Friday, November 27, 2009

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 acheived 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 reduceing millage 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 aleviate 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 homstead 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 proprty values,you will now begin to see more Truth in Taxation Hearings. Local governing bodies can increase millage rates up to the maximum allowable truth in assessment / equalization millage by simple ordanance 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 millage. This is also true of all the other government millages in Michigan.

Another interesting restriction that was created under Proposal A was a requirement that no increase over the then authorized operating millage 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 millage hikes.

Very few have succeeded.

The schools of Washtenaw County — including Ann Ar­bor, Ypsilanti and Saline — asked voters to approve en­hancement mills on Nov. 3. Property taxpayers in the Washtenaw Intermediate School District would have paid an extra 2 mills for 5 years had the request been ap­proved.

It passed in Ann Arbor, but got hammered elsewhere. The final tally was 57.4% no to 42.6% yes.

“We knew that this was a bad time” to be asking taxpay­ers for more money, said Ann Arbor Public Schools commu­nications director Liz Margo­lis. “But we just had no choice.” With state help in decline as state revenues shrink and the likelihood of more bad news to come, a countywide discussion had been under way for a year, Margolis said. Ann Arbor vot­ers had a history of support for school millages, and district of­ficials led the campaign.

But while Ann Arbor voters kept their reputation intact, the measure lost by margins of up to 3-1 in some out-county communities such as Milan and Lodi Township. Margolis said schools won’t try again soon and would give it another shot only if every school dis­trict in the intermediate school district, or ISD, would “buy in and really try to sell it.”

So far, talk about enhance­ment- millage requests — re­gions can ask for as much as 3 mills and use the money for any purpose — has been muted around the state.

David Martell, executive di­rector of the Michigan School Business Officials, said that for years after Proposal A took ef­fect, school funding was secure and obstacles to winning re­gional approval for tax hikes were so high, that few en­hancement elections were held.

“It’s a very, very hard sell,” Martell said, chiefly because the cost and benefits are usu­ally unbalanced across an ISD because the tax is assessed on property wealth and distribut­ed on a per-pupil basis.

But financial conditions are rapidly worsening in so many districts that Martell said the bar for passing a millage could drop.

“I don’t know why” en­hancement- millage requests “haven’t taken hold more re­cently,” he said. “I think once parents start to feel the real impact of the cuts that are coming … they might turn to something like that.”

Voters in Kalamazoo Coun­ty approved a 1.5-mill regional tax in 2005 and renewed it by a wider margin in 2008. But Kal­amazoo Regional Superinten­dent Ron Fuller said that un­less economic anxiety in Michi­gan lightens by then, “it will be a tougher sell a year and a half from now” when it is scheduled to expire again.

Doug Drake, a financial ana­lyst with Public Policy Associ­ates in Lansing and former state budget official, said that if state lawmakers decline to approve higher taxes to re­store school funding, more dis­tricts may have to consider joining for enhancement ef­forts.

“When the checkbook in the sky is empty, you just may have to think about going door-to­door. There aren’t very many other options,” Drake said.

Governor Granholm and the legislature understood this when they refused to reduce the budget in other ways, while alowing cuts to education. If you can not get the legislature to raise taxes, put the pressure on parents to do the job.

I for one am tired of excuses and the blame shifting. The Governor and the legislators are paid to do a job but they keep shiftng the hard stuff on to the taxpayer and disclaim any personal reponsibility. Enough is enough! We need to make them do their job or remove them and keep them from any future office.

1 comment:

RGeorgeDunn said...

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?