An Election for More than Just Mayor

Grand Rapids election could be referendum on financial health

Summer elections are somewhat of an afterthought for voters but there is one in Grand Rapids today that is bound to get some attention — the race for mayor.

Mayors in the city are part-time and nonpartisan, so elections tend to be noncombative. But in this runoff, more may be at stake than usual. For the first time, the mayor and commissioners are restricted by term limits and it is the first mayoral election after an extension of the city’s income tax increase, which could make this election a referendum on the city’s fiscal health.

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Had term limits not been enacted last November, Mayor George Heartwell could have been elected to a fourth four-year term, something achieved by none of his predecessors. Commissioner Rosalynn Bliss would not have been able to run in 2017 for a third term but she is allowed to run for mayor, and she is.

Given the fact that voters approved a citizen-initiative to enact term limits, it would seem any current officeholder would downplay time spent on the city commission. That’s not how Bliss has chosen to run. She has been touting the city’s “solid financial ground,” claiming that under her “financial stewardship,” the city has seen seven years of declining debt.

In a campaign flier, she shows a line graph using data from the city’s online dashboard, using information submitted by the city.

The current city comptroller as well as a former one say that to get a better picture of financial health, voters must look at the city’s comprehensive annual financial report, which shows an unpaid pension liability of over $133 million, an amount that taxpayers are legally obligated to pay under the state’s constitution. To its credit, the city closed its pension program to most new workers last year, though it kept pensions open for public safety employees. This year, the city expects to have its pension program for police and fire workers fully funded. Grand Rapids should be lauded for those efforts. For perspective, Detroit went through bankruptcy and still has not closed its pension program.

More troublesome, though, is the city’s decision to pay retiree health benefits. These are not constitutionally required or protected, and they put enormous pressure on spending priorities. That's because the money for them comes from the general fund — not from money previously set aside and invested to pay for these promises. That liability amounts to over $135 million. Paying retiree health benefits entitles city employees, who can retire while in their fifties, to health insurance until they are eligible for Medicare. Few private sector workers enjoy such an arrangement.

In the last several years, the city has gone back to the taxpayers to ask for more money for various needs. In May 2014, with potholes in evidence everywhere, the city claimed it had no money to repair streets. It asked voters for and got a 15-year extension of an income-tax increase from 1.3 to 1.5 percent for residents, bringing Grand Rapids up to the maximum amount allowed under state law. The original increase was for five years. Nonresidents who work in the city must also pay a higher tax as a result of the increase and its extension, but as nonresidents, are not allowed a vote.

In 2013, the city asked property owners for more money to repair parks.

Each of these increases were billed as temporary. But as taxpayers know too well, few taxes or tax increases are temporary. When millages or income tax increases expire, politicians have a way of repackaging spending requests, asking for renewals for this or that, with the benefit of arguing that approving an extension will not increase taxes.

Today, voters will get make choices that help answer questions such as whether "temporary" tax increases will be a frequently used tool of management and how city officials will deal with problems such as pension and retiree liabilities that have little impact in moving the city forward.

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