KALAMAZOO (WKZO-AM) — The city of Kalamazoo has a plan in the works that roughly borrows the financing outline for the Kalamazoo Promise.
Mayor Bobby Hopewell says its possible because a few local philanthropists have expressed their willingness to help out the city, and replace its unsustainable financing model.
Mayor Hopewell announced what they are calling the “Foundation for Excellence” to a standing- room-only crowd Thursday night. Residents appeared at the meeting anticipating a battling over the institution of a city income tax. Instead they ended up applauding the Mayor and the Manager for their creative thinking.
Donors have initially agreed to put up $70 million to provide the additional revenue to erase the city’s projected deficit for the next three years, reduce the city’s millage rate from over 19 mills to 12 mills and provide enough leftover cash to address some of the city’s nagging issues, like poverty and funding for infrastructure .
Homeowners and businesses in the city would see their property tax bills reduced by 38% next year.
During that three year period, the city would work to create a permanent endowment that would tap anyone and everyone to generate enough money to keep the city funded at the new level. Not only would Kalamazoo be able to pay all its bills, but it would become possible to pursue some of the goals outlined in the City’s Imagine 2025 plan.
That citizen driven 2025 visoning effort is still a work in progress , and its scheduled to start generating recommendations next spring.
A few in the crowd were skeptical of this new alternative, but the vast majority were like the mayor, extremely excited to have “this amazing opportunity”.
The commission has tasked City Manager Jim Ritsema to flesh out the details and start working on an agreement to make this thing happen. He says he should have a Memorandum of Understanding ready for the Commissioners by September.
Hopewell said there will be plenty of opportunity for public input, and to work out the details before anything is finalized.
It was proposed that work also continue on the creation of a city income tax as a backup plan, or that some blended plan that utilizes both the income from donors and an Income Tax be explored as a possibility, but that failed to get much support.
The big difference between the Kalamazoo Promise and this new idea is that none of the money for the Promise goes into operating the Kalamazoo Schools. Its all spent on tuition scholarships that go straight from the Promise organization to the colleges attended by the Promise Scholars.
School trustees have no say in how the dollars are spent. Kalamazoo Schools have benifited financially because enrollment has grown, but its an indirect result.
The Foundation for Excellence would funnel money directly into the city for operations and programs that would be controlled and funded by the City Commission.
Mayor Hopewell says Kalamazoo has a long tradition of private money creating public institutions and facilities like the Institute of Arts and the Civic Theatre. There are many other examples in Kalamazoo.
He says there is the “Grand Bargain” that was critical is saving the culture of the City of Detroit during its recent bankruptcy.
One member of the audience thursday night said the only other example he could find on Google of private money funding municipal operations was in the movie “Robo-cop”.
There may have never been anything quite like the funding scheme they are proposing and they will once again be plowing new ground in the next few months.
One consequence of such a plan is that the city would become competitive with surrounding jurisdictions when it comes to tax rates, a parity it has not enjoyed for longer than anyone can remember.
It would not only attract new homeowners and businesses, but encourage new construction, create new jobs and further build the city’s taxable value.
Commissioner Matt Milcarek is also concerned about unintended consequences that might not be so positive. He says diligence is needed to make sure contingencies are covered.
While they have the committment for the $70-million to get the concept kick-started, almost everything else has yet to be fleshed out. It may even have a new name before long.
