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July 13, 2022
Memorandum 1169

Memo – Local Governments Respond to Property Tax Base Limitations by Raising Tax Rates

Kindly consider a $20 donation for unlimited access to this important report.
We have always made all of our publications, whether in paper or electronic format, available to all without charge. We will continue to provide unrestricted access to every publication in our library. 

To ensure continued free access, we are asking YOU to help with a $20 charitable donation (or what you can afford) to the Citizens Research Council of Michigan TODAY to ensure timely and comprehensive updates on Michigan taxes. Donations of any amount are appreciated. Please consider making your donation recurring.

In a nutshell

  • Local government officials have responded to Michigan’s tax limitations, which constrain growth in the property tax base, by seeking, and often receiving, increases in tax rates. From 2004 to 2020, the average county rate increased 17 percent, the average city rate increased 14 percent, and the average township rate increased 21 percent. Most local governments had higher tax rates in 2020 than they did in 2004.
  • Tax rates increased for reasons other than just constraints on the tax base (e.g., some local governments had population increases or needed to expand service provision). Whatever the reason, local governments cannot perpetually increase tax rates; statutory caps and taxpayer tolerance create upper bounds.
  • Policymakers must address the root problem with Michigan’s local finance system – Michigan depends too heavily on the local property tax to fund local government services. A municipal finance system with alternative tax options could ease the burden on the property tax.
July 13, 2022
Memorandum 1169

Memo – Local Governments Respond to Property Tax Base Limitations by Raising Tax Rates

Kindly consider a $20 donation for unlimited access to this important report.
We have always made all of our publications, whether in paper or electronic format, available to all without charge. We will continue to provide unrestricted access to every publication in our library. 

To ensure continued free access, we are asking YOU to help with a $20 charitable donation (or what you can afford) to the Citizens Research Council of Michigan TODAY to ensure timely and comprehensive updates on Michigan taxes. Donations of any amount are appreciated. Please consider making your donation recurring.

In a nutshell

  • Local government officials have responded to Michigan’s tax limitations, which constrain growth in the property tax base, by seeking, and often receiving, increases in tax rates. From 2004 to 2020, the average county rate increased 17 percent, the average city rate increased 14 percent, and the average township rate increased 21 percent. Most local governments had higher tax rates in 2020 than they did in 2004.
  • Tax rates increased for reasons other than just constraints on the tax base (e.g., some local governments had population increases or needed to expand service provision). Whatever the reason, local governments cannot perpetually increase tax rates; statutory caps and taxpayer tolerance create upper bounds.
  • Policymakers must address the root problem with Michigan’s local finance system – Michigan depends too heavily on the local property tax to fund local government services. A municipal finance system with alternative tax options could ease the burden on the property tax.

Stay informed of new research published and other Citizens Research Council news.
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