How Proposal A helps Property Taxes in the State of Michigan
MICHIGAN. -- Since 2014, property tax evaluations and property taxes have risen steadily, showing gradual increases over the last decade, with a .56 percent increase over ten years.
But even with the constant rise, why haven't there been crazy rises individually for homeowners in our area?
ABC57 caught up with Certified Tax Assessor Shalice Northrop, who says it all began back in the 90s, with the passing of 'Proposal A'.
"So in 1994 Michigan voters passed what we call Proposal A which put a cap on the increase in the property taxes. So if you've owned your home and you haven't done any improvements that would cause your value to increase because of new construction, your taxes are going to go up the consumer price index or 5% whichever is less, unless there are additional millages voted in. But for the most part, they're only seeing increases of the consumer price index or the rate of inflation," stated Northrop.
Northrop said this cap is part of the reason we haven't seen soaring numbers like Indiana has.
However, she says the cap does not apply to new homeowners.
"So we still reassess every year to keep the properties at market value, or we try to keep them at 50% of market value, because the year following a transfer of ownership, the taxes will take a large jump, usually because the taxable value is what we pay taxes on, and that instead of just taking the inflation rate increase, they will uncap and becomes the same as the assessed value. So those properties will see a large increase the first year following a transfer of ownership."
Here are the numbers across Michigan the past 10 years for Property Tax Collections and the Millage Rates:
Prop Tax Collections: Millage Rate:
2014: 13B 40.8%
2015: 13.5B 41.1%
2016: 13.7B 41.7%
2017: 14B 41.7%
2018: 14.6B 42%
2019: 15.3B 42.1%
2020: 16.1B 42.4%
2021: 16.5B 42.2%
2022: 17.5B 42.1%
2023: 18.8B 42.1%
2024: 20.3B 42.2%