If you haven’t heard, news headlines emerged and flooded the internet on local Michigan news stations talking about Michigan property taxes being completely eliminated, which would save Michigan taxpayers $14 billion a year. My opinion about it is….
Property taxes are the only taxes where someone is at risk of losing their home if they don’t pay it, and you have no choice. Those were the words right from the mouth of Karla Wagner who started the AxMITax proposal to completely eliminate property taxes and get this issue onto the November 2024 ballot.
This has been an initiative that’s been 4 years in the making according to WXYZ detroit news. But she's not the only one who is fed up with the Michigan property tax increases over the years as home values have skyrocketed. I have gotten more emails than I can count on my hands from people who view my channel to hear my thoughts about this recent headline and to shed my thoughts on the matter, so here we are.
This headline has raised a lot of eyebrows and has put a wedge in parties based on beliefs just like politics tends to do, but there’s also a huge misunderstanding about the whole thing too that I wanted to clarify. I’ve noticed this initiative has created 3 different parties, 1 being the people who are gung ho about eliminating property taxes and are apart of the anti property tax group, 2 being the people who say they understand that property taxes are going toward maintaining the communities we all know and love who are against this initiative, and then there’s person number 3, who really isn’t paying attention and it is what it is.
When I first heard this initiative hit the headlines, without further research I thought, what a horrible idea, as if there aren’t communities and roads deteriorating as we speak, this group wants all the finding to go away and the desirability of Michigan and our amazing communities will be walked away from, but if you look closer into the initiative, the headlines and the interviews, Karla understands that the services for police, fire and road commissions are essential, and agrees we should all be paying for those services to keep our communities safe and well maintained. Her argument stems from tax dollars going towards things like the libraries, museums, zoo’s, etc. where she states she doesn’t go, so why does she pay 1700-1800 dollars a year for something she doesn’t use, hence why she says there should be a choice. Then 7 Action news jumped to the other side of the spectrum and interviewed library goers who said they would never vote to get rid of property taxes if it would affect the libraries, and put emphasis on how communities need them even if you don’t personally use them, it’s crucial for the children and schools and we should want to support the schools and furthering education. Librarians push back and say a library is much more than just books, they provide high-speed internet, employment assistance, workspace, digital literacy support and more. And this is something that voters regularly approve to keep the libraries open for.
An Advocate For Michigan Property Tax Payers?
Then they switched gears once again to a taxpayer who applauds Karla for being an advocate for the Michigan people to pay less in taxes, since people are being priced out of their homes and it’s just making homeownership that much more unaffordable. The thought process against this initiative is how there would be devastating consequences on every public service we rely on, and how it would be detrimental to Michigan’s economy as prospective residents and businesses might refrain from moving here when certain services aren’t funded. To make up for these lost funds, Karla is proposing that state revenue sharing should be increased with local and county governments, but have that revenue go toward public safety and roads.
This initiative requires 446,000 signatures to make the 2024 ballot.
The Detroit news stated that the proposal would change the sales tax distribution from the current rate of 15% to municipalities and instead send 20% to municipalities and 10% to counties. Mary Ellen Gurewitz (might of butchered her last name) is a democrat who chairs the board of state canvassers and voted against the proposal immediately, because it didn’t outline how damaging the proposal would be for the state and local governments, because the plan would essentially defund the schools in Mary’s perspective.
It’s also said that this proposal would prohibit any state, county or local government to require a ⅔ vote to raise taxes in the future, which for those of you that don’t know, The language means that two-thirds of all those present is needed to pass an amendment, the hardship on this voting style historically makes difficulty to get a majority vote, and the possibility of critical expenditures would either take a very long time to get approved or not happen at all.
However, the proposal also states it would take more funding from the state, and feed it into cities, townships and counties for essential government and infrastructure services. Which may seem all fine and dandy on the service, but it would eliminate the state education tax which has generated upwards of 2.5 billion dollars for the school aid fund last year and that would prohibit any school improvements, as well as libraries, museums and zoos like I mentioned earlier.
A Lack of A plan
Mark Brewer, who is an attorney for an opposition group came forward and told Bridge Michigan how all of what i just said wasn’t included in the proposal at all and he argues it should’ve been, from what I have been seeing on the opposition, is people are pushing back at Karla about how she wants to bake the cake and eat it too, make all these money moves, give back to the people, but have it not affect anything else, and we all know when it comes to politics and proposals that there’s pros and cons to it all. According to the nonpartisan senate fiscal agency, Michigan will spend upwards of 19.4 billion dollars in school aid for grades k-12 this year according to Michigan’s budget. The spending has increased, but the overall revenue has been growing slower due to the rate of inflation.
Michigan School Funding
I know there’s the argument of holy cow that’s a massive budget, what does all these go toward, and I did more digging to see the school aid fund allocation and it went towards things like: special education, grants, faculty retirement, career prep, early childhood funding, obligations, and the majority just going towards per student costs. Of course diving into each one of these categories to see what all the money is actually going towards outside of these general funding buckets is another conversation altogether. Michigan community college association president Brandy Johnson says confidently, that community colleges will close in Michigan under this new proposal, without a doubt, since they rely on three main buckets of funding according to an interview with the Detroit free press: state appropriations, tuition and fees and local property taxes.
Johnson says, when you kick one leg of a three legged stool, the whole thing crumbles down.
"LET THEM FAIL!"
At the end of the day, we are all tired of paying so much in a world where the cost of living and wages are not in sync and it’s resulted in people not being able to purchase housing, living multigenerational, and living check to check. Karla spoke at the Mackinac republican leadership conference and dabbled on the fact that the proposal would derail schools, libraries, museum’s and zoo’s and her response was, “let them fail”. Her perspective is, the education is so poor and the libraries have sick books in them so why put forth this money if it’s already bad.
Karla and her anti property tax group have a firm belief that if property taxes were eliminated it would stimulate the economy and boost other avenues that the state could use to fund schools, and my interpretation of that is, it keeps more money in all of our pockets, so we will spend more frequently on entertainment, clothing, activities, food, etc. so the cost of all those things would most likely ramp up higher as these companies and corporations are going to need to dish out more for taxes which would then be turned around and put in the school fund that was derailed by the elimination of property taxes. So it seems like a double edged sword, where you save money in one area just to have to spend it in another, but I understand her thinking, because you can choose to not go out for entertainment, clothing, and activities, but you can’t choose to not pay property taxes.
Eliminating Michigan Property Taxes
This initiative is very interesting to me, because obviously property taxes are something that are paid for in every state, I see the burden with all the clients I help buy and sell real estate in Michigan, and how it hurts affordability, but in my opinion, there needs to be more information provided in the proposal outlining the pros and cons in detail before people should just start signing this petition. As someone who has lived in Michigan my whole life, and has seen it have lows, hit highs, while areas have become more vibrant and revitalized across the state, it’s hard to just say yes to getting rid of something that has helped get us to this point today.
Do I think property taxes are expensive, yes I sure do, but we need to make sure these funds are being taken from and re-allocated to the correct funding buckets, because the last thing I would want is for our community-centric focus to deteriorate and make this state undesirable in every aspect.
I’m not too versed on the auditing situation of where these funds are allocated, but an audit from a third party company that isn’t shaking hands behind closed doors, would be a step in the right direction. This state has worked hard to get to where they are today. Look at Detroit for example, it is mind blowing how far that community has accomplished and grown in just the last decade.
With all this being said, would you vote to eliminate property taxes in Michigan? Why or why not? Drop your thoughts in the comments below.
Cheers,
Andrew
Andrew McManamon is a Michigan REALTOR® with Signature Sotheby’s International Realty and provides real estate services to Buyers, Sellers and Investors throughout SE Michigan including Livingston County, Oakland County, Washtenaw County, Genesee County & beyond. Andrew has become one of the pillars of Michigan real estate. Prior to his real estate career Andrew was responsible for managing a senior living facility in Brighton, Michigan as a dining supervisor and an activities assistant. Andrew’s passion to help people is unlike any other, and he continues to strive to be best resource he can be. Andrew graduated from Cleary University in Howell, Michigan with a double major and currently resides in Brighton, Michigan.
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