MI: Business Leaders Back SMART Millage With Future of Bus System at Stake

July 31--Each year, several million riders in metro Detroit board a SMART bus to get to and from work. The fear of leaving all those riders stranded without a ride has convinced business and economic leaders in the region to support a tax increase for the SMART system in the Aug. 5 primary.

On Aug. 5, voters in Wayne, Oakland and Macomb counties will be asked to approve a tax increase to support the Suburban Mobility Authority for Regional Transportation (SMART) bus system.

Of SMART's 11 million annual riders, about 70% involve people getting to and from work in southeast Michigan. But SMART's General Manager John Hertel says that the system is so strapped for cash that it will have to shut down next year if it doesn't get the increased millage, which will let SMART replace about 250 aging buses that the system operates.

Carmine Palombo, deputy executive director of the Southeast Michigan Council of Governments, said he couldn't predict exactly when or if SMART might shut down without a "yes" vote on the millage, but he agreed that SMART would be in deep trouble if the millage fails.

"Costs and needs continue to go up, revenue is not keeping up so at some point service goes down, and if it goes down beyond a certain point, you have to ask yourself is what I am providing viable," Palombo said. "With no new federal or state dollars coming in, and if the millage fails, no money coming in, SMART is in trouble and faces a limited future for sure."

Some Tea Party activists have spoken out against the tax increase, but the SMART millage has drawn widespread support from regional political leaders and has been endorsed by both the Detroit Free Press and Detroit News editorial boards.

Matthew Gibb, deputy county executive for Oakland County, said county leaders strongly support the SMART millage.

"For us in Oakland County it all starts with a job," he said. "SMART provides accessibility. Whether it's 500 jobs or 5,000 jobs that are dependent on it, they're all equally important to us. So the county is fully supportive of the ballot question going forward."

Pamela Moore, president and CEO of the Detroit Employment Solutions Corp., the city's nonprofit workforce training agency, noted that 60% of employed Detroiters work outside the city's limits. "And with 1 in 5 Detroiters not having access to a private vehicle, the ability to make connections to public transport infrastructure, which includes DDOT, SMART, and soon M-1 Rail, is a key enabler in getting Detroiters access to jobs," she said.

And Sandy Baruah, president and CEO of the Detroit Regional Chamber, said the business-membership group strongly supports the SMART millage.

SMART gets about 35% of its $110 million annual budget from property taxes, but this source of funds has dwindled in recent years as property values declined in the real estate crash that accompanied the Great Recession. So SMART is asking voters to approve an increase in its tax rate of from 0.59 mill to 1 mill, about $41 for each $100,000 of taxable value.

The millage would generate about $27 million a year, allowing SMART to start buying new buses to replace its rapidly aging fleet. The millage would expire after 2017.

SMART buses have been driven an average of 500,000 miles, Hertel said, and are reaching the end of their expected useful life.

State law does not allow SMART to operate at a deficit, so Hertel says the system would likely shut down next year without the millage hike. The SMART system has lost about $48 million in revenue since 2008 and has economized by cutting salaries for employees.

Some day, Hertel said, SMART may become part of a larger system operated by the relatively new Regional Transit Authority. But the RTA remains in its early formative stage and Hertel said SMART will be needed to operate independently for some time to come, making the millage increase critical to its future.

Contact John Gallagher: 313-222-5173 or gallagher@freepress.com. Follow him on Twitter @jgallagherfreep.

Copyright 2014 - Detroit Free Press