KCTA Opposes Proposition 1, State Sales Tax Hike

Statewide Proposition 1, which will be on the ballot Tuesday, May 5, will amend Michigan’s constitution to enact a permanent sales tax increase from 6% to 7%, a 17% increase. The Kent County Taxpayers Alliance opposes this constitutional amendment because much of the money being raised is not going to roads at all, but other government entities.

“This is a general tax increase, not a road tax,” said Dr. Eric Larson, president of KCTA. “The state doesn’t need another tax hike of $2 billion a year.”

While proponents refer to the tax increase as one for about $1.3 billion for roads, the passage of the ballot question would trigger other tax increases as well, such as higher gas taxes and higher car and truck registration fees. Only about 60% of the total tax increase would go to roads, while the rest would be spread amongst other local governments, in order to garner their support for the issue.

“We see local bureaucrats promised additional funding if the constitutional amendment passes,” said Dr. Larson, “and now they’re spending tax money to campaign in favor of a tax increase. It’s inappropriate and insulting to voters.”

KCTA encourages those who wish to help with defeating this proposal to contact the organization formed to oppose the issue, Protect Michigan Taxpayers.

Permanent link to this article: http://www.kentcountytaxpayers.org/kcta-opposes-proposition-1-state-sales-tax-hike/

How fast will The Rapid’s Silver Line bus be?

According to data from The Rapid, the average speed of the new Silver Line bus rapid transit (BRT) route in Grand Rapids will be about 17 miles per hour. Peter Varga, the head of The Rapid bus system, says that the speed will be about 22 miles per hour along Division and about 10 miles per hour on the rest of its route. Despite the usage of the term bus “rapid” transit, this is only slightly faster than the average bus that The Rapid operates, and is slower than about a quarter of its existing routes.

Read our entire article here.

Permanent link to this article: http://www.kentcountytaxpayers.org/how-fast-will-the-rapids-silver-line-bus-be/

KCTA calls on Grand Rapids city leaders to avoid the appearance of impropriety

KCTA_logo_2014-01Today the Kent County Taxpayers Alliance called on Grand Rapids city leaders to take a stand against the appearance of impropriety in regards to the upcoming city income tax increase election on May 6. According to an article in the Grand Rapids Press, the campaign urging a “yes” vote is largely funded by private companies that appear set to gain significant revenue from the city if the tax increase passes.

“We believe that the Grand Rapids city commission should stand up and show that they reject any appearance of impropriety by passing a resolution barring any company that contributes to their tax increase campaign from bidding on city projects that result from the tax increase,” said Eric Larson, spokesperson of the Kent County Taxpayers Alliance.

Of the over $23,000 that the “yes” campaign has raised, nearly two thirds was raised from companies that appear to stand to directly benefit from the city’s proposed spending plan, including construction, lobbying, and engineering firms.

“Millions of dollars of spending is on the line,” said Larson, “and it’s only right for city leaders to distance themselves from appearing to reward those who donate to political campaigns. Taxpayers need to be confident that the process isn’t corrupted.”

KCTA also notes that City Commissioner Walt Gutowski, who owns Swift Printing and voted in favor of putting the issue on the ballot, is directly and personally benefiting from the “yes” campaign. More than $6,500 has been spent with his company for campaign materials by those favoring passage of the tax increase.

Permanent link to this article: http://www.kentcountytaxpayers.org/kcta-calls-on-grand-rapids-city-leaders-to-avoid-the-appearance-of-impropriety/

Tips for appealing your 2014 property tax assessment

Michigan homeowners have the right to appeal their assessments to the local board of review if they feel the assessment is incorrect. It is important to note that many review boards meet in March, but dates vary by each municipality, so be sure to contact your local assessor. Newly-enacted legislation requires the assessment notice to be mailed out at least 14 days before your local board of review meets.

The property tax appeal process has a very tight window and each municipality does things slightly differently. For instance, in the City of Grand Rapids, you must first submit the attached form to the Assessor’s Office for an Assessor’s Review. The deadline this year is February 14, 2014. The Assessor may accept or reject your appeal, at which time you can request a meeting with the March Board of Review. If you’re not happy with the March Board of Review result, you may appeal to the Michigan Tax Tribunal.

Download KCTA’s 2014 property tax assessment appeal guide.

Steps for Appealing

  1. Immediately contact your city, village, or township assessor’s office and ask about their assessment appeal process. They may have a form for you to fill out and they will tell you their submission deadlines. These deadlines are very strict, so you must have your form submitted before the deadline. Simply mailing before the deadline does not count.
  2. Obtain a copy of your property tax worksheet or appraisal card. This is available from the local assessor’s office. The worksheet lists information such as size of house, style, number of baths, etc. Ask the assessing department to fully explain how to read the document. You may also obtain worksheets for similar properties which recently sold in the area to help determine the value of your property. Many cities put this information online.
  3. Carefully check the worksheet for errors. If you notice any errors, the assessor may agree to change some of the information or figures at that time. If not, you will have to make your case with the board of review. Your worksheet may include a “percent good” calculation which shows how much your home has depreciated. For example, a 10-year-old house may be listed as 90 percent good. Percent good is another factor to use when comparing your home to other homes.
  4. Check with your local assessor regarding your home’s taxable value. For property tax year 2011, the inflation rate multiplier is equal to the ratio of fiscal year 2010 average consumer price index divided by the fiscal year 2009 average consumer price index. Again, as a result of Proposal A (and therefore under the State Constitution), a property’s taxable value cannot increase by more than the increase in the U.S. consumer price index or 5 percent, whichever is less. In addition, a property’s taxable value cannot exceed its state equalized value.
  5. Inspect the inside of your home. As noted in Step 3, the “percent good” is the way an assessor depreciates the value of a home based on its age, meaning normal issues common to older homes are not considered in the specifics of the assessment. However, problems not associated with general aging, such as a cracked foundation or wall construction problems, should be specifically addressed in your appeal. Written repair estimates and photographs of structural damage are good evidence of defects which could affect property value.
  6. Note changes to your neighborhood. Realtors say location is the single most important feature in determining the value of your home. If you live near a major road or in a mixed-use zoning area, for example, your home may be less desirable than the same home in a purely residential neighborhood. If the characteristics of your neighborhood have changed, obtain copies of citizen complaints about excessive noise or eyesores and show this evidence to the board.
  7. If you recently purchased or refinanced your home, determine whether your purchase price or your appraisal is lower than two times your SEV. Providing this documentation to the board of review does not guarantee a lower assessment, but it will help strengthen your case.
  8. Inform your assessor about personal property included in the sale price of your home and detailed on the purchase agreement. One of the most common mistakes home buyers can make is to fail to inform the assessor of personal property and other valuable items included in the sale and detailed on the purchase agreement. Personal property items often included in a home’s sale price, such as furniture, curtains, a washer or dryer, etc., are exempt from assessment. If you did not inform your assessor in writing about these items, your assessment may erroneously include this value.
  9. Compare your property to similar homes in the area, especially those that recently sold. Comparable property assessments are one of the most important tools when appealing your property assessment. If comparable properties are assessed lower than yours, your home may be over-assessed. Check the assessed value, type of house, and zoning. Compare the true cash value per square foot. Keep in mind that comparisons should only be made between similar types of homes. (Compare two stories with two stories, ranch houses with other ranch houses, etc). An excellent online tool for looking at homes that recently sold in your area is available on the Grand Rapids Association of Realtors web site at www.grar.com and click on “Find Prices of Recently Sold Homes!”
  10. Either write a letter to the assessor or use the form they provide. A sample appeal letter is attached.

Also view the City of Grand Rapids assessor’s appeal form.

Permanent link to this article: http://www.kentcountytaxpayers.org/tips-for-appealing-your-2014-property-tax-assessment/

New Kent County Open Government Project web page released; compare tax rates, schools, and transparency

Today the Kent County Taxpayers Alliance announced the release of its completely revitalized Kent County Open Government Project (KCOGP) web site. This site allows residents of Kent County to compare local tax rates, school district performance, and local government transparency. It also allows anyone to create and print out a Freedom of Information Act request to any unit of local government in the county.

“We’re very excited to release our Kent County Open Government Project web site,” said Jeff Steinport, spokesperson for the Kent County Taxpayers Alliance. “The new features are beyond anything we’ve seen for any taxpayer organization in Michigan. We’re proud of the hard work that went into the site and we know that it will be very useful for all Kent County residents.”

The new site, available at www.OpenGovernmentProject.org, allows anyone to view the tax rates for each township, village, and city in the county, as well which school districts overlap each local unit of government. This, combined with the ability to compare school district performance, allows residents to find the best schools at the lowest cost.

For instance, the KCOGP web site allows users to find the school district with the highest graduation rate in the county – Caledonia Community Schools. When the user views the details of that school district, the municipalities that overlap it can be compared according to tax rate. The lowest local tax rate in the Caledonia Community Schools District is Lowell Township, with the 77th lowest taxes in the county (out of 93 local taxing units).

The Kent County Open Government Project also rated each local unit of government in 24 areas of transparency, ranking them on how open they are and how much information they make available to taxpayers online. Each unit of government was ranked with a letter grade. The highest-ranking government in the county was the City of Wyoming, with a raw score of 22 and a letter grade of A. The lowest ranking local government was a tie between the Village of Sand Lake and the Village of Casnovia, both with a very poor score of 3 and a letter grade of F.

Some interesting statistics available on the Kent County Open Government Project web site include:

  • The highest taxes in the county are in the part of the City of Grand Rapids that overlaps Forest Hills Public Schools, with an average tax bill of $3,403 each year;
  • The lowest taxes in the county are in the part of Solon Township that overlaps Tri County Area Schools, with an average tax bill of $1,466 each year;
  • The school district with the highest graduation rate is Caledonia Community Schools, with a 95.11% graduation rate;
  • The school district with the lowest graduation rate is Grand Rapids Public Schools, with a graduation rate of 44.56%;
  • Wayland Union Schools spends the most per pupil in the county, spending $17,268 each;
  • Tri County Area Schools spends the least per pupil in the county, spending $9,387 each.

Permanent link to this article: http://www.kentcountytaxpayers.org/new-kent-county-open-government-project-web-page-released-compare-tax-rates-schools-and-transparency/

Sweetheart transfer of 160 tax-foreclosed properties to the taxpayer-funded Kent County Land Bank Authority by the City of Grand Rapids is bad for taxpayers and bad for city government

The Grand Rapids City Commission is due to vote this week on transferring more than 160 tax-foreclosed properties to the Kent County Land Bank Authority. This is a bad move for both taxpayers and for the City of Grand Rapids.

The Kent County Land Bank Authority, a taxpayer-funded real estate speculation entity, was formed by the Kent County Commission in 2011, but it began aggressively requesting special treatment from local government units last year in acquiring tax-foreclosed properties at far below market prices. Despite the fact that the Land Bank is a government entity that receives both direct and indirect taxpayer funding, David Allen, its executive director, was quoted last month as saying “I make no bones about it: We’re not a nonprofit; we’re a company. We’re a development company.”

As part of the proposed sweetheart deal, the City Commission of Grand Rapids purports to place a time limit on the Land Bank of 18 months to flip all of the properties it is receiving. However, the agreement between the Land Bank and the City has little in the way of teeth to enforce the timeline and it potentially would leave the City on the hook for failed Land Bank investments. The agreement, available online here, only states that the city “may” repossess the properties that the Land Bank fails to flip after 18 months. Furthermore, if the City decides to do so, it would be saddled with a clearly unwanted properties, including all the costs associated with owning such properties. No other consequence for a failure to abide by the agreement is included.

At a minimum, the City should add teeth to this agreement so that repossession is mandatory. In the case of such a failure by the Land Bank, the Land Bank should be on the hook for any and all costs incurred by the City in disposing of such properties. The proposed agreement is a sweetheart deal with the trappings of being all bark and no bite with a timeline that appears to force accountability, but has no real intent being invoked. It’s essentially meaningless with no serious enforcement requirements.

One of the allegedly "blighted" properties that the Land Bank will receive in a sweetheart deal - 49 Monroe Center NW, Ste 1B

One of the allegedly “blighted” properties that the Land Bank will receive in a sweetheart deal – 49 Monroe Center NW, Suite 1B

With the recent failures of City-granted tax breaks when promised jobs failed to materialize, it’s just good business for the City to ensure that promises made to taxpayers are kept and those who make those promises are held to account in the event that they don’t pan out.

Another important issue that taxpayers should consider is the impact of these property transfers on the budgets of both the County and other local governments. The Kent County Commission, after pressure from the Kent County Taxpayers Alliance, changed its policy on transferring properties to the Land Bank before the public auction and left the issue to local cities and townships. Because of that change, the City of Grand Rapids is considering this transfer to the Land Bank, again before the public auction and only for the amount of taxes owed on those properties.

As we’ve pointed out previously using the county’s own records, the public auction generally raises about 1.7 times the amount of taxes owed on tax foreclosed properties. This is good for the county because that additional money is transferred to the county’s general fund. However, because the City of Grand Rapids proposes to take more than 160 properties out of the public auction process, we expect the county to lose approximately $850,000 in revenue.

The impact doesn’t stop there. The Land Bank, while it owns properties, does not pay property taxes. This reduces revenue both to the City and to other local government, including schools. On top of that, once the Land Bank sells its properties, 50% of the property taxes collected for the next five years go to the Land Bank, a self-described “development company,” and not to the City, county, or schools.

Just what makes this self-described “development company” unique and deserving of special favors continues to escape us.

The City claims that the transfer of these properties fulfills a public purpose of “restoring blighted properties” and “providing affordable housing.” We’ve heard from several individuals who have, in the past, purchased homes at the public auction as a way of getting an affordable home, which they then fixed up and built equity. The City’s actions are having the opposite effect – it is reducing the availability of affordable homes by preventing average citizens from purchasing homes at a public auction. The auction, a fair and open process, is being replaced with an opaque process subject to cronyism and managed by a taxpayer-funded entity that is acting like a private company with virtually no public accountability.

We urge the Grand Rapids City Commission to reject the sweetheart deal, allow the public auction to proceed, and offer to transfer only those properties which are truly blighted and unwanted to the Land Bank, so it can fulfill its intended mission.

Permanent link to this article: http://www.kentcountytaxpayers.org/sweetheart-transfer-of-160-tax-foreclosed-properties-to-the-taxpayer-funded-kent-county-land-bank-authority-by-the-city-of-grand-rapids-is-bad-for-taxpayers-and-bad-for-city-government/

New Poll Shows Grand Rapids Tax Increases Face Steep Climb and Land Bank Lacks Public Support

The Kent County Taxpayers Alliance (KCTA) commissioned a survey with JD Consulting from June 1-3 which found that there is little support for the proposed tax increases in the city of Grand Rapids. In a phone survey of likely off-year election voters in the city of Grand Rapids, 52.4% of respondents opposed raising taxes to pay for increased funding of pools with only 26.8% support and 20.8% without an opinion. The results show that if city officials and supporters hope to pass the measure, they will have to significantly turn out their supporters, convince opponents, and most of those who are unsure. KCTA does not intend to take a position on the proposed tax increase.

In addition, KCTA sought to determine the support for the Kent County Land Bank Authority and its activities with citizens in Grand Rapids and two suburban cities. KCTA first asked the question, “Do you agree or disagree with the following statement, Government should not offer what private businesses can provide?” 56.4% agreed that government should not and 43.6% disagreed and felt government should provide services in competition with private businesses. The second question asked if people supported the taxpayer-funded Land Bank acquiring properties directly from the city or if they should first go to auction and the highest bidder. The results were broken down separately for Grand Rapids, Walker, and Grandville. Support for the auction process in Grand Rapids was 47.4% versus 31.5% supporting direct acquisition by the KCLBA and 21.1% with no opinion. The cities of Walker and Grandville had similar results with 73% and 75% support for the auctions respectively versus 24% and 22% for direct acquisition and 3% and 4% with no opinion.

The results of the polling on the Land Bank show a clear understanding from the people in those three cities to allow for an auction process and equal opportunity of acquiring property for everyone. The results did not specifically ask the question of whether the Land Bank served a vital role in the county. Said KCTA spokesman Eric Larson, “The polling results tell us what we primarily already knew. People want a fair process to allow equal opportunity for the purchase of tax foreclosed property to allow small entrepreneurs, large developers, and non-profits to revitalize these lots. There is clearly very little concern from those outside of Grand Rapids of problems with undeveloped or foreclosed lots not being utilized in their communities. We have been very pleased with the restrictions that the county commission has put on the auction process with the Land Bank but are concerned still that cities like Grand Rapids could hand over property at minimum bid prices and end up hurting their bottom line since the property would not generate nearly as much tax revenue as it would if a private individual purchased it. Hopefully, cities and townships will be at least very judicious in handing over real estate to the Land Bank.”

Permanent link to this article: http://www.kentcountytaxpayers.org/new-poll-shows-grand-rapids-tax-increases-face-steep-climb-and-land-bank-lacks-public-support/

Under pressure from KCTA, Wyoming Public Schools moves millage election to November, re-evaluates tax request amount

Wyoming Public Schools Superintendent Thomas Reeder announced this week that he is asking the school district’s board to reconsider the tax increase request it approved last week. The board previously decided to ask voters to approve the exact same millage issue in August of this year that failed at the ballot earlier this month. The failed request would have raised $53 million for the school district. This sort of rapid-fire tax increase attack on voters is referred to by the Kent County Taxpayers Alliance as an abusive tax election.

Upon learning about this abusive tax election request, the Kent County Taxpayers Alliance announced that it would oppose the Wyoming Public Schools ballot issue in August. KCTA pointed out that the school district’s leadership claimed it wanted maximum participation of the community, yet the district defended the use of a May election in the first place. May elections traditionally are very low turnout. KCTA supports holding tax elections only in August or November, when most voters expect to be voting.

Now, under pressure from KCTA, the district’s leadership has abruptly changed course and is rethinking the decision it made just last week. The new millage request will be held in November of this year and the total amount is being re-evaluated so that it will appeal to more voters.

“We applaud the school district’s leadership for rethinking its abusive tax election request,” said Jeff Steinport, spokesperson for KCTA. “Taxpayers deserve better than to be beaten over the head with successive, identical tax elections. The school district is doing the right thing in evaluating its needs and coming back to the community, hat in hand, with a more modest proposal.”

Permanent link to this article: http://www.kentcountytaxpayers.org/under-pressure-from-kcta-wyoming-public-schools-moves-millage-election-to-november-re-evaluates-tax-request-amount/

KCTA to Oppose Wyoming Public Schools’ August Abusive Tax Election

The Kent County Taxpayers Alliance today announced that it will oppose Wyoming Public Schools’ abusive tax election in August of this year. The Wyoming Schools’ millage increase attempt on May 7th was defeated at the polls, yet the school district will attempt to get voters to pass the very same tax increase in August of this year.

Such rapid-fire elections, scheduled in an attempt to get voters to pass an issue that was already defeated, are a waste of taxpayer dollars and are referred to by KCTA as abusive elections.

“Wyoming Public Schools tried an abusive election in 2011, when their attempt at a tax increase failed in May of that year,” said Jeff Steinport, spokesperson for KCTA. “The district returned to voters in August of the same year, just three months later, and it was defeated even more resoundingly. (58-42% and then 63-37%)”

The Kent County Taxpayers Alliance successfully engaged in a get out the vote effort for the August 2011 election in Wyoming to inform voters of the school district’s abusive election tactics.

Wyoming Public Schools’ superintendent Thomas Reeder is quoted as saying that he wants true representation of the public at the next election. “This begs the question,” said Steinport, “If the district’s leadership wants maximum participation by the public, it should have chosen November, for its tax increase election in the first place.

“If the government school leaders were honest, they would recognize the folly of their argument. Godfrey Lee Schools only had 6% turnout, were those positive results invalid? And if the Wyoming millage question had passed, would the board have voted to re-ask the question with only 11% turnout? The decision by the school board to rerun the election shows a total disregard and almost contempt for those who took the time to vote. They are clearly not interested in the democratic process.”

KCTA also successfully fought an abusive tax election held by Grand Rapids Community College in August of 2007, just three months after the same tax issue was defeated in May of that year.

Permanent link to this article: http://www.kentcountytaxpayers.org/kcta-to-oppose-wyoming-public-schools-august-abusive-tax-election/

Kent County Land Bank Changes are a Step in the Right Direction

In response to criticism from the Kent County Taxpayers Alliance (KCTA) and a lawsuit by a group of local real estate professionals, the Kent County Commission last week approved some changes to how the Kent County Land Bank operates.

Previously, the Kent County Land Bank identified properties that it wanted to purchase from the County as part of the property tax foreclosure process. The problem that the KCTA first publicized is that the Land Bank received preferential treatment and was able to purchase properties before the public auction at prices far below market value. In addition, the Land Bank picked properties solely for the purpose of real estate speculation to fund its operations and not to address blight, as it was designed to do. The statute that created land banks clearly states that the Land Bank will not receive properties until after the public auction process, if any unsold properties are left. This is meant to address the problem of blighted properties which do not sell because they are too expensive to rehabilitate or pose environmental problems.

A lawsuit was filed by local real estate professionals in Kent County to enforce the law as it is written. The suit was dismissed at the Kent County Circuit Court level because the Court ruled that the plaintiffs did not have standing. The issue of whether the law is being violated was not addressed and is yet to be resolved. We supported the lawsuit because we believe that affected parties should be able to sue when the government is breaking the law. The Court begged to differ and decided that essentially no one has standing to sue when the County government is breaking the law. The case is under appeal. The County’s Land Bank Study Committee claims that the legal issue has been resolved, but it has not. The real legal question was never addressed by the Court. There is still a significant, unresolved legal question as to whether allowing the Land Bank to receive properties before the auction process is completed is legal. (Review the statute yourself here. The relevant section is paragraph (6)).

It is KCTA’s position that the Land Bank deprives both local governments and the County government of much-needed tax revenue. Although some County leaders claimed that money received from the foreclosure process cannot be transferred to the general fund, our own Freedom of Information Act request showed that this is not the case. In fact, a significant amount of money is transferred from the foreclosure fund to the county’s general fund each year. (see here and here). In addition, when the Land Bank sells a property that it acquired from the county, 50% of the property taxes collected from that property are sent to the Land Bank for the next five years, further depriving the county and local governments of revenue.

Furthermore, last year the Land Bank was able to acquire properties for only the amount of taxes owed. Our previous work, using the County’s and Land Bank’s own documents, showed that the process in 2012 deprived the County of at least $1 million in revenue, which will need to be made up in other ways, either through cuts or higher taxes.

The changes to the process approved by the County Commission are an improvement. The process has been modified to move the decision on which properties the Land Bank may acquire from the County Commission to local cities and townships. This creates an additional step and allows local governments to weigh the pros and cons of each property transfer. Further, the Land Bank will otherwise be required to bid at the public auction for properties, which improves the process, but now creates a situation with the Land Bank’s public funds will be used to bid against private buyers. In other words, taxpayer money will be used against them.

We stand by the fact that the Land Bank is a solution in search of a problem. It was designed to reduce blight, yet it clearly has stepped way beyond those bounds. There is no significant problem to address that couldn’t be handled in other ways, such as through existing non-profit organizations. While the Land Bank justifies its purchases by claiming that there are quite a few properties that sell at the public auction but then revert back to foreclosed status, the statistics show that only four such homes (0.5%) were re-foreclosed between 2010 and 2012 out of a total of 734 foreclosed properties. The remaining 27 properties that were re-foreclosed were vacant land properties. It isn’t a problem that requires a new County-run bureaucracy that has a significant negative effect on the County’s budget. (See county-provided documentation of re-foreclosures here). It’s important to also note that none of these re-foreclosed properties were requested by the Kent County Land Bank last year.

The Land Bank should be limited to only handling truly blighted properties, not purchasing properties at a distorted, below-market rate solely for the purpose of funding itself. While KCTA supports the recent change, a better next step would be to limit the Land Bank’s mission to addressing problem properties that do not sell at any of the public auctions.

Permanent link to this article: http://www.kentcountytaxpayers.org/kent-county-land-bank-changes-are-a-step-in-the-right-direction/

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