Taxes

Taxes are the method we use to finance our government. The property tax generates 33 % of the civil city's revenue. These moneys are used to operate most of the city departments and to finance some major construction activities. All governments should be committed to use the public's money efficiently. I announced in November my three-step plan to reduce our tax rates.

My plan is composed of three basic elements:

1. Pay off the 1995 sanitary district general obligation bonds thereby reducing the annual tax bill by $2.1 million. This action can be achieved with the one time adoption of an appropriation ordinance. It would not be subject to annual action by the City Council. The debt would be paid, and the 24 cents tax rate removed from all taxpayers' bill permanently.
2. Continue to use riverboat money to reduce the tax rate. Since 2001 every city budget has used riverboat money to reduce the tax rate. The city's 2003 budget uses $500,000.00 (6 cents on the tax rate) for tax reduction.
3. Pursue cooperative agreements to gain discounts in buying and to reduce duplication of services. In St. Joseph County the local governments (cities, towns, the county and schools), and the area universities coordinate purchasing to gain price discounts. Michigan City and the other governmental units of LaPorte County should follow the St Joseph County example.

The first two steps would reduce the tax rate by 30 cents (a 14.5% reduction in the combined city and sanitary district tax rate). The success of the cooperative purchasing agreements will depend on the spirit of cooperation among the other governmental units. As your Mayor, I will aggressively pursue cooperative agreements with other governmental agencies to reduce operating costs.