Town Hall Meeting

 Discussing:
Your Property Taxes, the MBT, and the "Fair Tax"

 Join Us!
This Monday, March 24th
6:30pm to 8pm 

Project Room 290
Grandville High School
4700 Canal SW
Grandville, MI 49418 

Dear Friends:

As your State Representative, I will periodically send out e-newsletters to keep you informed of current events in Lansing.  I hope you enjoy reading them.  However, should you wish to be removed from our email list, please reply to this message and put the word, "unsubscribe" in the Subject line of the email. 

Proposal A

It is that time again for Michigan homeowners to receive their 2008 Assessment Change Notice-the annual statement of your home's assessed value and taxable value. These two numbers-taxable value and assessed value-can be confusing. The taxable value is the amount that is used to calculate your property taxes. The assessed value (otherwise known as the SEV) represents one-half of your home's market value. Depending on how long you have owned your home, there can be a big difference between these two numbers. For some homeowners, the assessed value of their home is lower than last year's. This is due to the weak state of Michigan's economy and a soft real estate market. Yet for many homeowners, the taxable value of their homes has increased over last year. If the market value of your home is less, shouldn't your property taxes be less? The answer is: not necessarily. The reason is found in the state law known as Proposal A, which was approved by Michigan voters in 1994.

Proposal A limits the annual increase in your taxable value to 5 percent or the rate of inflation, whichever is less, adjusted for losses and any additions. The assessed value of your home is not affected by Proposal A. Therefore, even if the assessed value of your home is less than last year, your property taxes can still go up because the taxable value-the number used to calculate your property taxes-increased due to Proposal A. This concept can be difficult to explain, so let me use an example:

John Doe bought a home 10 years ago for $50,000. The market value of his house has since increased to $100,000, which means the assessed value has increased from $25,000 10 years ago to $50,000 today. Yet the taxable value of John's home this year is only $35,000. This is because the change in the taxable value of his home increases at a slower rate than the change in assessed value. It was limited each year by Proposal A, while the assessed value was not limited and has increased much more.

Unfortunately, the market value of John's home this year dropped to $90,000 due to the soft real estate market. Therefore, assessed value declined to $45,000. So, why didn't John's property tax bill go down?

Answer: because the taxable value of his home increased due to the requirements of Proposal A. As long as the taxable value remains below the assessed value, the taxable value on John's home can and will increase each year by the amount required under Proposal A. This explains how your property taxes can increase, even when the market value of your home is declining.

If you would like to hear more about this issue, please attend the Monday Town Hall Meeting (see invite above).

New traffic signal expected to help traffic flow  

 In response to a national study completed by federal safety officials, drivers have a tendency to make fewer mistakes when a flashing yellow left-turn signal is present, than with the traditional red flashing left-turn arrow signal. Therefore, the Michigan Department of Transportation (MDOT) has decided to replace all flashing red left-turn signals with the flashing yellow left-turn signals on Michigan highways. There are already 8 signals installed on Michigan state highways, with 17 more on the way this year, and more than 300 locations expected to change in the next 5 years. Currently, there are signals in Lansing, Jackson, Howell, Grand Rapids and Ludington; with more expected this year in Battle Creek, Grand Rapids, Lansing, Benton Harbor, Flint and Metro Detroit. (Signals along local routes will be updated by county road commissions and cities).

DTE Energy New Website

DTE Energy has a new website in place to assist people in determining how energy efficient their home and small businesses are. The MyEnergy Analyzer is an online tool available for residential and small to mid-size commercial customers. It is used to aid customers in understanding how they use energy and what drives their costs. This is a powerful tool that will allow customers to compare bills, provide billing history, print a report of their energy usage/savings, and provide tips on how to reduce their energy bills.

http://my.dteenergy.com/home/myEnergyAnalyzer.html

Michigan Business Tax calculator available online

Business owners interested in estimating their tax liability under the new Michigan Business Tax (MBT) will now find an updated calculator on the Department of Treasury Web site. The calculator (which provides unofficial estimates only) has been updated to include the 22 percent surcharge lawmakers added to the MBT in exchange for repealing the service tax.

The Web site also offers an updated Q&A section and downloadable seminars. To check out the updated MBT calculator, visit www.michigan.gov/mbt.