LANSING -- Just 24 hours after a proposed constitutional amendment that would have blown a $253 million hole in the budget failed to get the necessary two-thirds vote for passage, Senate Republicans moved to reconsider it, and it passed by a vote of 29-8 on Wednesday.
Senate Joint Resolution H would amend the state Constitution to ban a property's taxable value from increasing any year its assessed value decreases. According to the nonpartisan Senate Fiscal Agency, it would cost state and local governments $253 million in revenues and local schools $75 million, and that would directly hurt local governments that have lost $3 billon in revenue sharing since 2001.
“That’s $3 billion under our watch since 2001,” said Sen. Gilda Jacobs, D-Huntington Woods. “So what we are going to do again today is put another nail in the coffin for local services that are barely able to meet the needs of our constituents.”
Under Proposal A passed in 1994 when property values were rising so fast that many senior citizens could no longer afford to stay in their homes because of the increasing property taxes, property tax increases were capped at the rate of inflation or 5 percent, which ever is less. Proposal A represented a very large cut in the property taxes of homeowners, and continues to protect homeowners from exorbitant increases. Unfortunately, while property values might decline, inflation has continued, so taxes have continued to rise at that rate, currently about 3 percent.
Jacobs said Pontiac only has 66 police officers right now, and this will hurt other municipalities as well.
“We must at least try to make whole the services that we need to basically keep our doors open in Michigan,” she said. “In this bad economy, the demand for government services is even greater.”
Sen. Gretchen Whitmer, D-East Lansing, introduced an amendment that would have reimbursed local taxing authorities for the money lost because of SJR H, but it failed 15-22.
“This amendment will ensure that they are protected from those devastating cuts; protecting those who protect us—the cops; and protecting those who need us the most—kids,” she said.
Senate Democrats also opposed the resolution because it’s simply not fair because new homeowners will pay more than someone who has been in their home longer.
“Not everybody in Michigan has been in their home like I have for 30 years,” Jacobs said. “Now again, today, we are going to pass something that will totally benefit me again, but it is not going to benefit the other 50 percent of people in Michigan who really do need their property tax relief.”
Democrats changed their votes after Governor Jennifer Granholm said the proposal deserved to be part of the discussion on the overall fairness of state taxes. The resolution must be approved by the House before it goes on the ballot to be approved by voters.
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