April 17, 2014CITY OF GROSSE POINTE — The creation of a separate millage to fund public safety could result in taxpayers being charged more than otherwise allowed under state limits.
Although members of the city council said a dedicated assessment would be subtracted from the general millage, making overall property tax obligations a wash, state law permits public safety assessments of up to 20 mills.
The City of Grosse Pointe's current general levy is 11.8391 mills, the maximum allowed by the Headlee Amendment.
"The special assessment is revenue neutral," said Dale Scrace, mayor of the City of Grosse Pointe. "That was the whole premise of today. That doesn't mean in the future you couldn't adjust that special assessment. It can go up."
The council instructed City Manager Peter Dame last month to research special assessments, essentially a separate property tax, to fund public safety, which costs 59 percent of the annual general fund.
"City staff is only aware of cities that have adopted a public safety assessment in addition to their standard tax levy, instead of as a replacement for it," Dame said. "We are proposing to do it as a replacement for our general levy, just for public safety operations."
"We intend it to be revenue-neutral," said Councilman Andrew Turnbull.
One mill in the city currently generates $325,000.
Public safety operations for fiscal year 2014-15 are estimated to cost nearly $2.9 million.
A special assessment of 8.83 mills would cover those costs.
State law allows an assessment up to 20 mills to "defray purchase of equipment and maintenance of police and fire department operations," Dame said.
Discussions are conjectural until Michigan voters in August rule on repealing the personal property tax.
Had the city created an assessment — and also lowered its general assessment by an equal amount to remain revenue neutral — before voters replaced the tax, the city would lose money.
City officials have time to wait.
"We don't need extra tax money this year for public safety," Dame said. "If we were to need extra tax money this year, it would be for roads."
"It makes sense, given the uncertainty, to wait and see what happens with the vote in August," said Councilwoman Jean Weipert.