(A special thank you to Joe Law for doing some research on this) ; )

 

The Ludington City Council is posed to enact six ordinances setting increased millage rates and creating tax levies for those increases on Monday July 12, 2010 at 6:30 P.M..  According to the city clerk, City Manager John Shay explained that there is a $6.5 million tax decrease in the taxable value from 2009 to 2010 due to the declining property values.  The rate increases are necessary so that the City will lose less tax money.

 

            Citizens of Ludington lost a lot of money due to their property values going down.  The ethical thing for the government of Ludington is to accept that the drop of millage rates the state mandates in such a case (particularly when property values are assessed higher than the rate of inflation) should be observed.   There are reasons why these tax rates are being reset by law, and to counteract these six proposed ordinances here are six laws the state has passed to keep local governments from reaching too deep in the pocketbooks of their taxpayers without their consent:

 

THE GENERAL PROPERTY TAX ACT  MCL211.34d (6) The number of mills permitted to be levied in a tax year is limited as provided in this section pursuant to section 31 of article IX of the state constitution of 1963. A unit of local government shall not levy a tax rate greater than the rate determined by reducing its maximum rate or rates authorized by law or charter by a millage reduction fraction as provided in this section without voter approval.

 

STATE CONSTITUTION OF MICHIGAN  Sec. 31. Units of Local Government are hereby prohibited from levying any tax not authorized by law or charter when this section is ratified or from increasing the rate of an existing tax above that rate authorized by law or charter when this section is ratified, without the approval of a majority of the qualified electors of that unit of Local Government voting thereon.

 

THE GENERAL PROPERTY TAX ACT   MCL 211.107a  No city shall have power to increase the rate of taxation now fixed by law, unless the authority to do so shall be given by a majority of the electors of said city voting at the election at which said proposition shall be submitted

 

THE GENERAL PROPERTY TAX ACT   MCL 211.24f  If a taxing unit submits a proposal on the question of authorizing the issuance of bonds, imposing a new millage, or increasing or renewing an existing millage, except an ad valorem special assessment millage for police or fire protection under 1951 PA 33, MCL 41.801 to 41.813, the ballot shall fully disclose each local unit of government to which the revenue from that millage will be disbursed.  (4) A taxing unit shall hold not more than 2 elections in a calendar year concerning the authorization of a millage rate greater than the product of the immediately preceding year's reduced maximum authorized rate or rates as defined in section 34d(16) multiplied by the current year's millage reduction fraction, regardless of the number of questions presented at the election.

 

STATE CONSTITUTION OF MICHIGAN    Sec. 25. Property taxes and other local taxes and state taxation and spending may not be increased above the limitations specified herein without direct voter approval

 

THE HOME RULE CITY ACT  MCL 117.5 Prohibited powers.  A city does not have power:  (a) To increase the rate of taxation now fixed by law, unless the authority to do so is given by a majority of the electors of the city voting at the election at which the proposition is submitted

 

Seems pretty clear that the city council has no legal authority to raise these millage rates that are facing reduction without voter approval, and had no authority to do so last year either.  But even if there was not any such laws, ethically, they should scrap their Truth in Taxation Circus and instead start putting this on the fall ballot.  But is there any doubt this would lose resoundingly to an impoverished, overtaxed electorate?  Perhaps overburdened taxpayer Bob Neal put it in focus at the last meeting of the council: 

 

The City is sending the wrong message to prospective buyers in this community that the City is already not competitive. He mentioned that the property taxes on his second home in Colorado are half of what they are on his condo in Ludington and the property in Colorado is 5 times more valuable than the condo in Ludington. A potential retiree is going to find it hard to buy in Ludington and pay 3, 4, and 5 times the property taxes that are paid in other states. On a $300,000 condo in One Ludington Place, the property taxes are $12,000 a year.”

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Disarm and Lady Edie pointed out the hard-to-follow aspects of tax law on LT. She got it basically right, Headlee has millage reduction equations that go into effect when the assessed values goes higher than the inflation rate. These can only be raised by popular vote, if we are to believe that Ludington is part of Michigan.

Here's a snippet I borrow from my other thread "Whose Money is it Anyway?":

The Headlee Amendment, passed by Michigan voters back in 1978, was added to the Michigan Constitution. Section 31 of Article IX requires a rollback in local authorized millage rates if the local tax base increases more than inflation. A millage rate (MR) is the amount of tax per thousand dollars of the taxable value of property.



If the assessed value of a local government’s total taxable property, excluding new construction and improvements, increases by more than the inflation rate, the maximum authorized property tax rate (MR) must be reduced so that the local’s total taxable property yields the same gross revenue, adjusted for inflation, as collected on it at its prior assessed value. Exhale. Let’s look at a ‘simple’ example, then some concrete, meaningful numbers that apply to Ludington.



If the Taxable Value (TV) of an area is $100 million with a MR of 10.0 (bringing in $1,000,000 in taxes), then if the TV increases to $110 million the next year, but there was no inflation, then the MR must be reduced to 9.09, so that once again $1,000,000 is brought in.



The TV of all property in Ludington was assessed at $273.1 million in 2009 up from $266.8 million from 2008. This is about a 2.3% increase during a period when inflation was under 1%. As the assessed values were greater than the rate of inflation, millage rates had to be rolled back.
The legal trick-shot artists reigning high over the Ludington City Council, driven by an agenda of greed and unfair taxation, should be of true and serious concern to all here. Trouble as usual is, they want to have hearings and debate when everyone is trying to enjoy the short few months of decent weather we get each year, while they weave their web of deceit and dishonesty. Or let's do it during blizzard seasons, they know few if any will show up to the meetings. Sad, we have a great populace of good people and beautiful scenery to enjoy. I do hope some concerned citizens go and shut this circus of deceit down, and put the culprits in their place, just like the wind farm hearing recently.
Disarm's spouting Kool-Aid over at LT about this. That goofball hasn't got a clue for anything, he just likes to be a contrarian it seems. He's targetted at you, and that Joe Law guy, LOL. I hope someone can get some legal help to fix this problem (the taxes, not the clown prince).
I glanced over and enjoyed your defense of reason, Edie. Thanks to all who voice their concerns about our greedy governments at any level, as I have been very busy.
Edie, you continue to impress me by offering some refutation to Joe Law's thesis on LT. I actually am somewhat happy that the City Council did have a legal means of raising your taxes, despite the six laws featured. I guess he should have researched Truth in Taxation a little more. Here's what she posted, from a state gov't website:

"With the passage in 1978 by Michigan voters of Proposal E, the Headlee Tax Limitation Amendment, the Michigan Constitution was amended to require that if the SEV of existing property in a local unit of government increased by more than the consumer price index, the millage rate must be reduced to yield the
same amount of revenue, adjusted for inflation, as could have been collected at the existing authorized rate.

With the passage of Proposal A, this millage reduction is made using taxable value. The Michigan Legislature placed in law a formula by which a local unit of government must reduce its maximum authorized millage when its state equalized value/taxable value increases by a percentage greater than the percentage of increase in the average annual consumer price index, not including that part of the increase that is caused by new construction and improvements.

However, because the rate of inflation since 1979 was often higher than the annual increases in the property value of many local units of government, millages had not been reduced nearly enough to satisfy some homeowners. To deal with this situation, and to ensure that local governing bodies have control over whether property taxes increase, 1982 PA 5 was enacted. This law, known as the “Truth in Taxation Act,” has limited the amount of property tax a local unit can collect to what was collected the previous year, plus the taxes yielded from new additions to the property tax roll. This procedure is carried out by reducing
the millage rate to the level which will yield that amount of property tax revenue.
The limit can only be increased by a local governing body after it advertises its intent to collect higher taxes, conducts a special public hearing on the specific subject, and then votes to approve the additional millage rate
."

Note that the Truth in Taxation Act was passed to help the taxpayer deal with situations where the inflation rate was rising dramatically, not for when there is a negative inflation rate, which we have now. I still don't get the ethical reason why any of the councilors would saddle the taxpayers of the area with more taxes. Instead only one saw it as bad.

It's also morally reprehensible how they can raise the water rates by 19-24 % when the inflation rate is below zero, and it will be interesting to see whether they cut the rate back some due to their language in their new law which keys the inflation rate to changes in water rate. Bet they don't.
According to Kaye Ferguson Holman, the taxpayers of Ludington get what they deserve, per her short and rude comments last November at a council meeting. And I will try to quote, "if everyone is so concerned, how come 7,000 people don't show up to these council meetings, instead of just a few?" I thought her remarks were totally out of order and irresponsible, but that's just me. This is the type of frankness and mindset you are dealing with in most of the council and mayor. Anyone think this is wise and fair governing? To me, it's an aloof arrogance that goes beyond anything based in sound reality and fairness, just another reflection of what we already have in Lansing and DC.
AQUAMAN
She's just talking from her experience that when something important comes before the Council almost noone shows up or she hears nothing from the citizens. If the meeting was overflowing with concerned citizens againts the tax increase then it probably would not have passed.
Trouble is with that RJE, as I stated in a previous post, is their coincidental timing to have this type issue heard by the citizens. It's either prime time summer, or prime time blizzard season, both timings make it very hard for people that care to attend. That's been the case in the long ago past, and as you can see, the same tactic works yet today. Shameful and totally against good governing if you ask me.
Those folks were voted into office by someone, so they must have some support for their agendas. I don't think all of the thousands of citizens in Ludington were busy during these meeetings. So either this is not a big issue for most of Ludingtons citizen or most folks just don't care. If people were really riled about the tax raise then there should have been more people expressing their views.
You do have some valid points RJE, but I think there was or would have been some more citizen outrage than the no-show on July 12 but for a few factors.

First, the raising of the rates was sold to the media as an actual cut of taxes for the taxpayers-- they will actually pay less taxes-- but this is only as a result of the loss of property values and a negative inflation rate. The LDN reported:
“For the average taxpayer, the average taxable value in Ludington is dropping about $800 from $50,600 to $49,800,” Shay said during his presentation. “Even if the city were to adjust the millage rate by 11/100 of a mill, the average taxpayer’s tax bill would still go down about $6 per year.” And: One potential effect of not raising the millage would be to potentially deprive the Ludington Police pension fund of the money it needs to operate.

So a quick read might prompt: "Hey, we're getting a tax cut, and police retirees will have to eat dog food if these raises do not pass."

Second, the LDN duly reported Shay's defense of the tax hikes, but did not report on any dissent to the increase. Bob Neal, like four citizens last year, offered excellent testimony as to why the City should not raise the tax rates the last June meeting, but this never showed up in the paper. Councillor Paul S Peterson, who writes several guest editorials for his old stomping grounds, could have given voice as to why he feels the citizens need to pay more for his fiscal addiction. Stand up and proudly proclaim what the City is going to do with our money, Paul.

Third, as Aquaman said, the people are out enjoying the summer or working hard to get by that they have little time for the folly of getting up in front of these stuffed shirts and explain why their declining wealth should be preyed upon. You know, their representatives, the councilors should know this already.

Fourth, the 2009 elections had an unopposed mayor and an unopposed recumbent councilor. The only contests happened only because of term limits, and the two councilors elected have shown themselves to be business-as-usual, lackluster replicas of those they replaced.

Yes, apathy is alive and well; however, many citizens believe the greatest apathy lies in the elected officials attitudes towards them, and what they have to say.
Don't forget us tax-paying non-homesteaders who do not have a vote, cannot attend these meetings and aren't even aware of the shenanigans.
RJE,
I've personally wrote Ms. Holman on 3 different occasions, and have yet to hear back from her, even to just acknowledge she had received and disagreed with me.

She did respond to an E-mail message by saying: "Give me a phone number and we'll talk....k" If you or I ever did this to our "boss", do you think this would go over well. Your phrase "she hears nothing from the citizens" may have a ring of truth to it.

Just in case you think I'm picking on Ms. Holman, the 11 other letters I've sent to Ludington City Councillors, most wrote last year before I knew better than to actually expect an answer, have remained in their in-boxes unacknowledged.

Besides, RJE, the Council and its leaders tacitly acknowledged (last year) that if these tax rate increases were to be decided by the people, they wouldn't stand a chance of passing in this climate-- so much for representative democracy.

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