American cities faced with financial challenges – and there are many – generally look for an immediate, short-term solution to bridge budget gaps. That usually means increased local taxes or fees, coupled with cutbacks in city services and continued deferred maintenance of municipal facilities and crumbling local infrastructure.
Forward-thinking officials in this Michigan city recently set in motion a proposal that will not only bridge the current budget gap, but is also expected to provide funding to help meet the city’s budget needs in perpetuity. Their solution also would lower the city property tax rate from 19.27 mills to 12 mills to support the FY 2017, 2018 and 2019 budgets and provide $10 million per year for three years for projects intended to improve the quality of life throughout the city, build a stronger sense of community and curb the cycle of generational poverty.
And to do so, the city is taking collaboration between the public and private sectors to new heights.
The city recently approved a memorandum of understanding (MOU) between the city and two private donors to create the nonprofit Kalamazoo Foundation for Excellence. The two donors, both local philanthropists, will lead a capital campaign to raise $70.3 million. Plans are to also raise $20.1 million in capital campaign funds to support the 2017 city budget, to be raised before next August in advance of the organizational indenture of the foundation.
The groundwork for the proposed foundation was laid two years ago when priorities were set to direct the city’s future. Among the priorities were to create long-term fiscal stability, to increase community engagement and to reduce poverty, particularly among children. A year later, a panel was named to address revenue needs and make recommendations regarding how to improve and increase city revenue while reducing the burden on taxpayers.
The $10 million per year for three years would be for projects that would include: addressing the needs of the city’s youth, from reducing generational poverty to providing youth development and employment opportunities; developing and implementing neighborhood improvements and reinvesting in public spaces designed to both attract and connect citizens; addressing capital infrastructure improvement and maintenance needs; and taking on other projects deemed appropriate.
The parties are shooting for a June 30, 2019, date to have the foundation fully endowed.
Cities are the lifeblood of this nation. Kalamazoo is proving that some of the most inventive and creative solutions to fiscal challenges faced by government are initiated at the local level. If successful, Kalamazoo’s innovative proposal will ensure that necessary city services continue and that property taxes will be lowered, encouraging new business investments in the city. More funding will be available to address needs of the city, resulting in contracting opportunities and creating jobs. And a spotlight will be focused on what can be achieved through public- and private-sector collaboration.
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