Tax bills that property owners in Leelanau County will start receiving in July will have risen at least 10% over two years, with another substantial increase expected in 2025 due to stubbornly high inflation.
“I wouldn’t be surprised if we get another increase of about 5% next year,” said Julie Krombeen, assessor for four townships in the county. “People are concerned. It hits us all. And nobody is exempt from the 5% increases.”
Krombeen, a township assessor for 26 years, has a leading role but little leeway in the property tax system of Michigan. It’s her job to ensure that the equalized value of property within her jurisdictions is accurate compared to the current market. Both equalized and taxable values were listed on assessment notices mailed in February to property owners.
But assessors have little to say about taxable value increases, which are directly calculated into the amount of taxes paid by landowners. State equalized values reflect the worth of property but are not calculated into the amount owed on property tax bills.
The back-to-back increases of 5% in the taxable values of property are the highest allowed by the Michigan Constitution. The taxable value of a property is multiplied by millage rates to determine how much is owed in property taxes.
Local government revenues will benefi t from the higher taxes paid by landowners. Interim finance director Catherine Hartesvelt announced Tuesday morning at the executive meeting of the County Board that county coffers are expected to take in $1.1 million more than anticipated in the 2024 budget. She had just received news of the windfall from county Equalization Director Andrew Giguere.
Protests filed with township boards of review in February asking for reductions in taxes had little if any effect, Krombeen continued, unless factual mistakes in property descriptions or building sizes were uncovered. Those types of mistakes are rare, she added.
Krombeen and other assessors across the peninsula have played educational more than regulatory roles during the board of review process since adoption of Proposal A to the Michigan Constitution in March 1994. The amendment offset some of the burden of property taxes that support public schools with revenue from a 50% increase in the statewide sales tax, which jumped to 6%.
The amendment allowed increases in the “taxable value” of properties in line with inflation up to a cap of 5%.
The system benefited taxpayers during the low inflation years that dominated after passage of Proposal A. Only once did inflation top 4 % in the 28 years that followed — 4.4% in 2009. From then through 2021 the highest inflation rate affecting landowners was 2.7% recorded in 2012.
But inflation for 2022 property taxes, which reflected data from the previous year, was set at 3.3%. Inflation rates for 2023 and 2024 taxes came in at 7.9% and 5.1%. The affect on property owners was tax increases of 3.3%, 5%, and 5 % again.
Krombeen said few people attended board of review meetings in her townships, which wrapped up March 14 in Centerville Township. A handful of assessment protests were made in writing.
Equalization Director Giguere has heard similar reports from other township assessors. The Equalization Department conducts property sales studies that township assessors factor into equalized values.
“What we do in Equalization is determine what level assessments should be in each township. What we don’t want is for someone in Kasson Township to be assessed at 44% of the cash value of their property when the same property right across the road in Solon Township is at 51 %,” Giguere explained.
County assessors also determine if local jurisdictions must “roll back” their millage rates to comply with the Headlee Amendment to the constitution, which was designed to curtail government growth as well as keep tax bills low.
The amendment requires townships, villages, school districts and other local governments to reduce millage rates to maintain revenue growth from property taxes at or below the rate of inflation. Tax revenue created by new construction is exempt from the formula.
However, no government in Leelanau County was required to reduce millage rates in 2023 because inflation was so high. Inflation remained high for 2024 taxable values, which is expected to create $1.1 million in unbudgeted revenue for Leelanau County.
Giguere expects only modest or no rollbacks to be required in 2024 because inflation remains active.
