Ann Arbor Dedicates Cannabis Tax Revenue to Social Services in New Budget

May 21st, 2024 Legislation & Policy Updates
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On May 20th, the Ann Arbor City Council unanimously adopted a new city budget, designating $1 million from annual cannabis tax revenue for social services aimed at marginalized communities.

The allocation includes $500,000 to support the Rising Hope for Housing program, an increase from the previous year's $400,000. This program aids individuals disproportionately affected by the criminal justice system and the war on drugs, focusing on people of color and low-income residents. Services offered include mental health counseling, housing advocacy, and job training, all aimed at preventing homelessness and reducing recidivism.

"The Rising Hope for Housing program is transforming lives by offering essential, trauma-informed services like mental health counseling, housing advocacy, and job training," said Council Member Cynthia Harrison, D-1st Ward.

Additionally, the council allocated $250,000 for eviction-prevention efforts and another $250,000 for services targeting low-income youth. This year, Ann Arbor's share of Michigan's cannabis tax revenue amounted to over $1.5 million, with City Administrator Milton Dohoney setting aside $1 million for the council to allocate. The remaining funds will support various initiatives, including partnerships with the Shelter Association of Washtenaw County and Michigan Medicine, as well as community programming in a new affordable housing project on Catherine Street.

The adopted budget for the 2024-25 fiscal year, starting July 1st, includes $607 million in revenue and $564 million in spending across all funds. This budget necessitates a $2.8 million draw from cash reserves to balance the general fund, where expenses are projected to rise by $9.5 million, or 7.6%, to over $140 million. The increased costs include expanding the city's workforce from 829 to 849 full-time-equivalent positions, with new roles in parks, planning, and building departments.

Two new positions prioritized by city leaders—a director and a coordinator for a new economic development office—are included in the budget. However, council members were divided on a proposal to allocate an additional $100,000 from cash reserves for printed communications to constituents, which passed despite some opposition.

A separate proposal by Council Members Travis Radina and Ayesha Ghazi Edwin to prioritize $250,000 for crosswalk upgrades on Stone School Road was rejected. Council Member Erica Briggs, D-5th Ward, emphasized the widespread need for such improvements citywide, while Radina expressed pride in the overall budget, highlighting its commitment to community values, including sustainability and pedestrian safety.

Briggs and other council members anticipate that new investments in economic development will generate additional tax revenue in the coming years. Council Member Jen Eyer, D-4th Ward, highlighted the importance of the new economic development office for addressing the city's housing crisis.

City officials are also planning significant changes to zoning and land-use policies, necessitating $100,000 for external planning consultants. Eyer stressed the urgency of these changes to support housing growth.

"This is a balanced budget that accomplishes what our community demands — to improve basic services and enhance quality of life," said Mayor Christopher Taylor. "It does so with momentum, vision, and practicality."

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