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The Michigan Municipal League is warning that a proposal to eliminate property taxes in Michigan would have devastating effects on services provided by state and local governments.
The Ax MI Tax proposal would eliminate more than $17 billion in property tax revenue for local governments. It would also make it more difficult to pass future tax increases at the state or local level.
Property taxes account for about a quarter of local governments’ revenue in Michigan. They fund things like public schools, libraries, parks, trash collection and emergency services.
Michigan Municipal League deputy executive director Tony Minghine said the proposal would “destroy government as we know it.”
“It would have just incredibly devastating economic impacts, not just on services, but the viability of the state,” Minghine said. “I mean, you have to really ask yourself who would want to live in a place that had essentially no government services.”
Click below to watch the 27 minute discussion.
The lost revenue would be partially offset for local governments by giving them a greater cut of the state’s sales, income and excise taxes.
But he says that would eliminate about $4 billion from the state’s general fund and still wouldn’t fully make up for the revenue local governments would lose.
Karla Wagner is a Republican candidate for governor and the organizer behind the proposal. She says things like zoos, libraries and public transit that currently receive funding through voter-approved millages should instead be paid directly by the consumers.
“There’s no reason why the state can’t tighter their belt or the schools have to tighten their belt,” Wagner said.
But Minghine said the idea that “everything is a luxury and if you use anything you should pay for it directly” is an “absurd concept” and would have the “single biggest detrimental impact … of anything that’s ever happened in the state.”
“It would be economically devastating, because you’d create a place that would have such limited value and be so undesirable, that I think you’d see both people and businesses with no choice but to leave the state,” Minghine said.
The proposal would need to collect more than 446,000 signatures within a period of 180 days to make the ballot in November 2026. It failed to gather enough signatures to make the ballot in 2024.
Michigan House Speaker Matt Hall (R-Richland Twp.) has said he plans to put forward a property tax reform proposal of his own, but does not support completely eliminating the revenue source.
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