians.

Already powerful interest groups like the Grand Rapids Chamber of Commerce and a spontaneous uprising of genuinely indignant and fiscally concerned citizens are rising up to mount a campaign against the income tax increase. I expect Kentwood and Wyoming will confront similar opposition, at least from citizens.

What can we do? I made these suggestions in January’s issue of Positive Voices and I repeat them again. I’m addressing the Grand Rapids city budget but lessons learned by elected and appointed officials willing to lead and sacrifice by example, coupled with a zero based budgeting approach eliminating unnecessary programs and personnel, are applicable to every city seeking tax increases from the public.

Sacrifice starting from the top. The Mayor surrenders his automobile and the Manager turns down his $700 monthly car allowance. They along with the Commission and every city employee making over $100,000 a year take an immediate voluntary pay cut of 10%. That would be real servant leadership and start to restore credibility. Slaughter the Office of Our Families, Sister Cities, the Office of Energy and Sustainability (a city cutting public safety and unable to balance its own budget should practice sustainability, not spend money preaching about it) and all other sacred cows. Freeze all taxpayer funded travel for the Mayor, Manager, and Commission as well as others. Get down to zero based budgeting where every job and program must be proven essential to the core services of the city or eliminated. Vote on every line item so the public knows the truth. Get rid of unnecessary bureaucrats. I hate to see anyone lose their job and the more they make the harder it
will be to find a job in this economy, but face the facts we are the City of Grand Rapids, not a tax funded employment agency. Quit paying around $89,000 a year to the Downtown Improvement District. No other governmental entity does. Have the Downtown Development Authority pay $1 million a year to fund police and fire services. It was a good start with $500,000 this year and I applaud Eric DeLong for putting it in the budget. Lease the parking system to a private entity (except the City-County one which is a cash cow for the General Fund) while maintaining control of the parking prices, keeping them affordable and parking spots available. We might net enough income to wipe out the deficit and even have a surplus. It will save us expenses and raise annual tax revenues.

Unfortunately many cities including Grand Rapids threaten the voters by holding them hostage to public safety cuts. Elected officials and managers know that no one is going to increase their taxes in support of administrators and non-core service programs. Their philosophy is the voter won’t support any tax increase without first feeling the pain of vital service cuts. That is a cynical and unwise position inviting disastrous results. These are our citizens not unruly, selfish children. Disrespect and insult them at your own peril. The discontent growing throughout the country must be acknowledged and recognized in our own communities.

Citizen participation is the glue holding our form of government together. We should encourage it through a vigorous and civil debate especially when constructing our budgets and holding elections.

The deficit of trust can only be filled by the truth and transparency of an open and effective government. Then tax questions will be decided fairly and by reason, not emotion.

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