Buying in the city of Ypsilanti? No income tax — but the city's still paying off a big debt

If you’re looking at the city of Ypsilanti, here’s the tax picture. Like Ann Arbor and the rest of Washtenaw County, Ypsilanti has no city income tax — but it’s not for lack of trying. Facing tight budgets, city leaders asked voters to approve one twice: in 2007 and again in 2012. Both times voters said no (the 2007 version lost about two to one). The proposal was the usual Michigan setup — 1% on residents and 0.5% on people who work in the city, including the thousands employed at Eastern Michigan University. The reason it kept coming up is a debt called “Water Street.” In the early 2000s the city took on about $30 million in debt to clean up and redevelop a stretch of riverfront land, but the developer pulled out after the 2008 housing crash, leaving the city holding the land and the loan. Ypsilanti is still paying that debt off — payments run through 2031 — and it’s a big reason the city’s taxes run relatively high and its budget stays tight. None of this is an income tax (that was rejected), but if you’re comparing the city of Ypsilanti to the surrounding townships, know the city carries this extra weight. Check the exact rate for any specific address before you buy.