Dr. Wolfram Talks About Reforming Michigan’s Property Tax
Dr. Gary Wolfram, who holds the William E. Simon Chair of Professor in Economics and Public Policy and is their Director of the Economics Program, as well as a Professor of Political Economy, was on the Live with Renk Show to discuss his thoughts about Michigan’s property tax law Proposal A.
Michigan’s Proposal A was passed in 1994 and capped the annual growth in taxable property values at the rate of inflation or 5%, whichever is less. The legislators did this in order to protect Michigan property owners from what they called runaway tax increases during a boom economy.
Now according to a report in the Detroit News there is a push to reform Prop A.
The concern is coming from local governments who rely on property taxes to pay for what they call essential services in their cities and maintain their infrastructure. Their concern comes from the fact that Michigan’s taxable property values dropped sharply during what was called the Great Recession. According to Michigan Treasury data, these values remain below 2008 levels in more than 700 cities, townships and villages in Michigan.
Dr. Wolfram was quoted in the article stating:
Nobody — nobody — was thinking about what would happen to local units of government if the property tax values were to collapse…And that was never corrected.
Dr. Wolfram went on to say that Michigan should look at reforming our current property tax law by allowing property tax values to fully rebound in the aftermath of an economic decline while retaining the cap in growth in the years after the recovery. He was quoted in the article stating:
That’s what I would do, but it’s unfortunate that it’s in the Constitution, because it makes it a little bit harder
Hear directly from Dr. Wolfram when I interviewed him about his thoughts on my show.