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A2Politico 2010 “Whopper of the Year Award” Goes To…..

As I wrote in another entry, I am a big fan of the online news site Voiceof SanDiego.org, a non-profit news site whose writers have won numerous industry-wide accolades and awards, and aggressively pursue investigative stories in a wide variety of areas, including politics, education and the environment. One of the regular beats at VoiceofSanDiego.org is the “Fact Check” beat. In December 2010, the site compiled the Top Whoppers of 2010. VOSD.org writer Keegan Kyle explains how the system works:

The contenders are 15 statements that we’ve previously determined false, including four that we rated Huckster Propaganda. We’re not awarding a trophy or prize money, but the title conveys a fitting level of notoriety.

Today, we’re posting a list of the top false claims and inviting your feedback. Which factual blunder do you think stands out above the rest? Send an email to keegan.kyle@voiceofsandiego.org and explain your reasoning.

After the New Year, we’ll post a narrowed list of finalists and invite your feedback once again. Then, on Friday, Jan. 7, we’ll announce our choice for Whopper of the Year and explain the consensus among readers.

So, without further adieu, here’s the list of false claims and links to our analyses. The Huckster Propaganda statements are listed separately at the bottom.

For the past 24 months, Roger Fraser (pictured left) has told City Council and the public that “property tax revenues are down.” This non-existent decrease in overall revenue has been used by Fraser to get Council to pass budgets that included service cuts (police, fire fighters, leaf collection, park maintenance, even powering down streetlights), as well as large increases in fees (facility use fees, water, sewer, and solid waste fees). The fib has been used to justify the need for a city income tax.

Here are several examples of Fraser’s “property tax revenues are down” statements:

“The financial state of the city was characterized by Fraser as influenced by three key factors: The city’s property tax revenues are declining due to lower assessed values, Pfizer’s departure, and less new construction.”—Roger Fraser quoted in AnnArborChronicle.com, January 2009

“At Monday night’s city council working session, city administrator Roger Fraser introduced a recommended budget for fiscal year 2010 (beginning July 2009)  of about $85 million, down from the almost $91 million budget in FY 2009. Declining revenues from property taxes, together with increasing contributions to the pension fund means that for FY 2010, the equivalent of 34 full-time positions at the city  would be eliminated, followed by 22 full-time positions in FY 2011. If implemented, the cuts would reduce the city workforce from 800 to 746 by 2011 – a number that has declined from a peak of 1,005 city workers in 2001.”—Roger Fraser quoted in AnnArborChronicle.com, April 2009

“Roger Fraser said the city’s financial struggles are the result of several factors, including continued declines in state revenue sharing and declining property tax revenues.”—Roger Fraser, AnnArbor.com, December 2009

“Even if the economy picks up, typically it’s a two- to three-year lag before we start to see increased revenues from our property taxes.”—Roger Fraser, AnnArbor.com, February 2010.

“With property tax revenue sinking 4.2 percent and state-revenue sharing continuing its decline, City Administrator Roger Fraser told Ann Arbor City Council members Monday night the city’s short-term future doesn’t look bright.” —Roger Fraser, AnnArbor.com, April 2010.

It’s a crying shame that AnnArbor.com never checked Mr. Fraser’s facts between December 2009 and January 2011. It took the news blog 23 months to finally ask city officials for the information, and produce the graph, below. The accompanying article, comparing property tax revenues to city income tax revenues, makes no reference to the fact that, for almost two years, Ann Arbor’s City Administrator Roger Fraser has repeatedly told both City Council and the public that property tax revenues have fallen. Between 2001 and 2010 property tax revenues in Ann Arbor never declined. Rather, revenues from property taxes have increased from $55.6 million dollars in 2001 to $81.9 million dollars in 2010.


So, the 2010 A2Politico Whopper of the Year Award goes to Ann Arbor City Administrator Roger Fraser. We would be remiss in neglecting to point out the absolutely crucial supporting role AnnArbor.com played in Mr. Fraser’s award-winning performance.

Look for a new A2Politico feature called, Weekly Whoppers and, of course, in January 2012 A2Politico will hand out its second Whopper of the Year Award. We’ll ask readers to vote on that one from among the 15 top whoppers collected over the course of 2011. 

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Short URL: http://www.a2politico.com/?p=5871

5 Comments for “A2Politico 2010 “Whopper of the Year Award” Goes To…..”

  1. Exceptional piece, thanks!

  2. [...] in tax revenue from Pfizer, but the loss has been offset by tax increases on other property.  Property tax revenue has not gone down. Yes, there have been declines in state revenue sharing, but most of the revenue sharing the city [...]

  3. Ryan,

    You have to be careful when looking the general fund because a lot of stuff has been moved around. Your tax numbers for FY03 and FY04 include the solid waste millage (9.1 mil and 9.5 mil). Solid waste was moved to an enterprise fund in 2005. You need to subtract the solid waste millage from the 03 and 04 taxes to get apples to apples.

  4. The property tax collection numbers cited in my city income tax story came from Page 136 of the city’s new audit for fiscal year 2010. It shows that TOTAL property tax collections for Ann Arbor’s city government as a whole grew from $54.1 million to $81.9 million from 2001 to 2010.

    However, in the context of general fund budget discussions, to say whether taxes are going up or down becomes more complicated, and you need to break it down further than that.

    Here’s what the audits for each of the last several years show for general fund tax revenues (this info is usually around Page 86 in most CAFRs):

    2002 — $55.09 million
    2003 — $46.45 million
    2004 — $48.57 million
    2005 — $43.58 million
    2006 — $45.59 million
    2007 — $48.24 million
    2008 — $51.15 million
    2009 — $51.14 million
    2010 — $51.22 million

    The adopted city budget for 2011 estimated general fund tax revenues at $49.39 million. If that prediction holds true, then yes, city leaders will have been correct to say throughout this last budget process (in the context of the general fund) that taxes are going down.

    If you look at Page 133 of the 2010 audit, you’ll see the total taxable value (real and personal property) in the city grew from $3.2 billion to $4.89 billion from 2001 to 2009, and then ticked down for the first time in 2010 to $4.86 billion (a drop of close to $30 million). On the same page, you can see the total direct tax rate has fallen from 17.13 mills to 16.8 mills. I’m not a property tax expert, but one could venture a guess what that’s going to mean.

  5. The House Fiscal Agency publishes revenue sharing numbers and revenue forecasts. Revenue sharing payments are funded by sales tax revenue. Most of the revenue sharing payments to Ann Arbor are required by the Michigan Constitution. There is a smaller portion that is discretionary with the legislature. Whether or not there is a decline in Constitutional revenue sharing depends on the trends in sales tax collections.

    Ann Arbor residents who are interested in preserving services should compare the city’s budget estimates with the HFA reports. If revenues such as taxes and revenue sharing are higher than budgeted, it creates a surplus. Current city policy is that this surplus cannot be used for on-going services like police and fire but can be used for “one time” expenses. An example of a “one time” expense is the $5 million budgeted in FY14 and FY15 to “reskin” the Larcom building or the $750,000 in FY12 for a State Road cooridor study.

    The House Fiscal Agency website has all the reports and forecasts.
    http://www.house.mi.gov/hfa/revenue.asp

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