Macomb County officials debate tax increase BY STEVE NEAVLING FREE PRESS STAFF WRITER November 3,

Tax Increase Inevitable? Some Macomb County commissioners say a tax increase is all but inevitable next year as they run out of time to erase a record $34-million budget deficit. After three months of cuts, commissioners reduced the 2009 shortfall to about $21 million by eliminating health programs, detention space for juvenile offenders, the Parks and Recreation Department and dozens of jobs, including those of sheriff's deputies. But commissioners said they have run out of ideas for significant reductions, beyond cutting $1.8 million in vacant positions later this month and hoping to win concessions from labor unions to save $6 million on health care benefits for employees and retirees.

Voter approval not required Democrats said there's little choice but to raise taxes on all property in the spring by 0.4 mills. The owner of a $200,000 house with a taxable value of $100,000 would pay $40 a year. If approved, a tax hike would raise about $11 million a year and be the first increase in the county in more than 35 years. Voter approval is not required because the hike falls within the maximum allowable rate in the county. "A tax increase isn't out of the question," Commissioner Robert Mijac, D-Sterling Heights, said. "It would be unpopular to do, but we haven't raised taxes for a long time. We need to balance the budget." Republicans criticized any tax increase, saying commissioners should resort to substantial layoffs, demand an end to a pension plan that allows some employees to retire at the age of 50 and reconsider a decision to keep the county's money-losing nursing home.

Downsize county government? "We need a downsizing of county government," Commissioner Don Brown, R-Washington Township, said. "It's a really bad time to raise taxes. People are having a hard enough time as it is to make ends meet. They are taking pay cuts and wondering from week to week if they are going to have a job." But in bad economic times, some Democrats said, the demand for services is high. If commissioners don't cut their way out of the deficit, they will have to siphon money from the county's $32-million emergency savings account, which already is between $15 million and $60 million below a safe level to handle emergencies, according to budget experts. State law requires commissioners to balance the budget by Dec. 31. The major budgetary culprits include a 5% drop in housing values from which the county collects taxes, and rising pension and health care costs.

Is this optimal? Economics Start with initial allocations. Services Other goods If tax base and reserves  S0S0 G0G0 Median Voter … or is this? If so, what must happen?