Tax Limitation Amendments Have Unintended Consequences

Small municipalities need tax revenues generated by additions, people move rather than building on and staying
April 25, 2004, 11am PDT | Abhijeet Chavan | @legalaidtech
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"A local state representative hopes to keep young families in their homes by proposing a five-year tax exemption on home additions, largely to retain or increase student enrollment in older school districts. The Michigan Municipal League and some city leaders, however, already are balking at the idea, which could lead to a contentious debate in the state Senate this spring. The House passed the bill in March. Leaders of aging Metro Detroit suburbs argue ability to maintain city services and quality schools is hamstrung by Proposal A and the Headlee Amendment, laws that limit the amount of taxes Michigan governments can collect. Some, such as Hazel Park City Manager Ed Klobucher, said offering a tax waiver on home additions merely highlights the larger problems that exist under Headlee and Proposal A. 'Until we can get enough revenue to run city government, bills like this are really just a kind gesture,' he said. 'I’m not opposed to doing something to encourage folks to stay here, but it needs to be done as part of a larger picture of overhauling the whole system of municipal finances in Michigan.'”

Thanks to Richard Layman

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Published on Tuesday, April 20, 2004 in The Detroit News
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