Jan 27 With Detroit's revenue from property
taxes expected to come in at only $118.4 million in the current
fiscal year, Detroit Mayor Mike Duggan announced a plan on
Monday to lower property assessments and taxes this summer, with
an eye toward boosting home ownership and, ultimately, tax
Property taxes for city homeowners would drop by 5 percent
to 20 percent following a realignment of the assessment system,
according to a statement from Duggan's office.
Property assessments are a political issue in Detroit, where
a slew of homeowner complaints led the Michigan Tax Board to
investigate if the city had inflated property values.
A review of current assessments and actual home sales
between Oct. 1, 2011 and Sept. 30, 2013 found some areas of the
city were over assessed by at least 20 percent, according to the
"It left no doubt in my mind that these reductions are not
only warranted, but the right thing to do by our residents,"
Duggan said, adding that the city will conduct individual
assessments of homes over the next three to five years to
improve assessment accuracy.
Property taxes, Detroit's fourth biggest revenue source,
have slipped by almost 20 percent over the past five years and
contribute less to Detroit's budget than income taxes, state
revenue sharing, and casino taxes.
The city collected only 68.3 percent of property taxes owed
in 2011, down from a 76.6 percent collection rate in 2008,
according to a June report by Kevyn Orr, the city's
state-appointed emergency manager. Detroit was expected to take
in almost $135 million in property taxes in fiscal 2013, which
ended June 30. In the current fiscal year, collections were
projected to drop to $118.4 million.
The city, which filed for municipal bankruptcy in July, is
also littered with about 78,000 vacant structures, as well as
thousands of vacant lots.
The report noted Detroit has not updated residential
property values on a regular basis.
Chief Assessor Gary Evanko said in a statement the city
expects more homeowners pay their full taxes once assessments
"In the near term, we expect this move to keep fewer
taxpaying residents from leaving the city. In the long term, we
believe it will help to bring in more new homeowners and help to
start growing our residential tax base," he said.