Many communities were left shaking their heads in confusion following the receipt of their most recent Personal Property Tax loss reimbursement check in November of 2017.
Despite the news that there was more than $150 million in excess of what was needed to reimburse local units at 100% of their loss, 167 cities and villages received less in 2017 than they had received in 2016, with a number of those communities receiving zero reimbursement in 2017.
The complex formula of recalculation of prior years, that began with the 2017 payments, is the main culprit behind these swings in reimbursement amounts. The new law requires Treasury staff from now on to annually compare prior year property value submissions with data submitted by county treasurers to the state’s Michigan Department of Education school aid fund database…a data set designed to help the state evaluate foundation allowance calculations from year to year…and then recalculate each of the prior years and the reimbursements that were issued. In some instances, if Treasury’s comparison and recalculation revealed an over-payment in the prior year, reimbursements in the current year were reduced to make up for the prior over-payment.
Based upon the broad number of unique factors that contributed to the calculation for each individual community’s reimbursement amount, Treasury has had difficulty providing a uniform calculation tool to assist local units with understanding their reimbursement amounts.
Following discussions with MML and other local government groups, Treasury agreed to place their 2017 PPT reimbursement calculation spreadsheet on the Department’s website (www.michigan.gov/pptreimbursement) under the following heading:
This is the complex calculation file that tracks all of the raw data utilized to arrive at the final reimbursement amount for each community. The file will look very different from the calculation tool that was provided for 2016, however, due to the additional complexities in the 2017 calculation it was too difficult to present the 2017 calculation in that same format.
Treasury plans to respond directly to municipalities that have requested the calculation detail over the coming days. Based upon how the statute requires reimbursements to be distributed, there is no opportunity for communities to review Treasury’s calculations for potential errors or questions prior to checks being disbursed. Please review this data and let the League know if you believe an error occurred within the November 2017 calculation.
Chris Hackbarth is the League’s director of state & federal affairs. He can be reached at 517-908-0304 and [email protected].