Saunteel Jenkins and Mary Sheffield. Photos: Samuel Robinson
Detroit mayoral candidates are pitching plans to generate new revenue to bolster the city’s bottom line without burdening residents already liable for higher than average annual property taxes.
City council president Mary Sheffield and nonprofit CEO Saunteel Jenkins have both laid out plans to create new funding mechanisms through tourism tax or a local “penny tax,” while councilman Fred Durhal has championed a blight tax targeting speculators.
Durhal wants to introduce a blight tax to charge 25 times the property tax millage for non-owner occupied structures on commercial corridors, as well as in the neighborhoods.
Sheffield says she would look at an entertainment tax to capitalize on the economic activity in downtown Detroit, she said at a recent candidate forum hosted by the Southwest Business Association and other business groups at the Brooklyn in Corktown.
Detroit’s property tax base shrunk as its population declined, which led to the city raising property tax rates to maintain services. While outgoing Mayor Mike Duggan is able to champion reductions property tax millage in the final years of his tenure, candidates are expressing concerns over the city’s financial future. With benefits promised to retirees and infrastructure improvements needed across the city, some candidates are pitching ideas to create new taxes.
Sheffield has floated an entertainment tax for years.
In 2017, then-state Rep. Sylvia Santana, D-Detroit, introduced House Bill 5174, which would have levied a 10% excise tax on entertainment events with a seating capacity of 500 or more.
Under the legislation, “entertainment events” included zoos, live theater, museums, opera, professional sporting events, concerts, temporary or transient entertainment productions, botanical gardens, amusement parks, and temporary or transient art, music, theatrical, dance, literary or cultural festivals.
It also exempted the following events from the tax: high school, middle school, or elementary school events, events sponsored by a nonprofit or charitable organization, and collegiate athletic events.
Santana’s bill provided that 75% of the funds from the amusement tax would be used to fund “other post-employment retirement benefits” for police and firefighter retirees in the municipality where the tax was collected. The remaining 25% would be used to fund retirement benefits for police and firefighters in the municipality where the tax was collected.
Sheffield said it’s imperative to increase city revenue to support neighborhoods, public safety, transit and infrastructure. She did acknowledge the hesitancy from business groups to support new taxes, saying continuing to grow Detroit’s population is the chief responsibility of the next mayor.
A study conducted by the Citizens Research Council of Michigan found that an amusement tax with a flat $3 fee on tickets would raise approximately $8 million from sports games and concerts held at Ford Field, Comerica Park and Little Caesars Arena. The study was based on attendance records.
Ford Field, where the Lions play, sold out every game for the first time this past season. Games attracted a mean of 64,850 attendees, 6.5% more than the mean attendance of 60,129 from the previous 16 seasons, according to the research council report.
Sheffield noted such a move would need the approval of state lawmakers.
Jenkins said she would leave “all options on the table” as far as the creation of new taxes.
“We can continue to reduce the millage gradually, but it does not give real relief to Detroiters,” Jenkins said during the WDIV debate last month at Wayne State. “I would find a new revenue source such as what I’m calling a penny for Detroiters local tax. That 1 cent can generate over $100 million, which would give us a revenue source that enables us to dramatically reduce our property taxes and make it more affordable to buy a home and live here.”
American Coney owner Grace Keros, who attended the mayoral forum in Corktown last week, told Michigan Chronicle she doesn’t want to see any new taxes until property taxes are reduced.
Former police chief James Craig, attorney Todd Perkins and councilman Fred Durhal III, who recently earned the endorsement of business leaders at the Detroit Regional Chamber PAC, both said they would oppose adding new taxes on residents.
Durhal said it could discourage business investment and harm local venues, while Perkins said an entertainment tax could hurt local businesses by creating a reluctance to invest downtown.
“I’ll just say, no further taxation,” Craig said. “We don’t need it, we shouldn’t do it. It’s a bad idea.”
Craig questioned the constitutionality of taxing folks who live in the suburbs who come into the city to enjoy entertainment.
“That would be wrong — you know, we want business coming into our city,” Craig said.
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