Saturday, May 3, 2014

The Roads Income Tax Rate Continuation: Grand Rapids Taxpayers Association vs. Fix Our Roads GR

The Grand Rapids Tax Association is really fighting back against the proposed income tax rate continuation for the repair of roads to be voted on next Tuesday, May 6. Fix Our Roads GR is hoping for a yes vote which would extend the temporary income tax increase the voters previously allowed and allocate the funds for street repairs.

If you live in Grand Rapids, it should be obvious to you that our roads are in bad to terrible condition and that driving on them means an eventual auto repair shop visit and perhaps even an accident. Drivers swerve to avoid the potholes everywhere, and no matter how often these potholes are filled, every year they come back. At this point they are in such bad shape we would need to rebuild many of them from the roadbed up, not simply patch them. The condition of the roads is not in dispute; the question is, what should be done about them, who should do it, and why has this problem gone unaddressed until now?

I talked to both Michael Farage, of the GRTA, and Ed Kettle of FORGR on Friday about their points of view. Farage and his organization feel strongly that the taxpayers have already paid for high quality roads, but the money has been mismanaged and funneled to other city needs, leaving the roads neglected. Farage looks at the long history of request for money from Grand Rapids citizens via millages or income tax increases as a sign of a city never satisfied, a city government that never will never have enough tax revenue. The issue for the GRTA is the trustworthiness of the government: will it use the monies the income tax continuation generates to fix the roads? Is it accountable for the funds we give them and have given them? Will the money ever be enough for them? And does this have anything to do with the city's pension obligations and all the money that will need to be paid out to pensioners in the next fifteen years?

Farage also looks at the list of donors to Fix Our Roads and sees groups of people who stand to benefit directly from the rebuilding of the roads: engineers, construction companies, city hall employees. He does not believe that the city will use a closed bid process when contracting for these repairs. Closed bids do nothing to prevent waste and kickbacks.

Ed Kettle of FORGR believes that the city has been very responsible with the income they've taken in from taxpayers. The reason for the state of the roads is not due to irresponsibility, corruption, or an insatiable desire for funds. The situation is complex, he says, and largely due to factors outside of the city's control. The long decline of the auto industry, the offshoring of industrial jobs, and economic collapse of 2008 created a tax revenue vacuum. The state, starved for money, discontinued all revenue sharing not legally required. Michigan cities depended on that income sharing to repair their roads. Without it, and minus property tax revenues due to falling real estate prices, they had nothing to work with.

Kettle says Michigan is in recovery, but the damage has been done. The city must have more money to address the problem, and after much study a group of citizens and experts recommended that the best and most fair way to create those funds would be a continuation of the income tax the votes previously authorized. These funds will be put into a dedicated and restricted fun, a lock box of sorts, over the next fifteen years and will generate enough income to do the work that needs to be done in a methodical way. He has no qualms about the "connections" of the donors to FORGR - they are citizens too - but does question why Americans for Prosperity is giving money to the GRTA.

Ultimately, it is up to us, the taxpayers to decide who is trustworthy and responsible with the money we do or do not give them. As a city resident I have my own questions. This is yet another ballot proposal in a long line of ballot proposals including ones for The Rapid (Spring 2011), Grand Rapids Public Schools (Fall 2011), GRCC (2012), and the city's parks (2013). This election is being held in May, obviously because voter turnout will be lower and the group who sponsored this initiative can count on mobilizing its supporters and not meeting as much opposition resistance from taxpayers who would be in the ballot box in August or November voting on other issues.

Property taxes are already noticeably higher for Grand Rapids taxpayers. Our elites and city boosters might want to make our hometown more attractive to knowledge workers and the creative class, but many of the rest of us have experienced the economic downturn personally and either struggle or can't afford to pay higher taxes.

Is there another way for us to fix our roads, then, or is authorizing the city via our tax dollars the best way to go about it? You can help make the decision by voting on Tuesday.