November 29, 2009

Is Proposal A on the Ropes?

WayneCountyTaxpayers Inc: I Must Be Precient
When the effort for passing Proposal A was in full force in 1993,I worked my heart out trying to defeat it. Some people thought I was crazy. There was no question that assessments were out of control as well as the property taxes they generated. My argument then is the same as it is now. It was the method they chose that I was opposed to. A tax reduction could have been achieved by something as simple as reducing taxes from 50% of true cash value to say 40% of the true cash value of the property.

They on the other hand had to make it complicated and bate one segment of the population against the other. While Proposal A did slow the taxation rate by reducing mileage rates and slowing taxable values for some, other were picking up the burden as property changed hands through sales or inheritance. Right now, two families living in identical houses in the same subdivision may be paying drastically different amounts of taxes for the same services because one person has lived in their house longer. The crash in our property values has helped to alleviate that problem for some but it has not eliminated it. When we go to sell our homes there are fewer buyers because the tax will then be applied to the State Equalized Value of our property making the payments to expensive.

Proposal A had all kinds of enabling legislation that went into effect. We got an increase in the sales tax and gas tax. Inflation helps to increase those taxes. Given the way the federal government is spending money, we will soon see a huge increase in inflation and taxes. We got a different rate of tax on our non homestead property. Another thing that came to fruition was an increase in requests for bonds and sinking funds for schools, which are still allowed.

Due to the decline in property values,you will now begin to see more Truth in Taxation Hearings. Local governing bodies can increase mileage rates up to the maximum allowable truth in assessment / equalization mileage by simple ordinance or resolution instead of a vote of the people. This can be done because the revenue generated under Proposal A will not equal last years revenue plus inflation without increasing the mileage. This is also true of all the other government mileages in Michigan.

Another interesting restriction that was created under Proposal A was a requirement that no increase over the then authorized operating mileage could be passed unless it was done on an intermediate school district level. Each County wide region is allowed a 3 mil enhancement if approved by the voters.
Multi-district tax a tough sell, but that could change



With state aid in peril and federal stimulus funding that came to the rescue this year set to expire, is it time for Michi­gan's local school districts to turn again to local taxpayers?

Some have exercised a rare­ly used option under 1994's Proposal A to seek multi-dis­trict mileage hikes.

Very few have succeeded....(cont here)

my comment:
This puts the finger right on the hemorrhage that is about to come in Michigan.  Michiganders, even those with jobs, are having a hard time with their cashflows and the last thing they worry about is the property tax payments down the road.  What is coming is possibly worse then the 1930's when the State had to waive all those who were behind in property taxes, just to keep everyone in their homes.
When Former Governor John Engler came by selling the Proposal A plan, he was asked' "how will taking control of a local matter at the State level help?  He had no answer?
We need to put the Proposal A back on the ballot for Repeal or shift the homestead School property tax over to the Sales tax.  Imagine what the budget item for Homestead refunds will be this year?

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