Findings from the most recent Michigan Public Policy Survey (MPPS), published by the Ford School’s Center for Local, State, and Urban Policy (CLOSUP), reveal broad concern by local leaders and administrators over property tax appeals.
The survey shows the extent to which tax appeals, either to a local board of review, or to the Michigan Tax Tribunal, are used by businesses and property owners seeking to decrease their tax liabilities: 89 percent of cities and 72 percent of townships received tax appeals in the last two years. These rates vary by property type and use—appeals related to residential properties are the most common, followed by agricultural, commercial, and industrial properties.
Nearly a quarter of surveyed local officials report that “tax appeals are somewhat of a problem or a significant problem for their jurisdiction’s fiscal health.” Larger jurisdictions that have faced a recent tax appeal are even more concerned: 55 percent of these officials reported the appeals are “at least somewhat of a problem for their jurisdictions’ fiscal health.” Moreover, 65 percent of officials in cities and townships with “big box” stores (e.g. Lowe’s, Costco, etc.) that have recently appealed report that tax appeals are "somewhat of" or "a significant" problem.
The survey follows recent Michigan Tax Tribunal rulings that have allowed many large commercial stores to decrease their property taxes. Successful appeals have argued that their property assessments should use the value of “vacant comparable buildings,” which is less than the “highest and best use.” Michigan’s constitution places some of the nation’s most severe limits on property tax revenue growth, which might otherwise support local government budgets dealing with revenue losses from tax appeals.
The Michigan Public Policy Survey (MPPS) is a biannual census survey of all 1,856 general purpose local governments in Michigan conducted by the Center for Local, State, and Urban Policy (CLOSUP) at the University of Michigan in partnership with the Michigan Municipal League, Michigan Townships Association, and Michigan Association of Counties.
Respondents for the spring 2016 wave of the MPPS included the top elected and appointed officials from 1,378 jurisdictions across the state (a 74 percent response rate by unit). The margin of error for the survey is +/- 1.34 percent.