In Hillsdale, crumbling streets but support for fixing state’s 'eyesore'

HILLSDALE - The streets are crumbling. City services are pared back. The police force is shrinking. And the budget situation is going to get even worse in the next few years.

The state isn’t offering financial aid to Hillsdale or hundreds of other cash-strapped Michigan municipalities struggling to balance their budgets. No one would blame residents if they resented efforts to help Detroit while their own city was suffering. But even in this Republican stronghold, famous as the home of a college that espouses limited government, residents who spoke with Bridge feel the state needs to help its biggest city.

“No one wants an eyesore as our largest community,” said resident Mary Wolfram.

A statewide poll of 600 Michigan voters commissioned by the Detroit Journalism Cooperative found majority support for a plan to offer $350 million to Detroit to reduce pension debt owed retired city workers and help Detroit avoid having to sell museum artwork as part of a proposed bankruptcy settlement.

Typical of that support is Hillsdale, a community that shares some of the problems, but none of the headlines, of Detroit.

“People know about Detroit,” said Gary Wolfram, husband of Mary Wolfram and a Hillsdale College professor. “But they’re not going to have an opinion of Hillsdale or Moscow or Menominee. People don’t know what’s happening in small towns.”

‘Detroit’s not alone’

Gary Wolfram grips the steering wheel of his Ford Fusion as it rattles along a street he characterizes as “one of our better roads.” Gary is a professor of economics and public policy at Hillsdale College. He and his wife, Mary, work with the city government on economic development. They know the numbers behind Hillsdale’s economic slide, and a short drive around this community near the Indiana and Ohio borders reveals the impact.

The streets are deteriorating. A large, long-closed flour mill sits crumbling just a few blocks from downtown.

Bonnie Tew, the finance director for the city, points to a thick pile of charts showing declines in property taxes and revenue sharing. Unlike Detroit, the city has avoided going into debt, but it’s not been easy.

“Detroit isn’t the only one with problems” Tew said. “The city isn’t in bad financial shape, but we’ve lost our industry. Our property tax revenues have plummeted. When we used to produce $150,000 per mill, now we get $130,000 per mill.”

The city government had 84 employees a decade ago; in the 2014-15 budget year, there will be 68 – a decline that wreaks havoc in a community where the laid off are likely to be Sunday school teachers or youth soccer coaches.

At a heated City Council meeting last week, residents complained about a proposal to cut a full-time police officer position, the third position to be eliminated in the past decade in a department of 14.

Recounting the meeting, Tew shakes her head. “Where are you going to come up with the $50,000 for that officer?” she asked.

Cutting until it hurts

Hillsdale has rising expenses and falling revenue. The top seven employers in the city are all tax-exempt. Property tax revenues dropped with the value of the city’s aging homes. The median household income was $31,535 in 2011, more than 30 percent below the state average.

To keep its municipal pension fund financially strong, the city stopped repairing streets. “Gary and I moved here in 1989,” Mary Wolfram said. “Most of the local streets have not been repaired in that time. We share a lot of the same problems (as Detroit): aging infrastructure, aging housing stock.”

Hillsdale is doing what it can to pinch pennies. The city stopped sweeping the streets a few years ago. A beach at a nearby lake that used to be operated by the city now is funded through fundraisers by the Hillsdale Rotary Club. The city council has been known to debate where to buy nuts and bolts – the local hardware store or the Wal-Mart down the road, where the city could save a few dollars.

Mary Wolfram wonders if Detroit has been managed as well. Still, “do I begrudge Detroit getting some help? No,” she said. “Whether you like it or not, you take care of people.”

That feeling is reflected by Rep. Kenneth Kurtz, R-White Lake, whose district includes Hillsdale, and may soon take part in a vote on the Detroit aid.

“There’s some commonality there,” Kurtz said. “Detroit has problems, we all read about it in the newspaper,” Kurtz said. “But Hillsdale has infrastructure problems, too. The difference is, Detroit is in the New York Times and Hillsdale doesn’t get the headlines.

“There’s no doubt the state has some responsibility to a degree” to help Detroit, Kurtz said. “The whole confidence of the state is at stake. One of the big questions is, where does this end?”

Losing a lifestyle

Nobody expects a bailout anytime soon for Hillsdale. There’s no headline-grabbing bankruptcy here, no one threatening to sell art, no retirees worried about losing their pensions. Instead, you have crumbling streets that no one knows about outside the city limits.

Still, Detroit needs support, Kurtz said. Neighbors help neighbors.

Gary Wolfram hopes that it’s Hillsdale’s turn for support soon. Otherwise, “you’re going to lose a lifestyle,” he said. “Places like Hillsdale are going to become ghost towns.”

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Tue, 05/13/2014 - 9:31am
The steady drumbeat of deteriorating infrastructure, reduced public safety and curtailed services of all sorts should be a wake up call to the Legislature. Nearly two decades of starving local government simple means that our communities are less competitive in the race to attract talented workers and the businesses that wish to employ them. When even libertarian economists start asking for more investment in public goods, its fair to say we may have gone too far in our experiment with the theory of 'low taxes = high investment.'
Tue, 05/13/2014 - 10:02am
This story is an accurate depiction of Hillsdale. I was born and raised in Hillsdale and although I no longer live there I do return several times a year to visit friends. It is very sad to see what has happened to the community. There are people and small businesses that do their best to keep the spirit of the town alive. In travels throughout other small communities like Hillsdale it is apparent the same problems exist. Our proud, hardworking parents and grandparents who loved these communities would be shocked and greatly saddened.
Tue, 05/13/2014 - 10:43am
let me give you a dose of our reality in one of Michigan's "Hospice Cities" In 2008/2009 Eastpointe’s assessed value was $879.7 million, in 2013/2014 it is $431.3 million, a 51% decline and still dropping. In 2008/2009 Eastpointe’s taxable value was $786.1 million, in 2013/2014 it is $430.4 million, a 45% decline (52% on residential) and still dropping. In 2008/2009 Eastpointe’s general property taxes raised $15.4 million for operations, in 2013/2014 it is $8.5 million, a $6.9 million annual reduction and still dropping. In 2008/2009 Eastpointe spent $18.6 million on general operations, in 2013/2014 it is $13.3 million, a 29% reduction with minimal impact to residents. In 2008/2009 Eastpointe spent $3.7 million on costs for general operations retirees, in 2013/2014 it is $5.2 million, a 42% increase. At the end of 2008/2009 Eastpointe had fund balance of $13.0 million, on June 30, 2016 Eastpointe is bankrupt. Eastpointe has not been corrupt like a large city on our southern border. Eastpointe has not been mismanaged like some surrounding cities. Eastpointe has been well managed and aggressively addressing financial issues for the past decade. Pay cuts and/or reduced hours have been implemented. Pensions have been reduced for existing employees or pension contributions have been increased, with new hires going into DC plans or a hybrid DC/DB plan. Healthcare changes have moved significant burden onto the employees, but the premium costs keep going up. Thanks Affordable Care Act. Fulltime staffing has been reduced from 180 in 2003 to 105 today. Consolidation and new authorities have been created to save money. There is nothing left to cut except providing a bucket brigade for fire service and Barney Fife as police protection. State statues prohibit us from asking residents to increase their taxes to maintain current services. Legislation being contemplated in Lansing, if fully implemented, would allow us to raise taxes to levels still below 2008/2009 and still leaving us in a deficit. Even if housing values increased substantially, Proposal A and Headlee will prevent us from seeing and of that benefit. I have served on the State Treasurer’s local government task force and presently sit on the SEMCOG local government revenue task force and speak to treasury officials constantly regarding the municipal funding crisis. NO option such as fees or charges replaces the loss of property taxes since the great recession and our point is even stable governments face this issue.
Charles Richards
Tue, 05/13/2014 - 3:06pm
Mr. Duchane seems commendably well informed, so I'm reluctant to question what he has to say, but I'm curious about the possibility of an override of any accumulated Headlee rollbacks. Has Eastpointe experienced Headlee rollbacks over the years? If so, would the citizens of Eastpointe consider voting to override those rollbacks and increasing their tax rate to what it was before the rollbacks? The same goes for Hillsdale and other communities that find themselves in financial distress.
Charles Richards
Tue, 05/13/2014 - 3:27pm
Mr. French says, "The state isn’t offering financial aid to Hillsdale or hundreds of other cash-strapped Michigan municipalities struggling to balance their budgets." What would be the point of the state offering financial aid to these communities? Where would the state get the money? From these very same struggling communities. If those communities can afford to send more money to Lansing, why can't they afford to enact Headlee overrides of past Headlee rollbacks and use the money directly rather than send it on a round trip to Lansing? Mr. French's statement that " The median household income (of Hillsdale) was $31,535 in 2011, more than 30 percent below the state average." is not particularly helpful. It would be of more interest to know how Hillsdale's median income has varied over the years.
Sat, 05/17/2014 - 11:33am
Don't just worry about Hillsdale, the whole country is not far behind! The problem is the job market and low wages which decrease the tax base. I see no hope for the vast majority of Americans. We are on a race to the bottom. Read Pat Buchanan and his article on the "The roosters have come to roost". Or any of his other articles on "free trade" or shipping out our industrial business and chase the dollar.
Sat, 05/17/2014 - 11:35am
Sorry, it's the chickens!
Sun, 05/18/2014 - 7:09pm
The seven largest employers are all tax exempt says all we need to know about Hillsdale and many other cities problems. The largest growing segment of the economy seems to be the tax exempt segment. Often these groups are simply a means to shelter income and pay their execs huge salaries while the communities they "serve" disintegrate. Most tax exempt groups should lose that status and pay their fair share like any other business. If they can't make it competitively, they shouldn't exist.
Barbara S.
Sun, 05/18/2014 - 8:40pm
After reading "Imprimus," a publication from Hillsdale College, a few times, I would think that they would need to "stand on their own two feet" and not look for handouts. Isn't that what the college and town are all about? Bashing liberals and moderates and then looking for government money at any level seems really strange. Barbara S.
Ted J
Sun, 05/01/2016 - 9:36pm
And what they don't tell you is of the 7, Hillsdale College is the largest one, the one that uses the most city services yet they pay nothing for them. A recent effort to get a minimal pilot payment from them, to offset some of their use of services, was meet with a flat no, by a city council who the majority of works for the college. If this ever has been a case of can't seeing the forest through the trees, this has to be it, as Hillsdale College fidles as the city decays. Now, that's no entirely true, Mary Wolfram the cities economic director, who's husband works for the college, has been somewhat successful in getting grants... but just for the area around the college.
Joseph Hendee
Tue, 08/30/2016 - 6:50pm
They have no creditability with me. Their not part of Hillsdale's fix their part of the problem.
Joseph Hendee
Tue, 08/30/2016 - 6:54pm
Hillsdale's 2016-2017 Budget General Fund. The following graph is a snapshot of what the General Fund revenues and expenditures might look like in the next five years based on a certain set of assumptions. This graph is a part of the Financial Model completed by Municipal Analytics as part of the Income Tax Feasibility Study. The purpose of this graph is to assist the administrative staff and elected officials in future difficult decision making. With this model different assumptions can be instated to see what affect they would have on future budgets. This information was included here for strategic planning and decision making analysis only. As time progresses, these assumptions will change, ultimately altering the outcomes depicted here. The black line running across the bottom of the graph is the General Fund balance. Based on these assumptions, the City's $940,000 fund balance would be completely depilated by June 2020.