Will city tax be on ballot? When's next school bond try?
Our seasonal discussion on property taxes should heat up soon, with assessment notices due to arrive next month and this being an election year for city offices. Significant city taxes previously approved by voters are set to expire, and I expect city officials are weighing whether to ask voters for renewal of those taxes, either in the August or November election. Meanwhile, Dearborn Public Schools officials are likewise weighing whether/when to ask voters to approve tax-supported bonds for renovations of school buildings. If you believe that the school district’s narrowly unsuccessful attempt in 2019 to get a bond proposal approved reflects growing anti-tax sentiment in Dearborn, think again. Last year, pandemic and all, Dearborn voters said yes to four, yes four, property tax renewal proposals. In case you missed it, voters renewed the Detroit Institute of Arts millage last March, two Wayne County proposals (parks and operating tax) in August, and the Regional Educational Service Agency’s 2-mill tax for local school districts in November. All approvals were by wide margins. So, if there is a taxpayer revolt in Dearborn, it was sheltering in place in 2020. Scheduled to expire after appearing on this summer’s tax bill will be 3.5 mills for city operations and 1 mill for libraries. Both were first approved in 2011 to make up tax revenues the city lost in the wake of the Great Recession after the 2008 housing market crash. The library millage was for 10 years and the general operations millage was for five years, and voters approved renewal of the 3.5 mills for five years in 2016. This is significant millage. The combined 4.5 city mills cost the owner of a $120,000 house roughly $270. But, to eliminate those 4.5 mills would cut $14 million from city revenues, and that would not be made up by cutting “fat” from the city budget. Service reductions would be inevitable. I can’t imagine the city would let $14 million lapse. (Yes, there is no such thing as a temporary tax. None that I’ve seen, anyway.) The question is, how will city officials handle putting it before voters? Or, what services will they recommend cutting if they don’t? The school district’s tax plans are more difficult to predict. One thing is certain, though: The building renovations that were cited as necessary when Dearborn Public Schools proposed a $240 million bond issue in 2019 are no less necessary now. They’re probably even more so. It’s up to the school board, of course, but I don’t see them putting a bond proposal on the ballot this year, especially if it would be on the same election as the potential city millage renewal. So, while it’s possible we could see a school bond proposal this year, my best guess is that 2022 is more likely.
There should be a tiny bit of good news for taxpayers in the assessment notices next month. Unless you’ve just bought your house, the value on which your taxes are calculated rises by the rate of inflation each year. If my research is correct, the inflation rate for 2020 was 1.4 percent, which means your property taxes will rise by that amount this year, compared to inflationary increases around 2 percent for each of the last few years. I did say "tiny bit of good news."
With the 2020 tax bills behind us, I’ve updated detailed information on every item on your property tax bills, along with a chart showing what portion of your tax dollars go to the city, schools, county and other entities. It also gives a more detailed explanation of the how taxes are calculated and some of the terminology I’ve used in this post. For more property tax information than most people will want to know, click here.