I am a proponent of funding initiatives for general and higher education, provided the institution seeking support has a compelling need and a clear plan. Northwestern Michigan College’s new millage initiative unfortunately fails on both counts.
NMC has not demonstrated an obvious need for new taxes at this time. It weathered the national economic crisis in remarkably good financial shape, with total revenues increasing steadily from 2007 through 2012, more than matching increased expenditures. As reported in the Record-Eagle, NMC is now sitting on reserves of some $16 million.
The college’s financial reports show that annual contributions from property taxes to the total budget (operations and facilities) increased from $11.2 million in 2007 to $12.4 million in 2012. Tax revenues into the general fund, where the new millage would go, grew from $8.3 million to $9.1 million over this period. Declines in property values have had only a marginal, recent impact on the college’s millage inflow, following an all-time high in 2010. NMC’s preliminary financial report for the year that ended June indicates millage revenues are again on the upswing, and the college ran another budget surplus.
The $1.7 million that would be generated by the new millage in the first year alone would more than make up for all recent losses in property tax revenues. So, why are we being asked to vote for a measure that would generate many millions beyond that amount for the next 15 years?
The question is especially pertinent because NMC has refused to specify how new funds from a millage increase would be used. There is no way of knowing what possible difference, if any, the additional monies will make in helping the college deliver better educational services to the community. Are there new programs and faculty hires in the offing? Better course selections? What exactly is the investment in the future? With so many demands being placed on the limited budgets of so many households, voters deserve more information about how their hard-earned dollars will be spent than has been provided.
Of particular concern is the possibility that the proposed millage increase will be used to jump start NMC’s new, four-year university initiative. There is no obvious justification, and perhaps no precedent, for local property taxes to fund a state university simply because it is nearby.
With Traverse City Area Public Schools and the Grand Traverse County Road Commission also launching millage proposals this year, it is unlikely voters will support all four measures, given the current economic environment.
Although it put itself first in line with its tax hike request, NMC seems to have the weakest case of all to make.
If the college comes back in the future with a more clearly articulated need and plan, I would consider supporting it.
But for now, I’ll vote “no,” and wait to see what TCAPS and the road commission have to offer this fall.
About the author: Jim Raphael is retired and lives on Old Mission Peninsula. He is the former director of research of a policy center at Stanford University, where he had responsibilities for developing and managing research projects, and for fund raising. He also worked as the executive director of several non-profit, educational organizations.
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