In February, Saginaw Mayor Brenda Moore held a State of the City address. In her speech she discussed standard topics like economic development and crime reduction.
She touted an 11% reduction in serious crimes and a 43% drop in homicides. But later in the speech, Moore decided to go off script to address a topic she feels passionate about.
“Once again Saginaw is tagged by this deadly thing called the tax cap,” she said. “I know they’re going to be mad at me. I know they're going to be mad. But I need you to understand, it's 2026. And we're living on a 1979 budget.”
As she described it, the tax cap is an impediment to delivering crucial services to the city.
In 1979, the people of Saginaw voted to impose a hard cap on the amount of money the city can take in property taxes.
The city has not taken any more than $3.8 million in property taxes annually since then. It’s the only city in the state with such a cap.
Now, there’s a growing debate in the city over the system. Saginaw, one of the poorest cities in America with a poverty rate above 30%, has consistently voted to keep the cap in place.
While Saginaw has other forms of taxation to pay for city needs, public officials want to remove the cap. They say it’s lowered property values and forced cuts to city services.
“We used to have a forestry department. We don't have a forestry department anymore. We had a separate cemeteries department. We don't have that anymore,” said former Saginaw mayor Floyd Kloc. “Just about each year, there were layoffs,” he added.
Kloc is the chairman of Restore Saginaw, a local ad hoc group looking to get rid of the cap. Kloc says the city often brings in less than $3.8 million because of state-level tax limits.
Kloc says staffing in everything from fire and police to snow clearing has been gutted over the decades. Also, he says losing so many recreational services and entry-level government jobs has given the city’s youth less to do and less opportunity.
“You end up with more kids who are unable to find an activity to do when they're on the streets, crime went up,” Kloc said.
That effort to end the tax cap is hoping to gain momentum. State Representative Amos O’Neal, D-Saginaw, is proposing a bill that would prevent any Michigan city from having a tax cap.
Recently, O’Neal held a town hall at a church gym in Saginaw for locals to talk about the tax cap.
“If I'm developing a new business in the city, if it's a $100 million building and I have eight employees, so we're not benefiting significantly from property tax, how do we fund the police and fire to protect that building,” said Saginaw City Manager Tim Morales.
“You don't. You don't with a tax cap,” Morales said.
Resident Saleem Mannan says the tax cap is limiting the city’s potential.
“I to this day, got the name of no place where anybody put a chain on the city and told them you can only operate at this budget, no matter what happens,” Mannan said.
Local Bishop Hurley Coleman commended the city for being able to operate despite the cap.
“To manage shrinking budgets every year and to still have a city that's operating, providing services is no small feat,” Coleman said.
Despite local political support for ending the tax cap, residents have consistently rejected efforts to get rid of it. In addition, some at the meeting said O’Neal’s bill would take away local control of the tax rate from residents.
Voters have rejected getting rid of the cap seven times since 1979. 74% of voters, 4,018 people, voted against ending it in 2009. That was the last time the cap was on the ballot.
“My position is this. We don't tax our way out of problems,” said Jason Tunney.
He’s a lawyer and businessman running as a Republican to be Saginaw’s next state Senator in an upcoming special election for the 35th District.
“The city of Saginaw has got to figure out a way with their property taxes and their city income tax, they still have a city income tax right, but the problems continue,” Tunney said.
Saginaw has a 1.5% tax on residents and a .75% tax on non-residents.
The Democratic candidate in the race, Chedrick Greene, who currently works as a Saginaw Fire Department captain, says he supports getting rid of the cap. He says the city has lost $29 million dollars since the cap was implemented.
Although, he says it should be up to the citizens to decide.
“We need to... make sure that those tax caps are removed, but that's also a step that voters in that local municipality put in place. So that may be a step that voters in that local municipality take out,” he said.
The special election for the state Senate seat is May 5.
The bill to end the tax cap is still in the state House. O’Neal said it’s effectively in limbo at the meeting.
