Understanding your property tax bill


Property tax bills arrived in the mail twice each year, with the summer bills coming in the first week of July and the winter bills in the first week of December.  These bills have a hodgepodge of listed information used to calculate the most important part of the bill: The amount due.

 

For those who want to have a better understanding of the details of their tax bills, I put together a point-by-point list of how much tax you're paying to whom.

BASICS OF PROPERTY TAXATION

Your property taxes are based on two factors: Value of the property and the number of mills levied by the various taxing entities (city, schools, county, etc).

A mill is $1 of tax for every $1,000 of a home’s taxable value, which is roughly one-half the home’s market value. Each home’s taxable value is different, but in very general terms, a home worth $100,000 would have a taxable value of $50,000, so that house will pay $50 for each mill levied.  If the bill includes 10 mills, that house would pay $500 ($50 x 10). The total mills on Dearborn's 2019 summer tax bill were 54.2026, so if your house is worth $100,000 and you pay $50 per mill, your summer tax bill will be $2,710 (plus 1 percent administration fee, we'll get to that later). Total mills on Dearborn's 2019 winter bill are 8.2845, so if your house is worth $100,000 and you pay $50 per mill, your winter tax bill is $414 (plus administration fee).

It gets more complicated than that. If you stay in your home from one year to the next, state law says your home’s taxable value can only go up by 5 percent or the rate of inflation, whichever is less. Your home’s actual value could, in a good year, go up by 8 or 10 percent, for example. But state Proposal A of 1994 limits your taxable value increases to prevent your tax bills from going up in leaps and bounds (until you sell your house).

This leaves you with two different values on your tax bill: Taxable value and SEV (state equalized value). SEV is supposed to be exactly half of your home’s assessed market value. But taxable value is most often lower than that. That can be confusing, but is also unimportant in this discussion, because the only value number you need to be concerned with related to your taxes is the taxable value.

 

If you've owned your home for more than a year, unless you've changed your property in a way to get a higher assessment, you will pay 2.4 percent more in property taxes this year than in 2018. The total winter tax rate has changed only fractionally, increasing about one-eighth of one mill; however, the taxable value from 2018 to 2019 has increased by the rate of inflation -- 2.4 percent.

YOUR 2019 WINTER TAX BILL, ITEM BY ITEM


Here are the details that add up to the bottom line of your tax bill.  I explain what the abbreviations mean, the amount of mills levied for each, and extra background on some of the items.

WAYN CO VOTED OP: Wayne County general operating millage that is additional beyond the permanent amount authorized by voters when they approved the county charter in 1981. The regular county millage is collected on the summer tax bill. Voters approved this extra amount for basic county operations in 2000, and approved a 10-year renewal in 2009, through 2019. The county cannot levy this millage next year unless voters approve another extension sometime in 2020. (0.9529 mills)

WC SOLDIERS: Authorized by state law in the late 1800s for counties to create a veterans relief fund. (0.0368 mills)

WC PUBLIC SAFETY: The extra tax is dedicated to the county Sheriff’s Department and operation of the county’s jails, and is not connected whatsoever to the construction of a new jail. It was authorized by voters in 2002 and renewed in August 2012 for 10 years, from 2012 through 2021. The county cannot levy this millage on the 2022 winter tax bill without approval of an extension by voters. (0.9381 mills)


WAYNE CO PARKS: Authorized by voters in 1996, this tax is dedicated to the county parks system and also provides some funding annually for local parks projects. Voters have renewed this tax four times, every five years since it was enacted, most recently in August 2016, from 2016 through 2020. It cannot be levied on the 2021 winter tax bill without another extension by voters. (0.2459 mills)


WAYN CO ZOO AUTH: Approved by voters to help fund the Detroit Zoo in 2008, and extended by voters in 2016 to run from 2018 through 2027. This is not a tax for Wayne County government, despite the name of the taxing agency, the Wayne County Zoological Authority. The authority is a separate entity created by state law, with the county’s approval, to seek voter approval and levy the tax. (0.1 mills)


WCTA (SMART): SMART Bus tax, approved by voters, and increased from 0.45 mills to 1 mill in 2014. Technically not a tax for Wayne County government, despite the name of the taxing agency, the Wayne County Transit Authority. Voters last renewed this tax in 2018 to run through 2021. It cannot appear on the winter 2022 tax bill without additional voter approval. (This tax should not be confused with the Regional Transit Authority or other attempts to get taxpayers to approve another tax for mass public transit, including one that is expected to be put before voters in 2020.) (0.9991 mills)

HCMA: Tax for the Huron Clinton Metropolitan Authority, which operates the 13 Huron Clinton Metroparks in five counties, Wayne, Oakland, Macomb, Washtenaw and Livingston. Perhaps the best known of the parks to Dearborn residents, due to its proximity to Camp Dearborn, is Kensington Metropark, which also was the first of the parks to open to residents, in 1947. This tax is permanent, authorized by the state legislature in 1939, approved by voters in 1940 and first levied in 1942. The tax is not to exceed one-quarter mill. (0.2117 mills)

DIA: Detroit Institute of Arts tax. Voters approved this tax for 10 years in 2012, and the DIA indicated at the time it did not expect to ask for it to be renewed after it expired in 10 years. The DIA has changed its mind and is asking for an extension two years before the expiration, putting the renewal on the ballot March 10, 2020, during the presidential primary election. (0.2 mills)

CSO DEBT: The massive sewer separation project that the city has been working on for many years is paid for by bonds (borrowed money) which are repaid by this millage. (CSO stands for combined sewer overflow, which the project is known as.) Voters were given the choice of having this project put on their water bills or on property taxes, and voted for this tax. (4.6 mills total on two itemized lines)

ADMINISTRATION FEE: Your tax is figured by multiplying the mills by taxable value. The city then is allowed under law to add a “service fee” of up to 1 percent to offset costs associated with collecting the taxes and distributing them to other taxing units. (1 percent of total.) The administration fee is listed near the bottom of the bill, under "total tax due."

Total mills levied by all taxing entities on your winter tax bill:  8.2845 mills.

To figure the taxes due: multiply the taxable value by 0.0082845 and then add 1 percent of that total (administration fee) to figure your total tax bill.

YOUR 2019 SUMMER TAX BILL, ITEM BY ITEM

Here are the details that add up to the bottom line of your tax bill.  I explain what the abbreviations mean, the amount of mills levied for each, and extra background on some of the items. This is for a homestead property, meaning it's the home in which you live and declare as your homestead. Non-homestead houses, like rentals, pay an additional 18 mills in school tax.

DBN SCHL SUPPL: These are "Hold harmless" mills approved by voters in the Dearborn Public Schools district. Proposal A of 1994 changed how schools are funded from local property taxes to a statewide property tax, but districts that would have lost ground in that formula were allowed to ask their voters for supplemental millage to hold them harmless from losing money under Proposal A. Dearborn voters approved this and renewed it a few times, most recently in 2014 for 10 years. (6.17 mills)

DBN SCHL DEBT 02:   These mills are levied to repay bonds, money the school district borrowed for construction and renovation. Voters approved this $150 million "bond issue" proposal in 2002.  (3.6 mills)

DBN SCHL DEBT 13:  These mills are levied to repay bonds, money the school district borrowed for construction and renovation. Voters approved this $76 million "bond issue" proposal in 2013. (1.22 mills)

HFCC:  Henry Ford College millage, approved by voters. It will expire (and be up for renewal) in 2023.  (4.0 mills)

SET: State Education Tax. Proposal A created this tax, which pays into the state School Aid Fund, which is distributed back to local districts on a per-pupil basis.  (6.0 mills)

RESA OPER: Operating millage levied by the Wayne Regional Educational Service Agency (used to be called intermediate school districts, or ISD), which provide services to local school districts.  (0.0965 mills)

RESA SPEC EDUC:  Special education programs in local districts are funded through this RESA millage. (3.3678 mills)

WAYNE CO OPER: Wayne County government operating millage, an amount allowed under the Wayne County Home Rule Charter. (5.6483 mills)

CITY OPER: City of Dearborn millage for general operations as allowed in the city charter.  (15.0 mills)


CITY VOTED OPER: Extra operating millage for the city beyond the charter-allowed limit, approved by voters when home values crashed nearly 10 years ago, to make up for some of the revenue lost by lower property values. Residents approved this extra tax money in 2011 for five years, and renewed it for another five years in 2016. (3.5 mills)

CITY RUBBISH: State law allows cities to collect mills for trash removal beyond the charter and voter-authorized millages. (1.91 mills)

CITY LIBRARY: Dearborn voters approved a separate millage in 2011 for 10 years for the city's libraries, up to 1.8 mills. (1.69 mills)

RESA ENHANCED: Voters in November 2016 approved 2 mills for six years to be collected by the Regional Educational Service Agency, and distributed back to local districts. This was a way around Proposal A's restriction on individual districts collecting local millage for operations.  (2.0 mills)

ADMINISTRATION FEE: Your tax is figured by multiplying the mills by taxable value. The city then is allowed under law to add a “service fee” of up to 1 percent to offset costs associated with collecting the taxes and distributing them to other taxing units. (1 percent of total.) The administration fee is listed near the bottom of the bill, under "total tax due."

Total mills levied by all taxing entities in your summer tax bill:  54.2026 mills.

To figure the taxes due: multiply the taxable value by 0.0542026 and then add 1 percent of that total (administration fee) to figure your total tax bill.