The Board gave preliminary approval at the October 17 meeting to raise property taxes using a loophole in the Headlee Amendment. The Headlee amendment to the State Constitution, passed in 1978, put a limit of 18 mills on property taxes unless there is a vote of the citizens.
The County’s lawyer has advised the Board since 2008 that the Headlee amendment allows the county to add any tax levy that was authorized by a law written prior to the enactment of the amendment. The Headlee amendment says in part;
The legal argument is controversial. An Attorney General’s opinion from 1979 advised that millages, such as the Act 88 millage, were to be included in the constitutional limit[2],[3]. However, the Supreme Court ruled in a case involving an emergency millage to pay a court judgement, that the millage could be added to the constitutional limit[4].
The Board is using Act 88 written in 1913 to skirt the constitutional limit on property taxes. Act 88 is entitled; “Advertisement of agricultural advantages” and it says in part;
Thus, the law allows a levy for advertisements and exhibitions. Most of the current and proposed uses of the tax revenue has nothing to do with either allowed uses. For example;[6]
Brownfield office staffing
(brownfields are land in need of environmental cleanup before they can be redeveloped)
Commercial kitchen incubator
(capital expenses for building and equipment)
Local business employment cooperative
(business plan development, legal consultation, startup assistance)
Business attraction incentive fund
(costs for relocating or expanding businesses)
By far, the most money is allocated to SPARK, which is a non-profit focused on economic development in Washtenaw County. Most of the activities of SPARK have nothing to do with advertisements or exhibitions. Some of their money and services also go to support foreign companies.
What the Board is doing with the Act 88 millage most likely violates the constitutional limit on property taxes either because such millages should be included in the limit or because it is not being used for the purposes stated in the law. The Headlee amendment allows for enforcement of the limit as follows.
The proposed Act 88 millage will be before the Board for final approval at their meeting on Wednesday November 6, 2013.
The County’s lawyer has advised the Board since 2008 that the Headlee amendment allows the county to add any tax levy that was authorized by a law written prior to the enactment of the amendment. The Headlee amendment says in part;
- “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.”[1]
The legal argument is controversial. An Attorney General’s opinion from 1979 advised that millages, such as the Act 88 millage, were to be included in the constitutional limit[2],[3]. However, the Supreme Court ruled in a case involving an emergency millage to pay a court judgement, that the millage could be added to the constitutional limit[4].
The Board is using Act 88 written in 1913 to skirt the constitutional limit on property taxes. Act 88 is entitled; “Advertisement of agricultural advantages” and it says in part;
- “The boards of supervisors of the several counties may levy a special tax on the taxable property within their respective counties for the purpose of creating a fund; or appropriate out of the general fund an amount to be used for advertising agricultural or industrial advantages of the state or county or any part of the state, or for collecting, preparing or maintaining an exhibition of the products and industries of the county at any domestic or foreign exposition, for the purpose of encouraging immigration and increasing the trade in the products of Michigan, or advertising the state and any portion thereof for tourists and resorters. The total tax levied in any one year shall not exceed 5 cents on each $100.00 of taxable property within the county”[5]
Thus, the law allows a levy for advertisements and exhibitions. Most of the current and proposed uses of the tax revenue has nothing to do with either allowed uses. For example;[6]
Brownfield office staffing
(brownfields are land in need of environmental cleanup before they can be redeveloped)
Commercial kitchen incubator
(capital expenses for building and equipment)
Local business employment cooperative
(business plan development, legal consultation, startup assistance)
Business attraction incentive fund
(costs for relocating or expanding businesses)
By far, the most money is allocated to SPARK, which is a non-profit focused on economic development in Washtenaw County. Most of the activities of SPARK have nothing to do with advertisements or exhibitions. Some of their money and services also go to support foreign companies.
What the Board is doing with the Act 88 millage most likely violates the constitutional limit on property taxes either because such millages should be included in the limit or because it is not being used for the purposes stated in the law. The Headlee amendment allows for enforcement of the limit as follows.
- Any taxpayer of the state shall have standing to bring suit in the Michigan State Court of Appeals to enforce the provisions of Sections 25 through 31, inclusive, of this Article and, if the suit is sustained, shall receive from the applicable unit of government his costs incurred in maintaining such suit.
The proposed Act 88 millage will be before the Board for final approval at their meeting on Wednesday November 6, 2013.
| 1_headlee_amendment.pdf |
| 2_attorney_generals_opinion_1979.pdf |
| 3_attorney_generals_opinion_1945.pdf |
| 4_american_axle_vs._hamtramek.pdf |
| 5_act_88_of_1913.pdf |
| 6_2014_act_88_investment_options.pdf |
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