The Tax Commission of the State of Michigan may investigate complaints made by property owners in Detroit who claim that the cash-strapped city is overtaxing through inflated property assessments. Doug Roberts, who chairs the three-member commission that oversees the Mitten State’s property tax laws, said that the panel will begin the process of hiring a private company to analyze Detroit’s property assessments as of April 8.
The Detroit News had exposed, in a series of articles, over-assessments as well as rampant tax delinquencies and maladministration of the Motor City’s assessment division. Reports in the media have indicated that many homeowners simply refuse to pay property taxes, having reasoned that Detroit no longer provides adequate services such as street lighting and police/fire protection.
Commissioner Roberts says that he is “concerned enough” about taxpayers’ complaints, and will thus take a “second look” at Detroit’s assessment division. The results of the expected study would be forwarded to Michigan’s treasurer, Andy Dillon, as well as Detroit’s emergency manager, Kevin Dillon.
The Detroit News has reported that Professor Mark Skidmore of Michigan State University found significant indictors of over-assessments in Detroit. The newspaper reported that Skidmore, and Professor Gary Sands of Wayne State University, looked into the sales of approximately 8,000 houses in 2009 and compared them to 2010 assessments. They found that houses selling for about $2,300 each were valued by the city at $42,000 or 18 times their selling price. Other houses that sold for $12,500 were assessed by Detroit at $62,000 by the city, according to their research. In the worst cases, houses sold for less than $100 were valued by Detroit at nearly $46,000.
In an email sent to the Detroit News, realtor Jon Werner wrote "Detroit is one of the few cities where you can buy a house for $10,000 and have $3,000 property taxes." He is the owner of Added Value Realty, a company that appeals assessments for property owners.
The Detroit News also found:
47 percent of Detroit property owners had not paid 2011 taxes as of the end of January, leaving nearly $246.5 million in taxes and fees uncollected.
Wayne County (in which Detroit is located) is so overwhelmed by tax foreclosures that the treasury decided against foreclosing on 40,000 properties in 2012. The jurisdiction plans to forgo foreclosures on another 36,000 properties in 2013.
Detroit’s Assessment division is managed by two retired city workers receiving pensions. Each of them will earn more than $100,000 this year by working just two days per week.
U.S. Navy personnel have discovered the remains of an American aviator who was shot down in combat over the Pacific Ocean in 1944. A team aboard USNS ...