NCPA - National Center for Policy Analysis


March 20, 2007

In a depressed housing market, property taxes don't always reflect true market value.   That would change under a proposal by state House Republicans, says the Grand Rapids Press.

State Rep. David Hildebrand (R-Lowell), and others are to announce their plan to combat the taxes soon.  Among the provisions:

  • Create a "supercap" to limit or prohibit increases in taxable value when market value increases less than inflation.
  • Establish a "Home Owners Bill of Rights" to make it easier to appeal assessments and putting the burden of proof regarding property values on the government, not the homeowner.
  • Reduce the amount of taxable value increase when property is sold, and equalize tax rates across the community.

Hildebrand says the so-called "pop-ups," which require new homeowners to pay higher taxes than sellers did, are a real disincentive to sell homes.

However, Donald Stypula, executive director of the Grand Valley Metropolitan Council, says the plan would only hurt local governments trying to provide essential services.  Local governments have suffered big losses as state revenue-sharing funds diminish and local governments have to rely on a steady source of income to provide services that taxpayers expect and demand.

But proponents say it would not affect local services because it limits future increases and doesn't reduce current revenue.

"We don't have a revenue problem, we've got a spending problem," Hildebrand said.  Michigan has been particularly hard hit by recession, with many losing jobs or taking lower-paying positions.  Taxpayers need whatever help they can get with the downturn in the housing market.

Source: John Agar, "Plan would stop property tax hikes in tough times," Grand Rapids Press, March 19, 2007.

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