Tax increase not likely to help IR streets much
RON RIVER—For those who were hoping that the passage of a state ballot proposal in May to increase the sales tax would produce revenue to help the city of Iron River deal with some of its crumbling local streets, well, don’t get your hopes up.
That’s the word from Iron River City Manager Perry Franzoi, who reported on the topic at the council’s regular monthly meeting Jan. 21.
“The way that this is structured, there is going to be no change in the Act 51 allotment,” Franzoi said in discussing his report to the council. “So what that means is that the major streets are going to continue to get more money, the local streets will continue to get less money.
“So even if (the voters) pass this, don’t expect streets in the city to receive a lot of money for upgrades. Until the formula is changed, the likelihood of us getting money for local streets is very, very slim.”
The Act 51 split gives 39 percent to county road commissions, 39 percent to the Michigan Department of Transportation and 22 percent to local units.
The sales tax increase from 6 percent to 7 percent would increase revenue by an estimated $1.2 billion per year for roads. But not all of that money would be split according to the formula in the first two years of implementation.
Only in the third year would the entire $1.2 billion begin to be split by the above formula.
Even then, the local street fund may not be helped all that much, Franzoi said.
“I am skeptical that we will see a large increase in money, especially for the local street fund,” Franzoi wrote in his report. “This does not appear to