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- Laws Affecting Assessments & Tax Revenues
Laws Affecting Assessments & Tax Revenues
1981 P.A. 213, "Truth in Assessing"
This act requires a millage rollback if the State Equalized Valuation of property in a community exceeds that community's assessed valuation and if this excess would result in levying a tax that would exceed that community's maximum authorized millage rate times that community's assessed valuation. Wayne County's assessed valuation for Canton Township equals the State Equalized Valuation, so no adjustment to the millage is required in 2004.
1982 P.A. 5, "Truth in Taxation"
This act required a public hearing to levy a millage rate that would result in increased tax revenue on base tax properties due to increased valuation. This act permitted additional tax revenues from new or improved properties, but required the public hearing if the community wished to levy taxes over the base revenue received the previous year. The township was required to hold a public hearing to levy the increased millage rate, because the levy would result in increased tax revenue as defined by 1982 P.A. 5.
This public hearing requirement was changed in 1995 to include the Truth in Taxation public hearing requirement in the proposed budget public hearing. Language in the public hearing notice for the proposed budgets must include the statement "The property tax millage rate proposed to be levied to support the proposed budget will be a subject of this hearing".
And the budget appropriations resolution must state the total number of ad valorem mills to be levied and the purposes for which the millage is to be levied.
1982 P.A. 539, The "Headlee Amendment" to the Michigan Constitution
This is similar to Truth in Taxation except this amendment permits an increase in the base tax revenue equal to the year's inflation rate as determined by the State.
The general effect of Proposal A legislation in 1994 was to freeze the Charter millage limit at 4.0985 (5.00 mills authorized). Proposal A generally offsets the Headlee limit, because the taxable value of real property is capped at the rate of inflation, the same basis on which the Headlee millage limit is computed. However, due to difference in the computation methodology, there was a .76% reduction in the Charter millage limit for the 1999 tax levy, a .95% reduction for the 2000 tax levy, a 1.04% reduction in 2001, a 1.13% reduction for 2002, a .82% reduction in 2003. The maximum millage rate authorized for 2004 is reduced to 3.9094.
The effect of these laws is to limit property tax increases in Michigan. Canton Township proposes to levy 2.366 mills for 2004 which is .32911 mills above the Truth in Taxation limit, but well below the "Headlee" limit of 3.9094 mills.