By LINDA LOBECK,Staff Writer

 

IRON MOUNTAIN — Iron Mountain would not have to sue itself if a proposed charter amendment passes in November, the Iron Mountain Taxpayers Committee says.

The committee has issued a statement responding to recent letters received from the offices of Gov. Jennifer Granholm and Attorney General Mike Cox.

These letters raise a legal objection to the committee’s proposed amendment to the Iron Mountain City Charter.

“We believe that the voters deserve a clarification of both the Attorney General’s opinion and Mayor Ken Tousignant’s alarmist and inaccurate reaction to that opinion,” said Bob Jayne, committee treasurer.

The Iron Mountain Taxpayers Committee is a registered ballot question committee formed to promote the proposed amendment to the city charter.

Tax Increment Finance Authority (TIFA) Board Chairman Ted Corombos said that the Attorney General’s opinion is based entirely on “an incorrect presumption about the effect of the proposed tax cut.”

He said that the letter from the Attorney General presumes that Iron Mountain’s TIFA would continue to capture a portion of the Police and Firemen Retirement system millage after the adoption of the amendment and thereby shortchanging the pension plan.

The letter stated, “Such reduction would cause the city to receive less revenue than is determined as necessary annually by the city’s actuary for the funding of its police and firefighters retirement system.”

“If the Attorney General’s presumption were true, the tax cut would indeed be illegal — and it should be,” Corombos said. “In fact, however, the city council has already entered into a tax-sharing agreement with TIFA to eliminate TIFA’s capture of the Police and Fire millage, and has already levied that millage at the appropriately lower rate. As long as the tax-sharing agreement remains in place, the amendment changes nothing and shortchanges no one,” he added.

According to Jayne, Tousignant’s comment that the city would have to sue itself if the amendment passes in November is “absolutely wrong.”

“The city would not have to take any action, because the tax-sharing agreement ensures that the pension plan receives everything that it has coming,” Jayne said.

“The tax-sharing agreement prevents the amendment from violating state law unless, of course, the city council intends to renege on the tax-sharing agreement by stacking the TIFA Board with members who wish to resume taxing homeowners outside the TIFA District for improvements inside the district,” Jayne added.

He noted that the committee launched the petition drive for the proposed amendment because the city council declined to adopt the tax-sharing agreement for four months.

“They (council) accepted it only under the pressure of our petition drive — 11 days after we filed our petitions with the city clerk,” Jayne said, noting some media reports have incorrectly claimed the petitions were filed after the council already acted.

“The Iron Mountain Taxpayers Committee’s efforts have already saved taxpayers almost $150,000. We hope voters will help us continue saving that money until TIFA expires,” Jayne added.

He said that the committee remains committed to winning passage of the proposed amendment.

“Passing the amendment will ensure that the city council doesn’t change its mind again by appointing hand-picked, rubber-stamp type TIFA board members who would renege on the tax-sharing agreement. We hope that voters will keep this pressure on the council and future TIFA board by voting yes,” Jayne concluded.

The current TIFA board had voted in favor of the agreement and is convinced it will have enough income to meet “rational and prudent needs” until TIFA expires on June 30, 2011.

TIFA has been in existence since 1986 in Iron Mountain.

All TIFA’s throughout the state operate under legislation established by the state of Michigan and the life span for TIFA district is 25 years.

Iron Mountain’s TIFA district runs from north to south city limits along the U.S. 2 corridor and includes the industrial park and those properties between Carpenter Avenue and Stephenson Avenue (U.S. 2).

When the tax-sharing agreement had first been brought before the council on April 17, the council had tabled action, citing it needed to wait until the budgeting process was completed before deciding whether to take any action.

Petitions to place a tax-cutting amendment to the city charter on the November general election ballot were presented to the city clerk in June.

The council approved the tax share agreement with TIFA at its July 3 meeting.

Linda Lobeck’s e-mail address is llobeck@ironmountaindailynews.com.