On Tuesday when Michiganders go to the polls for primaries there will be politicians on the ballot, but also a lot of local property tax requests.
In Michigan, and quite a few other states, property taxes must be voted on by those who would pay the taxes. But just because they’re on the ballot and you get to vote on them, does not make them easy to understand.
Bret Witkowski is Berrien County’s treasurer. “I think our system is reasonable, I think it’s hard to understand but it is good for people to have the options to consider what they want in their community.”
Part of the confusion comes from the language, mills and millages are only used in property taxes, and they don’t make a lot of sense.
Jared Walczak is a senior policy analyst with the Tax Foundation, an independent tax policy nonprofit.
“A mill is one dollar per one thousand dollars of value so it’s one tenth of one percent. So already we’re a little different than how we usually think about tax percentages.”
And Walczak said that property value that all the taxes are based off of, is calculated like this, “Mills are against assessed value and assessed value can be very different than the actual market value. In Michigan, assessed value is 50 percent of market value.”
So for example: if you have a house in Buchanan Township, its market value is $100,000. You would pay taxes based on an assessed value of $50,000--50 percent of its market value.
On the ballot in Buchanan Township is a renewal of a millage that funds the fire department. The township is asking for 1.1872 mills. So to figure out what that will cost, treasurer Witkowski explains
“You’re taking something, dividing it by two right off the bat cause you’re getting 50 percent of value, then you multiply that by the number then you divide it by a thousand.”
So that person with a $100,000 home in Buchanan Township, would take $50,000, half the value of the property, multiply it by 1.1872, then divide by 1,000 to get $59.36.
That’s how much that property owner would pay every year for the fire department for the length of the millage, which for this one is five years, then they’d get the chance to vote again.
Also, Michigan law prohibits too much of a rise in your assessed value, so your taxes can only go up so much no matter how fast property values rise. And, the first 18 mills of tax levied on a primary residence is waived.
You don’t actually have to do any of that math in order to pay taxes though. “The property tax is unique because it’s taxpayer passive," Walczak explains. "You get sent a bill that tells you how much you owe. This is different than most taxes so you actually have a greater sense of what you’re paying in property taxes than you do in almost any tax.”
But why do we get to vote on our property taxes? We don’t vote on sales tax, and we don’t vote on income tax. Those are decided by state and federal lawmakers.
Property tax in Michigan is governed by something called the Headlee Amendment, an amendment to the Michigan constitution approved in 1978.
It requires voter approval for tax increases or new taxes, limits the how much taxes can go up when property values go up, and limits the revenue that can be collected on a millage to the amount it was originally meant to generate, plus inflation. So if property values go up, the rates can go down, but the revenue generated stays the same.
“So this is a fairly strict set of restrictions in Michigan that doesn’t exist in most states,” Walczak said.
Millages can fund just about any local project or service. There are base operating millages, millages for fire and police, for libraries, 911 centers, bus lines, roads and infrastructure, parks and trails, youth sports programs; if it’s something a local government pays for, the money can be generated through property taxes...but only if the voters say yes.
These millages can add up though. "If you look at some townships’ tax bills, it’s pretty long," Witkowski said. "Because they have a millage for this, a millage for libraries, a millage for a fire truck from 2005, millage for police, extra millage for police. I mean, they can get quite long.”
And Witkowski said a lot of them end up on primary ballots.
“I think most communities will put it on a primary because the turn out’s lower,” Witkowski said. “You don’t see a lot of ballots, you don’t see a lot of millage votes in Michigan on the November election, because I think the feeling is most people are gonna vote no.”
There are many millages on ballots across Michigan for the August seventh primary. You can look at your ballot, and check your polling place by going to the Secretary of State’s website.