Detroiters face another tax hike question as a new analysis suggests the city's sales tax could be too limited to justify its adoption.
The Citizens Research Council of Michigan has released a report analyzing the potential impact of implementing a 1% sales and use tax in Detroit. The research found that the revenue generated from such a tax would be relatively small, amounting to between $42 million and $72 million annually. This represents just 5% or less of the city's overall budget.
The report highlights the complexities involved in estimating the impact of a local sales tax, as Michigan does not track sales tax collections by city, and visitor spending is difficult to measure. The Citizens Research Council used two main approaches to estimate potential revenue, but both concluded that a 1% sales tax would likely be insufficient to meet Detroit's needs.
While some argue that a broader access to local taxes could improve the fiscal health of large cities and counties, the report notes that the path to adopting a local sales tax in Michigan is "daunting". It requires amending the state Constitution, adopting new statutes, enacting an ordinance, and voter approval.
The city's efforts to raise service levels and address future obligations are ongoing, but implementing another tax hike may not be necessary. The report suggests that a local sales tax would require major state action, which could be challenging to achieve.
Detroit already has multiple local taxes, including a city income tax, casino wagering taxes, and utility surcharges. However, the report notes that the state's municipal finance structure relies heavily on property taxes, which are limited by state law. This limits local governments' options for levying additional taxes.
For now, the report does not urge Detroit to pursue a ballot proposal to raise the sales tax. It leaves city and state leaders to decide whether the additional revenue is worth the constitutional amendment, new statutes, ordinance, and voter approval process required to implement such a tax.
The Citizens Research Council of Michigan has released a report analyzing the potential impact of implementing a 1% sales and use tax in Detroit. The research found that the revenue generated from such a tax would be relatively small, amounting to between $42 million and $72 million annually. This represents just 5% or less of the city's overall budget.
The report highlights the complexities involved in estimating the impact of a local sales tax, as Michigan does not track sales tax collections by city, and visitor spending is difficult to measure. The Citizens Research Council used two main approaches to estimate potential revenue, but both concluded that a 1% sales tax would likely be insufficient to meet Detroit's needs.
While some argue that a broader access to local taxes could improve the fiscal health of large cities and counties, the report notes that the path to adopting a local sales tax in Michigan is "daunting". It requires amending the state Constitution, adopting new statutes, enacting an ordinance, and voter approval.
The city's efforts to raise service levels and address future obligations are ongoing, but implementing another tax hike may not be necessary. The report suggests that a local sales tax would require major state action, which could be challenging to achieve.
Detroit already has multiple local taxes, including a city income tax, casino wagering taxes, and utility surcharges. However, the report notes that the state's municipal finance structure relies heavily on property taxes, which are limited by state law. This limits local governments' options for levying additional taxes.
For now, the report does not urge Detroit to pursue a ballot proposal to raise the sales tax. It leaves city and state leaders to decide whether the additional revenue is worth the constitutional amendment, new statutes, ordinance, and voter approval process required to implement such a tax.
theyre saying its too much hassle but i feel like detroit needs some cash 
and that 1% sales tax wouldnt make or break the city lol a lil bit of extra revenue can go a long way you know? also i mean who gets to decide what constitutes "necessary" for the city? sounds like a bunch of bureaucrats trying to outsmart each other 
but on the bright side, maybe it'll get everyone talking about how to improve detroit's finances and that's gotta be a good thing 
And then you gotta think about all the hoops they'd have to jump through to even get it passed - amendment to state Constitution, new laws, ordinance... it's a real bureaucratic nightmare 
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And that's just my two cents... 
. I mean, Detroit's already got enough on its plate. Adding another 1% sales tax just doesn't seem like the most practical solution. The report says it'd only bring in $42-72 million annually, which is basically peanuts compared to the city's overall budget. And let's be real, they're not exactly swimming in cash right now 
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. Just my two cents 
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According to a report by Bloomberg, the city invested around $1.4B in new projects and initiatives last year alone. That's some serious progress! 
Maybe we should explore partnerships with private companies or startups to help fill the budget gap. Just something to think about... 
. I don't know, maybe I'm just a skeptic, but I think they should be looking at other ways to fund the city, like maybe some innovation grants or something 
. We're living in a time where tech and industry are changing so fast, you'd think we could come up with something more creative than another tax hike 
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. I don't know, maybe I'm just being too optimistic, but it feels like Detroit is getting held back by all these rules and regulations 
It's just hard to see how a 1% sales tax would make a significant impact when it's only gonna be, like, 5% of their overall budget. 
. but for now, I'm inclined to say that maybe, just maybe, a local sales tax isn't the answer they're looking for 
. It's just too complicated and the returns aren't that great. Plus, they've already got a bunch of other taxes, like that city income tax, casino wagering taxes... what's next? We should be looking at ways to reduce expenses or increase efficiency in local government rather than asking people for more money 
... it seems to me that detroit should focus on finding other ways to cut costs or increase revenue elsewhere before resorting to another tax hike 
. I'm all for the city finding ways to raise revenue, but do we really need another tax hike? 
. Property taxes are limited by state law, which is just not fair 
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