Detroit Mayor Duggan continues to tout his plan to change the method by which the city has valued property over the past decades. Earlier this year, the Duggan administration introduced the Land Value Tax Plan, which aims to cut taxes for homeowners by an average of 17%.
Mayor Duggan met with residents in District 1 to discuss the plan in great detail during a charter-mandated community meeting Thursday at Macedonia Baptist Church on Southfield Road.
“This is a city where we ought to have where the homeowners pay less and the people who have neglected their property ought to pay more,” said Mayor Duggan.
The plan would aim to pay for the homeowner tax cut by raising taxes on abandoned buildings, parking lots, scrapyards, and other similar properties.
If the Michigan Legislature authorizes, the Detroit City Council would decide by November on whether to place the issue on the ballot. Detroit voters would decide whether or not to adopt the Land Value Tax in February 2024 during the Presidential primary election. If passed, homeowners would see the full tax cut in 2025.
Currently, Detroit’s operating millage runs at 20 mills, resulting in many homeowners being taxed at a total of 67 mills and, as a result, leaving many Detroiters playing more in taxes than neighboring suburbs.
Under the proposed new plan, Detroit’s operating millage would be cut by 14 mills, from 20 mills to 6 mills for all taxable property. The change would result in Detroit homeowners seeing a sizable reduction in their land value tax to 53 mills compared to the current 67 mills.
Michigan State Representative Stephanie Young is a supporter of the Land Value Tax Plan but is seeking exemptions for some residents and property owners. The mayor’s office overtime retooled the plan to reflect the idea that Detroiters who are investing and building up their community shouldn’t be negatively impacted.
It’s for that reason that there will now be three areas of exemption under the plan, and they will be for side lot owners, urban farmers who have created community gardens, and property owners within a Neighborhood Enterprise Zone (NEZ).
The NEZ Homestead abatement reduces both the City of Detroit and the Wayne County Operating Millage by 50 percent. This usually results in a 15 to 20 percent savings for most homeowners.
The mayor voiced his displeasure at the unfairness of how only certain homeowners in well-to-do neighborhoods reap the benefits of tax cuts under the NEZ when his land value tax plan seeks to spread the tax reduction across the entire city. Residents already receiving reduced property taxes under the NEZ will be allowed to stay on the plan, but once the 15-year NEZ program runs out, residents will fall under Mayor Duggan’s new land value tax plan, if approved, and likely to still yield reduced property taxes.
Seeing if it could yield public support, during the community meeting, the administration introduced and demonstrated a new land value tax estimator to allow residents to calculate how their taxes would be impacted.
The process would bring residents to a soon-to-be-released City of Detroit website where homeowners could insert their address to see how much savings they could receive in property taxes if the mayor’s plan is approved.
One by one, and across the entire church sanctuary filled with nearly 100 attendees, the mayor started taking shouted addresses from community members as they wanted to see how much tax savings they could receive. For most homeowners, the plan and idea of tax relief were well received.
“It sounds really good,” said Johnnie Wilford, a 75-year-old senior citizen who has lived in Detroit all her life.
“I’m fed up with people who don’t live in the city, owning these properties and not taking care of them. This is a plan I can truly support and help people get up and out here to vote.”
Wilford also took part in the land value tax estimator, where she learned her tax reduction would save her $177.
The mayor’s office said if the rollout of the land value tax estimator was well received by residents at Thursday night’s community meeting, it would debut the system on the city’s website next week.
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