Posted on 11/14/2009 6:34:38 PM PST by Lorianne
Several school districts and cities heavily reliant on commercial and industrial taxes could fail financially over the next two years, says Oakland County Executive L. Brooks Patterson.
Patterson said Friday that commercial and industrial property values could be 40 to 70 percent lower two years from now, exacerbating the declining values and tax base in the residential market and adding another burden to strained local budgets.
“We’ve seen something very, very dangerous on the horizon for local communities,” Patterson said. “School districts will probably be the first to go under. We’ll lose a few of them next year.
“A few cities will follow, especially those cities which are heavy in commercial and industrial,” he said. “That’s just going to cripple the more industrialized cities in the county, and in the state.”
Patterson has invited school, township and municipal leaders to a meeting in December to present the county’s property tax projections for the next two years.
“I think what you’re going to see in the next 24 months are probably the toughest times this state has seen since the Great Depression,” Patterson said. “We’re just trying to prepare the local officials for what we think is going to be two of the toughest years they’re ever going to see in their lifetime.”
In Oakland County, currently only the city of Pontiac is operating under the authority of a stateappointed emergency financial manager, but more schools or municipalities could wind up in the same position.
Most of the county’s 28 school districts and 61 municipal governments in general are struggling with tight revenues.
Some of the communities with the highest percentage of commercial and industrial tax base are Auburn Hills, Southfield, Troy and Madison Heights.
The residential tax base is just 20 percent in Auburn Hills, 48 percent in Southfield, 51 percent in Madison Heights and 63 percent in Troy, according to the Oakland County Equalization Division, the county’s tax assessing arm.
County assessors are projecting an overall drop in taxable property values of about 13 percent this year, although market sales studies aren’t yet complete.
The projections exclude any increases from the addition of new construction to the tax rolls or decreases because of reassessments or challenges by owners of individual parcels to boards of review or the Michigan Tax Tribunal.
Across Oakland County, commercial and industrial property accounts for 24 percent of the county’s tax base.
Equally troublesome for some communities is the effect of Proposal A, which started in 1994 and limits tax increases to 5 percent or the rate of inflation, whichever is less.
During much of the 1990s, property values in general rose close to double digits across the county, creating a gap between assessed and taxable values.
But with large declines in property values the past few years, taxable and assessed values in many communities are close to even.
That means any sudden drop in property values has a greater impact on local government revenues.
In Southfield, for example, 94 percent of all the city’s parcels have equal assessed and taxable values. Meanwhile, values are projected to drop 28 percent for residential property, 8 percent for commercial and 11 percent for industrial.
Assessors project a 16 percent drop in commercial values and a 19 percent drop in industrial values, coupled with another 18 percent decline in residential values for an overall drop in taxable value of close to 15 percent.
Auburn Hills Assessor Victor Bennett says the city is in reasonably good shape because it has fund balances to offset the reductions in taxable values.
“It does have some effect but it’s not going to be as bad as in some communities,” he said.
“If this continues, the longterm trend is going to be difficult.”
I cannot think of a better thing to happen to that leftist place. Nothing would be better than government schools/
Or they could ask a CZAR to send some TARP money, and ask for a stimulus, there’s a lot of money that they have looking for a rat hole to throw it down...
The NEA is going to lose membership, I’m devastated.
Public schools = public option.
Here in Jackson county some would like to combine all the school districts because some are failing. Combining them sounds like a great way to insure that they all fail.
Bingo. We see loberalism failing all over the place like MI, CA, Il and other places. The Repubs should point it out but the liberal newsmedia will block any attempt.
"Show me just what Mohammed brought that was new, and there you will find only things evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelogus
Oakland County is mostly suburbs except for Pontiac. Some do have high density businesses like Southfield, just north of the border to Detroit, 8 Mile Road. We lived for 30 years in Milford Township, in Oakland County and heavily dependent on the GM Proving Gounds and large scale recreational parks and preserves. Since the area has grown into a major bedroom community I imagine their tax base has grown, but the house valuation has dropped considerably throughout the metro area. We sold our house on 4 acres over 10 years ago. It is now valued at $20-30 thousand dollars less than what we sold it for and we sold it for a fair price without realtor to acquaintences.
Oakland County is mostly suburbs except for Pontiac. Some do have high density businesses like Southfield, just north of the border to Detroit, 8 Mile Road. We lived for 30 years in Milford Township, in Oakland County and heavily dependent on the GM Proving Gounds and large scale recreational parks and preserves. Since the area has grown into a major bedroom community I imagine their tax base has grown, but the house valuation has dropped considerably throughout the metro area. We sold our house on 4 acres over 10 years ago. It is now valued at $20-30 thousand dollars less than what we sold it for and we sold it for a fair price without realtor to acquaintences.
Ya know there are still a few of us that live in Michigan. So lighten up here.
Tis so.
I have some questions for most of these communities.
Do you really each NEED a separate fire department, police department, school system, DPW, parks and recreation dept., strrets, water sewer etc. Perhaps it’s time to start combining some efforts.
In my town in Macomb County, they disbanded toe police dept and contract with the sheriff dept. It seems to be a success and is saving tons of money. We are surrounded by a township with several fire stations yet we have our own. Seems like it would save a bunch just in admin costs to get annexed by the township for some of these services.
Another thing is ambulance service. That is a profit center for the few depts. that have their own. Near us it’s all private companies.
School systems could combine administration. Principals of smaller elementary schools could become principal of two schools and meet with staff by video when necessary.
Lot’s of things could be done. Shut down school bus service and make it the parents responsibility to get the chilluns to school. Maybe the kids would start walking. Of school bus could be a pay service. $50.00 per month or something.
I took a city bus to school and paid. I lived through it. If I missed the bus, I walked...seven miles. I lived.
And some of us actually like living here and are proud to be fighting the good fight come hell or high water.
I just can’t figure out why more businesses don’t want to move to Oakland County. People don’t want to move in so they can give up their wealth to the leaches? I’m stunned.
I was also wondering about student enrollments. We have been experiencing a decline in student enrollment some of it due to a declining birthrate and of course other reasons, for years. However, no teachers or faculty have been cut. Could that be partly the reason schools all over the USA are closing? Many of the schools were built in the 60s-70s.
“Another thing is ambulance service. That is a profit center for the few depts. that have their own. Near us it’s all private companies”
There are a lot of people who have tried to figure out how to make a profit running a 911 ambulance service. I have yet to know of one who has succeeded.
Problem is, if you manage to collect 30%, you are doing good. The rest are written off and the one who pay subsidize it.
Most ambulances are run as just another city service that is a drain on the budget.
The other options are to subsidize a private company and hope you can get reasonable service or let them run transfers between hospitals or nursing homes.
Towards the end of one of our private providers contracts, we were getting 12-15 minute average response times in the Dallas/Ft Worth metromess. That is pretty bad when it really is a life threatening situation.
We ended up going to a city service ambulance.
Things will have to get really bad before you start seeing regional fire and police depts. Too many little empires and no-one wants to cede their kingdom to those deadbeats in the city next door.
It is (was)a wealthy county north of Detroit. Guess you could call it a suburb.
“Several school districts and cities heavily reliant on commercial and industrial taxes could fail financially over the next two years”
So what? Ineptness ends in financial failure. What a surprise.
True as far as it goes, but some of those "suburbs" like Pontiac are responsible for their own screw-ups.
They're learning what a beach it is to have to live within a budget.
We have over a thousand home schoolers in the five county area where I live in Northern Lower Michigan. Seems public school does not get the hint. I don’t want my kids indoctrinated. I say we give Detroit to Canada and send 2 penny Jenny back home. Its time we sent some of Canada’s trash back.
-Thank you Gov. Granholm! You’ve REALLY blown us away!
Oakland County is 2 counties north of Detroit and still considered ‘suburban’ to Detroit. Lots of business was done there. Until recently...
That’s the “other reason” I mentioned that has enrollment down. We home school too. The gig is up and the Americans that care and have their eyes open, in their gut, they know something is wrong. That is why the progressives in charge will stop at nothing, no matter the cost. They will tear it all down if they have too.
I grew up and lived in Oakland County until six years ago. L. Brooks Patterson is a tough bird who doesn’t take crap from Democrats, especially when Oakland county is involved. He’s held the fiscal line admirably and refuses to let Detroit suck any more tax dollars out of Oakland which was, until recently, the biggest, most wealthy county in the state.
Hearing that Troy is in serious trouble is heartbreaking. Auburn Hills, too (I lived in Lake Orion, just north of Auburn Hills and used to work there myself). Most of the tax base relied on auto OEM suppliers and support industries like hotels, restaurants, malls, etc.
This is Very. Bad. News. for Michigan. Like we needed any more.
Public education is a joke. We had to bring my son home to teach him to read. My wife worked at the school as a administrator and was constantly working with the teacher. still he fell behind. It took over a year to teach him phonics so he could read correctly. If you want to under educate your kids send them to public school. The day the public schools close will be a great day for our great nation.
So??...If there are one thousand in your area, do you believe that there are a mere 3 million in the entire United States?
I always take the government's official count of homeschoolers and double or triple their count. That's more likely the true number of homeschoolers in the nation.
We lived in Elkton, Maryland. They built a huge new county library that was ( literally) 5 minutes down the road from the very scholarly University of Delaware library and the Newark, Delaware, county library.
public schools = the original public option
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In a very short time, people will be unable to imagine a world without government health care in the same way they can not begin to picture life without government schools.
Look at this, I think a bunch of people sitting around in their pajama’s have save the county millions of dollars.
These government schools won’t “go under”. They will steal the money from the more prosperous who live elsewhere in the state.
Look at this, I think a bunch of people sitting around in their pajama’s have save the county millions of dollars.
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It amazes me how few people understand that most government services are **not** about the service supposedly being rendered. No, no, no!
It is about votes and power. These services ( education being the largest) are JOBS PROGRAMS for those with modest talent and imagination.
Ya know there are still a few of us that live in Michigan. So lighten up here.
You sturdy ones will homeschool and teach your children government free values.
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