Three competing proposals would bring property tax relief to Michigan residents.
Local governments and public schools rely on property taxes and revenue sharing from the state to fund operations, including police and fire services, road maintenance, snow removal, parks and recreation and more.
The taxable value of a property can increase every year by the rate of inflation, with a maximum increase of 5%, and some residents are feeling the strain.
#1 Whitmer proposes senior refund expansion
Gov. Gretchen Whitmer is proposing a 10% property tax refund for eligible seniors through the Homestead Property Tax Credit. If approved by the Michigan Legislature, the plan would provide savings to more than 355,000 seniors, Whitmer’s office said. It would provide an estimated $90 million of tax credits.
#2 Senate proposal would expand Homestead credit eligibility
Sen. Sarah Anthony, D-Lansing, would expand eligibility for the Homestead Property Tax Credit by raising the maximum income limit and making it more accommodating of joint filers. Currently, the full credit is unavailable to households with an income over $60,700, even for those filing jointly. Her plan, which is cosponsored by Sen. Michele Hoitenga, R-Manton, would provide about $399 million in property tax relief.
Since the Homestead Property Tax Credit is applied to income taxes, the proposals would be funded through the state’s budget, which means the budgets of local governments and school districts that rely on property taxes would not be directly affected.
#3 House Speaker calls for broader tax overhaul
House Speaker Matt Hall, R-Richland Twp., is calling to eliminate:
- Personal property taxes
- Real estate transfer taxes
- The State Education Tax and the pop-up tax, which is applied to homes newly on the market. He said he would also mandate a utility rate cut.
He said he would also mandate a utility rate cut.
He has proposed taxing certain services to offset the costs of the estimated $5 billion property tax and utility rate cut.
Local officials warn of slow erosion
Delta Township Manager Brian Reed said local governments are already being asked to do more with less. Even if funding is kept flat, he said local governments are feeling the effects of inflation.
Reed said cuts to local governments may not be noticed immediately because the impacts are gradual.
“When you hit the crisis moment and you’re laying off police or firefighters, that’s when it tends to garner more news,” Reed said. “I think the slow erosion of municipal government has more of a cumulative effect.”
Deferring maintenance and falling behind on hiring can eventually lead to bigger consequences, like not having the staff to apply for grants, Reed said.
Tax fatigue in Delta Township
Delta Township Treasurer Dennis Fedewa said the township has some of the lowest property taxes in the region, but “most people don’t necessarily accept that fact.”
He said the township does its best to give residents the breakdown of revenue per jurisdiction and millage so they understand where their property taxes are going.
“Sometimes, it just falls on deaf ears, or it’s just too cerebral for them to really take in,” Fedewa said.
Residents in Delta Township may have reached a saturation point for additional taxes, Fedewa said.
- Voters rejected public safety and public transportation millages last year
- Proposals that passed did so narrowly
Voters rejected public safety and public transportation millages last year. Proposals that passed only did so narrowly, Fedewa said.
The public safety millage’s failure led to the township passing a special assessment to fund continued road patrol services by the Eaton County Sheriff’s Office, which doubled in price from $4 million annually to more than $8 million.
“That added to the anxiety of a large number of our residents having a real withdrawal of blanket support for property tax increases,” Fedewa said.
Fedewa said tax reform proposals come up every election cycle, but leaders often avoid discussing the impact on local services like police and parks departments.
“They just say we can reduce your taxes by this amount and, oh, we’ll deal with the cost later and, you know, it’ll be pretty harmless,” Fedewa said. “But they won’t show, and they won’t talk about, where the cuts are going to come from and who’s going to be affected.”
