On March 18th 2009 the Michigan Senate approved a new property tax change, that if approved by the House will appear on the 2010 ballot. The constitutional amendment, that was passed in the Senate 29 to 8, would stop property taxes from rising even as the assessed value of a home declines.
Currently the law states that the taxable value of a home may not raise more than that years rate of inflation or that of 5 percent, which ever is less. As the recession and housing crisis continue, more often than not a homes taxable value will be raised as a result of the inflation, when the actual value of the home continues to decrease. .
Republicans in the Senate are arguing that it is not fair that taxes raise on a home when the value of the property is decreasing. The measure would help 50 to 60 percent of homeowners, all of those who have been in their homes for a long period of time. New homeowners would not be effected much because the taxable value is close to that of the states equalized value.
Most Democrats are saying that if the measure passes, the strain on education and local governments would be too much. A total of 253 million would be taken away from K-12 education, police, and firefighters. They don't believe that now is the time to cut spending on these services.
Many upset homeowners see it as a huge relief in the current economic times. It is just a question of whether or not they are willing to forgo public services to help their pocket books. As the measure hits the House, homeowners have the possibility of having to make a decision on the 2010 ballot.
For information on current property taxes, see my policy brief on Michigan General Property Tax.
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