Local leaders say property tax appeals common, dislike 'dark stores' policy

A new report from the University of Michigan's Center for Local, State, and Urban Policy (CLOSUP) presents the opinions of local government leaders on the impact of property tax assessment appeals in their jurisdictions. It also provides local leaders’ opinions on decisions made by the Michigan Tax Tribunal, including those about “dark stores” appeals where “big box” stores have been able to significantly decrease property taxes by arguing assessments should be based on the value of vacant comparable buildings.

The Spring 2016 Michigan Public Policy Survey (MPPS) asked local government leaders from 1,378 Michigan jurisdictions (counties, cities, townships, and villages) about property tax appeals in their jurisdictions. Local government leaders report that property tax appeals are widespread, and in many cases are a source of fiscal stress.

The full report is available at http://closup.umich.edu.

The report’s key findings are:

—Statewide, 89% of Michigan cities and 72% of townships — the units typically responsible for property tax assessment — report experiencing tax appeals by property owners in the last two years. Nearly a quarter (23%) of local officials statewide say these property tax appeals are somewhat of a problem or a significant problem for their jurisdictions’ fiscal health.

—Among jurisdictions that report having “big box” commercial stores, 57% of cities and 32% of townships say there has been at least one tax appeal for these types of properties within the previous two years. Almost two-thirds (65%) of officials in jurisdictions that have faced an appeal by a commercial big box retailer say tax appeals are somewhat of a problem or a significant problem for their jurisdictions’ fiscal health.

—Among jurisdictions that have experienced at least one tax appeal to its local Board of Review, 72% of city officials and 59% of township officials report at least one such appeal was then subsequently appealed further to the state-level Michigan Tax Tribunal.

—While local officials' views on the full range of Michigan Tax Tribunal rulings are generally mixed, there is strong opposition to the Tribunal's dark stores assessing method for big box retailers. In other words, local officials believe big box retailers’ taxes are being cut inappropriately.

All MPPS reports are distributed to state and local government officials and other policymakers.

In addition, the CLOSUP website provides detailed tables of the data collected in all of the MPPS surveys, with the Spring 2016 data now available. The data are broken down by jurisdiction type, population size, and region of the state.  These easy-to-read tables allow quick analysis for a wide range of issues and can be found at: http://closup.umich.edu/michigan-public-policy-survey/mpps-data-tables.php

We are happy to answer any questions you may have and to help you interpret the data. We would also be happy to produce customized data tables for different groupings of local governments, such as responses for all jurisdictions within a particular county.  Our goal is to help inform the policymaking process in Michigan at all levels.

***

The MPPS is conducted by CLOSUP in partnership with the Michigan Association of Counties, Michigan Municipal League, and Michigan Townships Association. The survey program is unique in the country as the only ongoing survey targeted at every unit of general purpose local government across an entire state.

For more information, contact MPPS staff by email at closup-mpps@umich.edu or by phone at 734-647-4091. More information is also available on the CLOSUP website at: http://closup.umich.edu. Follow CLOSUP on Twitter @closup.