Any commentary from Duggan and his backers and supporters about vacant parcel taxes is just a little bit disingenuous unless recently imposed drainage fees are mentioned as part of the burden.
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Any commentary from Duggan and his backers and supporters about vacant parcel taxes is just a little bit disingenuous unless recently imposed drainage fees are mentioned as part of the burden.
My 80 year old home that I bought for $6000 7 years ago,now valued at $220 has increased in taxes from $450 to now $540,another house that I have valued at $320 and non homestead is $1800.
To get into a $4000 a year in property taxes it would take a $500k home.
Under the Save our homes program,I am capped at 3% increase,plus multiple different caps,veterans,older no school taxes,after 65 less taxes etc.
It does not matter if the house next to me sells for $1 million,it does not effect my taxes,just the next buyer and my caps follow me if I sell and purchase.
The whole intent was to keep people in their homes long term in order to stabilize neighborhoods.
When you look at taxes in Detroit it mimics most northern industrial or past industrial cities with the exception of what you get in return.
I have looked at lots of cities in the south that make Detroit look like Paris but share the same rates,the only difference is they are just abandoned,buildings are still there and there are more large potholes and water fountains from leaking water mains then actual pavement.
I think in Michigan the problem is the system that was there to support a larger population never really adjusted to accommodate a lower population or the same amount of government providing the services or lack of.
It no different then us,when our income changes we figure out how to stay within budget and trim the fat.
It’s like they are not looking at the root cause,you can say legacy costs but with all of the tax credits being handed out it’s extending the legacy costs to future generations and not lowering costs to existing taxpayers,which is the whole intent of development,it’s like paddling upstream by design.
But then again people seem to be adamant about supporting a system that is strangling them,so you get your reward,the problem is instead of changing it most are just leaving compounding the problem.
The bankruptcy was supposed to be a wake up call but sometimes it is like people went back to sleep after it was over.
I guess that is the most puzzling part,why is it that some cities can provide a full range of services to the taxpayers at a affordable rate while others struggle to do so at double or triple that rate ?
All the proof of failure is right in your post. Stay in your house for “many Years” never pull a permit, add on etc… then you benefit. Have a growing family? - your screwed. Want to upgrade business or home?- more screwed. Thinking of moving here for a new job?- absolutely screwed because you’re coming from somewhere with a much lower property tax rate.
The way the property tax laws are they actually encourage by financially rewarding economic stagnation. Or, getting the hell out of Michigan…
"I guess that is the most puzzling part,why is it that some cities can provide a full range of services to the taxpayers at a affordable rate while others struggle to do so at double or triple that rate ?"
I'm guessing that those cities didn't experience such a drastic population/tax loss. There is still 140 sq. miles of infrastructure to maintain and many buildings are not even subject to property taxes. There must be hundreds of "churches" in the city getting a free ride on this exemption.
Yes. It's mostly just the low tax base. Required city expenditures don't scale up and down with city assessed values, so in order to keep even Detroit's relatively low level of city services functioning, Detroit needs higher tax rates than a city with more taxable value and less infrastructure to maintain. It was absolutely hopeless prior to bankruptcy, because of Detroit's gigantic legacy costs from the much larger workforce of the past, and it's still not easy. That's not the only thing going on, but it's most of it.
What is clear is the property tax is becoming a smaller and smaller piece of revenue generator for city services. At this point why keep such a punishing tax that prevents capital improvement to structures when it has turned into such a bureaucratic nightmare to manage? Keeping folks employed to decipher the myriad of abatements, NEZs, economic hardships, assessments, etc.. isn’t a good enough reason. Replace the income with new tax vehicles with no bureaucracy and move the heck on to a growth era.
https://detroitmi.gov/sites/detroitm...%20%283%29.pdf
City of Detroit residents have a $7,800 legacy cost debt with most comparable cities being in the $12,000 range.
New York as an example $18,411 per citizen
Country wide national debt is $9,700 per citizen
Michigan as a whole does not even rank in the top ten
Wyoming is at $3,347 per citizen.
So as a city you are actually about or a bit lower and a lot lower then some in the average U.S. city and state.
Detroit as a city and when it comes to population loss,is not alone and as much as people like to beat on it like it is the worst place in America,it’s actually not,and in a much better position then a heck of a lot of other city’s.
So your legacy cost debt,although a factor,is really not out of line with the rest of the country.
Its not what is drowning you because it is a cost incurred just like any other city has through the decades,infrastructure decline or not,population decline or not,you are middle road.
It’s a debt but comparatively in the bigger picture it’s not as much as a mitigating factor like it is constantly being pushed as.
That number is always going to be there,the only way to change it is by going crazy with hiring a bunch of unnecessary city employees that would increase it in the future,you are also middle road with amount of city employees per 100,000 citizens so it is in line for future obligations.
How to deal with aging infrastructure is not a city of Detroit specific problem,it’s country wide and is just another one of those things that is a part of running a city.
To me anyways,you do need need to come up with hair brained schemes in order to lower property taxes,because all it is doing is kicking that can down the road for future generations,you guys already know and have pointed out core issues that are effecting property tax rates.
If the core issues are not going to be addressed and enforced creative bookkeeping that looks to increase a revenue source is like putting a bunch of nice apples on top of the bushel in order to cover up the bad apples underneath so it looks nice to sell.
That’s how this mess got created in the first place,putting the shiny apples on top of the rotten ones,until one day the rot transferred to the top ones,then none of them were sellable.
^ Doesn't Illinois have a massive per capita state debt.... nevermind, I'll check... YIKES!!
Experts with Truth in Accounting examined state financial reports for fiscal year 2021 to determine Illinois failed to pay $210.5 billion worth of its bills, leaving each taxpayer responsible for $49,500 in debt. Illinois ranked third-worst in the nation, rating an “F” for fiscal management.
Yea,I think that is why Detroit is a favorite whipping post,it makes for a good distraction for the others whose house is not in order and is in far worse shape.
The only difference is they have more shiny trinkets that covers up the bad stuff.
The biggest question is what is the real property tax rate or obligation not based on the $600 million that 175,000 properties were overcharged?
It does not help matters much when you artificially inflate property taxes and remove the ability of the taxpayers from being able to get a clear picture of where they stand.
It’s almost like the age old marketing ploy,jack the price up before the sale then give a discount as a sale so people think they got a reduction in price when they actually did not.
Heh, I admire your spirit. ;)
I was more curious about how it was originally justified to the public, or even whether it was justified to the public.
If the former, maybe we could learn to avoid such mistakes in the future. If the latter, we might have a case of taxation without representation.
Or maybe no one remembers? I'm just trying to scratch a legislative archaeology itch here.
I think most agree that the result of the original tax structure was suboptimal {an understatement}.
For every seemingly valuable lot that the Illiches knock down with our money, and then illegally operate as a parking lot in downtown, there are probably another 300 worthless lots in other parts of Detroit.
If you tax those lots too much, no one will hang on to them or purchase them. Then instead of being able to tax the owners $30 million, and force them to mow the lots, and write them blight violations if they don't, the city would instead have to pay $72 million to maintain them.
For sure the tax on them could be raised a bit, but the City needs to be careful.
This 2013 article might be relevant:
How a Progressive Tax System Made Detroit a Powerhouse {and Could Again}
Quote:
...From 1890-1930, Detroit's population boomed from 205,000 to 1,569,000, the fastest growth of any US city. The auto industry did it, but why Detroit? Detroit had produced horse-drawn carriages from hardwood lumber, but so had other places. It was not low wages; Detroit paid better than most -- that's why so many people rushed in. It was not business-dominated politics; Michigan was a Progressive, Bull Moose Teddy Roosevelt state. It was not low taxes on wealthy "job-creators"; Michigan relied on high state and local property taxes. As most people recognized in those days, {and as we have documented here and here}, property taxes are wealth taxes, dramatically more progressive than income taxes.
Detroit Mayor Hazen Pingree, 1889-1897, was an early Georgist Progressive. He supported the idea of American economist and reformer Henry George {1839-1897} that all taxes should be shifted onto land and other natural resources. Today, Nobel-Prize-winner Joseph Stiglitz advocates this as the "Henry George principle." Applied to cities, it means raising property tax rates on land and lowering them on buildings. In cities, poor renters own no land, heavily-mortgaged middle classes own very little. So shifting taxes to land turns property taxes into wealth taxes on steroids. Better yet, taxing land discourages rich speculators from holding valuable property out of use. Mayor Pingree was a mentor to and model for the Georgist soon-to-be Mayors Tom Johnson and Newton Baker of Cleveland, and Samuel Jones and Brand Whitlock of Toledo.
The crash of 1893 hit Detroit soon after Pingree's election. The city was riddled with vacant lots held by land speculators; Pingree arranged for the unemployed to plant vegetables. "Pingree's Potato Patches" inspired other cities to follow. Meanwhile, he had campaigned for "higher taxes on the vast landed estates of the city"; when big industries threatened to leave town, he responded by raising just the land assessments. This won the support of small business....