Saline's New Normal
Tough times get tougher with ACH's sale
From the August, 2012 issue
The last decade wasn't kind to Saline. "Property tax revenues have gone down about 22 percent," says mayor Gretchen Driskell. "And revenue sharing from the state has been going down since 2002, and it now amounts to a $4 million difference in what they said we'd get and what we actually get."
So Saline did what it had to do. "We've reduced staffing," says city manager Todd Campbell. "We had sixty-nine full-time employees, and now we have fifty-seven. We've also spread the increased burden of benefits with the employees. And we've frozen wages this year."
Times got tougher in May, when French parts supplier Faurecia bought the Automotive Component Holdings plant, cutting the number of employees from 2,100 to 1,100 and starting wages to $11 an hour. When Visteon/Ford owned it ten years ago, the factory paid $3.4 million a year in taxes. Next year, Faurecia will pay $1.8 million. That alone represents a 3 percent drop in the city's revenue.
And times are likely to get tougher yet: in May the state senate approved eliminating the "personal property" tax, which despite its name is paid solely on business assets. "Twenty-two percent of our income comes from [the] personal property tax," says Campbell, "and that's been what's saved us so far, because businesses have been investing in new equipment. Losing that will really hurt us."
"The senate's talked about replacing it with another source of income," says Driskell. "But that's what was supposed to happen with state revenue sharing, and look at the history." If the personal property tax is eliminated, Driskell warns, "we will have to raise [other property] taxes."
Saline's future isn't all doom and gloom. "Residential property taxes started to come back a couple years ago, and we're almost flat [in revenue] this year," says Campbell. "But we still have commercial and industrial properties that'll be down next year by 5 percent because of a glut of vacant industrial and commercial properties out there. And if things do
get better, it'll take seven-plus years for us to get back to where we were in 2008--even with 3 percent growth every year."
Nevertheless, Mayor Driskell insists, "We don't have a bad economy here in Saline. We did, but not now. The automotive industry is growing, and companies are expanding. We have a lot of land here suitable for development, and if the economy continues to grow, that land could be purchased." She figures the forty-two acres of property for sale in the city's business parks are worth about $2 million--and once the land finds buyers, "the investment in the buildings will also provide ongoing taxable value."
[Originally published in August, 2012.]