Detroit Mayor Mike Duggan speaks at a rally with former President Barack Obama in Detroit on Oct. 29, 2022. (Andrew Roth/Michigan Advance)
The Michigan Legislature broke Thursday for the rest of the calendar year without passing Detroit Mayor Mike Duggan’s Land Value Tax plan (LVT).
The LVT is “a way for Detroit voters to decide whether to cut homeowners’ taxes by an average of 17% and pay for it by increasing taxes on abandoned buildings, parking lots, scrap yards, and other similar properties,” according to the city of Detroit website.
“We were in constant touch with the speaker’s office,” John Roach, Duggan’s spokesman, told the Advance on Friday “There was no time urgency to the LVT bill, since spring passage gives us plenty of time to put it on the November ballot. In light of the very few legislative days, the speaker proposed to take the LVT up first thing in January. We were fully agreeable to that timetable.”
The House failed in attempts last month to pass the legislation. Amber McCann, spokeswoman for House Speaker Joe Tate (D-Detroit), told the Advance on Thursday no more votes would be held this year on the plan, House Bills 4966–4970.
Under the proposed plan, 97% of Detroit homeowners would get a permanent property tax cut starting in 2025, if the state and local officials approve the legislation. The plan would then go to Detroit voters for approval.
Taxes on vacant land, however, would more than double from 85 mills to 189 mills to punish property owners who have allowed it to fall into disrepair, creating eyesores in Detroit neighborhoods.
“With this proposal Detroit will for the first time in decades have a property tax rate that’s comparable to Southfield, Warren, Grosse Pointe, Ferndale, Oak Park, and our neighbors. That is what we are trying to achieve,” said Detroit Mayor Mike Duggan.
State Rep. Stephanie Young (D-Detroit), the lead sponsor of the main bill, House Bill 4966, said the legislation will help homeowners realize savings. Her colleagues, Reps. Karen Whitsett (D-Detroit), Alabas Farhat (D-Dearborn) and Tyrone Carter (D-Detroit) are also sponsors of the package.
“We’re just trying to do something that hasn’t been done,” Young said during an August press conference in Detroit where the legislation was announced.
However, the Detroit-based Coalition for Property Tax Justice does not support the LVT.
It “does nothing about the city of Detroit’s systemic and illegally inflated property tax assessments,” the coalition has stated and its implementation would “dramatically increase the workload of the already overburdened Assessment Division, making illegal property tax assessments more likely.”
“Mayor Duggan must prioritize stopping the illegally inflated property taxes that still affect the city’s lowest valued homes,” said Bernadette Atuahene, a University of Wisconsin property law professor and member of the Coalition for Property Tax Justice. “The city of Detroit has overtaxed homeowners by $600 million and it’s time to get to the root of the problem. That’s what Detroit homeowners want and need.”
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