Ann Arbor is currently spending more money than it takes in. Last year, the city was forced to tap into its savings account to balance the budget. Mayor Ingrid Sheldon said that the city cannot always deplete the savings account in this manner - it is imperative for Ann Arbor to find additional sources of revenue. An income tax is an attractive way of doing so. However, most city tax revenue is used to provide services to permanent residents of Ann Arbor. Imposing an income tax on non-residents, including the vast majority of University students, is inappropriate.
On Tuesday, speakers at a public forum discussed a city income tax. It became apparent that the initial proposal is haphazardly constructed and fails to solicit student input. According to Alan Burns, the city's budget director, the tax would be imposed on any resident making more than $600 per year. The threshold is ridiculously low. Furthermore, students will be ineligible for a corresponding tax break that will be offered to local property owners. If the city puts this income tax proposal on the November ballot, it must first undergo a major overhaul.
Those students who are most in need of financial aid tend to work the longest hours; therefore, with any income tax increase, they are the ones who would be most greatly affected. To pay such a tax, students might need to work even more, and time to do schoolwork or participate in extracurricular activities may be diminished.
At its Tuesday night meeting, the Michigan Student Assembly addressed several more pressing concerns. Federal aid and grants, along with scholarship funds, might be taxed under the proposal; the assembly recommended that these funds be exempted. Rackham Rep. Ray Robb noted the problems that additional taxes would pose to graduate students - many of whom must be financially independent while taking a full course load. LSA Rep. Ed Wright expressed the concern that students, if they are out-of-state residents or are claimed on their parents' income tax returns, might not be able to deduct credit for paying a city income tax. Sheldon and other council members should not ignore these important student concerns - they must let MSA and student input play a large role in framing their final income tax proposal.
Sheldon emphasizes that no formal decision has been made on a city income tax. She said, "We are truly in an information-gathering mode." When searching for the means to raise additional revenue, city administrators must take heed of an income tax's potential effects on students. University students are not the primary beneficiaries of city services, and most are struggling financially; because of these circumstances, if a city income tax is implemented, students with permanent residences outside of Ann Arbor should be exempt from payment.