Last week, the Detroit News ran an op-ed article from a lobbyist with the Michigan Chamber of Commerce, expressing their opposition to the dark stores fix being supported by the Municipal League and every other local government and education organization in the state. The piece, titled “Local officials mislead property taxpayers“, asserts that the push for a legislative solution (HB 5578) on the big box retail tax assessment appeal issue is being driven by “Local officials, who are unhappy that their efforts to over-assess taxpayers have been routinely rejected in court“. The opinion piece goes on to claim that the proposed legislation is unconstitutional, would force the MI Tax Tribunal to ignore accepted appraisal principles, and that local governments would use the bill to over-tax businesses based on their profitability. The author closes by stating “Local governments are trying to legitimize over-taxing by making scapegoats out of job providers who have successfully challenged their over-assessments.”
Unfortunately, the author uses more spin than fact in their arguments. A quick reading of the language in House Bill 5578 (Maturen) reveals a very different picture…
- the legislation only impacts those property tax appeals that are heard by the entire tribunal
- when determining a property’s highest and best use, the language requires the tribunal to consider all relevant information provided by both sides of a dispute, based upon each traditional method of property valuation (cost, sales comparison, and income)
- for the purpose of sales comparison only, the language precludes the use of data from properties subject to certain deed restrictions designed to impair the highest and best use of the property
The basic premise of the proposal is to ensure that the tribunal has the very best, most comprehensive set of facts at their disposal when setting critical tax policy precedent. Decisions made by the tribunal should ensure that the each of the basic principles of valuation are appropriately considered in every type of situation and that the tribunal, to the greatest extent possible, compares like properties and economic conditions to ensure the most accurate decisions.
And that’s it…nothing nefarious or difficult to understand…the bill was even drafted by the legislator most qualified to take on this issue. The sponsor, Rep David Maturen (R-Vicksburg) is the current vice-chair of the House Tax Policy committee and has spent his career in the real estate appraisal industry. Rep. Maturen has held a Level 3 Assessor Certification in Michigan for over 30 years, has worked for the Property Tax Division of the Michigan Department of Treasury and has served on the Michigan Board of Real Estate Appraisers and for the Appraisal Foundation in Washington. D.C. That experience and understanding is the main reason the sound, simple policy in this bill passed the Michigan House of Representatives in June by a 97-11 margin.
The groups opposed to HB 5578 are focusing all of their efforts on stopping further action on this bill. Please contact your State Senator and ask them to support action this fall on HB 5578 as a common sense, objective solution to this critical issue.
Form more information on the Dark Stores issue, please visit the League’s advocacy page here – http://www.mml.org/advocacy/dark-stores/.
Chris Hackbarth is the League’s director of state affairs. He can be reached at 517-908-0304and [email protected].