Proposal A capped property tax increases at the rate of inflation. This meant that for years the perceived value “true cash value” of your home could out pace the taxable value of the home. This was a welcome thing until recently. As Perceived property values decrease, taxable values continue to increase at the rate of inflation thus closing the gap that was created over the past couple of years.
A good example of this can be see in Leelanau County, MI. Where the perceived value of homes dropped 2.38% this year, 6.39% in last year and 3.5% percent in the year before that. Meanwhile, taxable values increased by 1.02% this year. To put that into context, since 2008 the Leelanau County Equalized Values have decreased from $4.0 Billion to $3.5 Billion, while taxable values increased.
This is just an example of how a Proposal that saved the tax payers money while times were “good” has turned on them and cost them money while times are “bad”. Proposal A was needed in a number of communities. And I am not suggesting that it is reworked, what I am suggesting is that townships need to evaluate the “true cash” values for a large portion of their residents and see that they are way out of line with actual sales (if there are any).