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Old October 4th, 2010, 08:50 AM   #1
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Default Livonia: Pay us to collect your taxes!

Livonia is pondering charging a 1% fee to collect taxes from its citizens.

Livonia might charge its residents a 1% administrative fee to collect their property taxes, beginning with the December tax bill.

The city is considering the fee as part of efforts to deal with a substantial drop in revenue expected in its proposed $48.4-million budget for the next fiscal year. The council is holding a public hearing tonight, and is expected to vote on the proposed budget, which includes the fee, Oct. 20.

If the council chooses to charge its residents to collect, process and distribute their taxes -- an option permitted by state law -- Livonia would not be alone. Terry Stanton, spokesman for the Michigan Treasury Department, said more than three-quarters of the 1,800 tax-collecting units in the state charge the administrative fee.

Livonia Mayor Jack Kirksey said the city's financial difficulties make the fee necessary. Without it, the city, which has been steadily reducing personnel through attrition, would have to consider making personnel cuts beyond the 7% called for in the budget. The proposed budget calls for layoffs in various departments of three part-time and eight full-time positions, including two police officers and three civilian positions in the Police Department.

"I reluctantly agreed to support it," Kirksey said, adding that most taxpayers will see an average $285 reduction in their property tax bills -- even with the new fee -- because of declining values. "It's a situation where if we didn't do it, the only other way we could turn would be a reduction in the workforce."

The fee, estimated to cost the average taxpayer about $25, is projected to generate about $1.8 million. That revenue would be offset somewhat because Livonia would no longer charge the public schools and Schoolcraft College $434,000 to collect their taxes.

Although described as a fee, some experts disagree over the terminology.

"It's essentially just a property tax increase," said Mark Skidmore, a professor of economics at Michigan State University. He said the fee could be justified because it does cost the city money to collect and distribute taxes.

Anthony Minghine, associate executive director and chief operating officer of the Michigan Municipal League, said charging residents for tax collection makes sense because the fee pays for a service.

"I wouldn't characterize them as taxes, and I wouldn't characterize them as inappropriate," he said.

Is this shit ever going to end???
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