By Cortney Casey
C & G Staff Writer

STERLING HEIGHTS — There’s a familiar number rattling around both sides of Dequindre these days: 1.9 mills.

That’s the tax hike city administrators in both Sterling Heights and Troy have deemed necessary to combat steep revenue declines in their respective communities as property values continue to slide.

There’s one distinct difference: Sterling Heights, with a multi-mill cushion between its currently levied rate and limits dictated by the city charter and Headlee amendment, can enact the tax increase via the 2010-11 budget process, without the consent of residents.

Lacking the same breathing room, constrained by a tax cap passed by voters in fall 2008, Troy was forced to put its proposal to a public vote. Residents subsequently obliterated the plan, turning it down by a nearly 2-to-1 margin Feb. 23.

So is the public’s vehement reaction across the border giving Sterling Heights leaders pause?

Councilman Michael Taylor, who has been outspoken in his opposition to a millage increase, says it should. He thinks the plan would likewise go down in flames if placed on the ballot in Sterling Heights. 

“The similarities are eerie here,” he said. “Both 1.9-mill tax increases, we’re similar communities. I would say Sterling Heights is even more economically depressed than the city of Troy.”

But Mayor Richard Notte said he doesn’t believe Troy’s outcome will influence how Sterling Heights proceeds.

“I don’t think anybody has changed their position,” he said. “I think everybody’s still going the same way, even though (Troy’s) vote went south, got defeated pretty good.”

While Sterling Heights City Council has yet to vote on the increase — budget adoption is slated for May 4 — the assessment calculator recently posted on the city’s Web site only offers residents an opportunity to see how much they’ll be paying in taxes with the 1.9-mill hike, not without, as if it’s a done deal.

And comments made by officials at municipal meetings have given the impression that the majority of council members are resigned to the need for an increase.

“Nobody likes it, and we don’t like doing it, but most people understand it,” said Notte. “I think I got voted by the majority of people to do what’s in the best interests of Sterling Heights. You cut all the services … how do you market your city? Who’s going to come to your city?”

Taylor said he can’t speculate on how his colleagues will vote, but pointed out that multiple council members have publicly touted the increase as essential.

“The tenor seems to be that the administration, that the department heads and that the people at the City Summits want a tax increase, but that’s not, in my opinion, a representative sample of the residents,” he said.

Taylor said he won’t be swayed from his stance unless municipal unions agree to immediate, “wholesale” changes to their benefits, augmented with promises of additional concessions in the future.

And even then, he added, he would only support a “nominal” increase, with a scheduled sunset next year, as a stopgap measure.

Notte said he doesn’t anticipate council to reconsider putting the increase out for public vote, which would occur too late for the 2010-11 fiscal year anyway.

“When you go to the vote of the people, you have the minority that fabricate issues that really aren’t true,” he said. “It really deceives people, and people like to believe the negative. I don’t think I want to do that.”

Councilwoman Yvonne Kniaz said officials have been discussing a possible increase for two years and have received little negative feedback beyond a handful of residents at council meetings.

She says the comments she’s fielded while around town have been positive.

“The feedback that I’m getting is that people are willing to pay the 1.9 to maintain the current services, to maintain their current way of life in our community,” she said.

In Sterling Heights, a 1.9-mill increase to the operating millage would raise approximately $9.4 million annually, meant to partially compensate for the $21 million in lost property tax revenues over the last few years.

Administrators anticipate laying off 120 municipal workers if the increase is not implemented.

Troy officials warned residents that they would need to jettison 47 Police Department employees and close the library, the museum, the community center, the recreation center and the nature center if their millage proposal failed.

But on March 1, less than a week after the vote, the Troy City Council was more vague on the ramifications, indicating it would be a gradual scaling back process.

Troy’s operating millage rate is lower (6.5 mills to Sterling’s 8.72), but Sterling Heights Finance and Budget Director Brian Baker argued that Sterling residents pay less in city taxes on average ($456 per resident, versus Troy’s $695) due to Sterling’s higher population and lower property assessments. When school taxes are figured in, he said, Troy’s taxes are higher.

Troy’s population is around 81,000, while Sterling’s is approximately 128,000.

Sterling has fewer full-time employees per resident (4.5, compared to Troy’s 5.3), even with Troy’s volunteer fire department considered, and lacks many of Troy’s municipally provided amenities, such as a golf course, museum and aquatic center, he said.

“They average 2.5 times more rainy day fund reserves than Sterling Heights,” said Baker. “We’re a little lower, because we’ve reduced our millage rate by 20 percent over the last 20 years.”

If a tax increase goes through in Sterling Heights and remains in place, it will be fresh on residents’ minds come fall 2012, when all council members — who serve two-year terms — are up for re-election, said Taylor.

“The people right now are already fed up with tax increases,” he said. “I think that if Sterling Heights City Council votes for a tax increase, they’re going to be in trouble with the voters. That election may be a referendum on what we do this spring.”

There’s one thing Kniaz, Notte and Taylor agree on: All three expressed surprise by the margin of denial in the Troy vote.

But, Kniaz said, “It has been my experience that the people that are satisfied with the way things are … are the ones that don’t come out to vote, just like they’re not showing up at City Council meetings. They think everything’s going well, and they want it to stay the way it is; they think the status quo will be maintained.”

As the consequences of Troy’s millage failure unfold, there may be a ripple effect in Sterling Heights, as Troy residents seek alternatives for their disappearing amenities, said Kniaz.

At a recent City Council meeting, Councilwoman Maria Schmidt also pointed out that resulting changes to Troy’s government structure may impact partnerships between the two communities, such as shared building inspection services.  

“What I think is going to be interesting is how things play out in Troy,” said Kniaz, “and how it affects us for the next couple of years, really.”

Sterling Heights will hold workshops to discuss the 2010-11 budget 6:30-9 p.m. April 12, 19 and 27, as well as following the regularly scheduled City Council meeting on April 20 if needed, leading up to the May 4 budget adoption.

Staff Writer Terry Oparka contributed to this report.

You can reach Staff Writer Cortney Casey at ccasey@candgnews.com or at (586) 498-1046.