Michigan Votes Forum

Introduced in the House on March 8, 2007, to authorize a temporary moratorium on the Proposal A taxable value “pop-up” for property that is sold as a homestead (principle residence), from March 1, 2007 to Sept. 1, 2008. Buyers during that period would get the same taxable value as the seller. The “pop-up” is where the state equalized value (market value) of newly-sold property becomes the basis for its property tax assessment, rather than the capped “taxable value” of the previous owner, which is lower (as long as property values have risen since the last sale.) The bill is tie barred to HB 4441 (each will only become law if the other does), which temporarily raises the real estate transfer tax from .75 percent to .85 percent, and gives the additional revenue to the local government

The vote was 77 in favor, 31 opposed and 2 not voting

(House Roll Call 43 at House Journal 25)

Click here to view bill details.

Here is another band-aid that indicates there are a lot of prople in Lansing that know Proposal A is messed up. I like the part about temporarily raising the transfer tax to compensate for the poor real estate market. If I could sell my house I would go south like most of our college grads are doing. Granholm sucks.

The largest tax collector in the state is the State Education fund. If this freeze goes through, the largest loser will be the education fund. Since that is an untouchable sacred cow, what tax will be raised to make up for the loss? I hate term limits! We keep sending folks to Lansing who have no clue how the state budget works, how local budget works, how the economy works.

HR 4442 There are two things to consider when assessing the 18 month exemption to the removal of the cap when property is transferred. The first is the taxable value itself, the cap which will not be removed for 18 months, and the second is revenue. Under the Headlee amendment revenue can not increase more than the rate of inflation plus additions and deletions. If the pop up does not occur, any revenue that would have been generated as a result of the removal of the cap must now be absorbed by all taxpayers through less rollback in the millage rate or none at all if the volume is significant. While I am certain that this might increase the sale of homes, it could conceivably make future obligations of the purchaser more questionable. As people assess their obligation, they may assume that they are able to afford a house they otherwise would not be able to afford. With temporary lower payments, they may pay more for a house. When the cap is removed their payments for school taxes will raise substantially. The higher price for the home could raise inflation and assessments both taxable and SEV. There are a series of complications with the Constitution and the enabling legislation for Proposal A that trouble me. As I see it , this is another attack on the Headlee Amendment.

"If this freeze goes through, the largest loser will be the education fund." Lets try to get you some knowledge you missed in the public school system. Nobody "loses" they just don't gain quite as quickly. It's like the dems favorite...you propose 100 million in new taxes then you only get 50 million. In the dem/socialist handbook this means that they got you a tax cut. Fuzzy math for stupid sheeple is their speciality. Like two penny jennys new service tax..they dub it "two pennies" but foget to tell you that it is a %200 percent increase over what we have now.

Two times.

Whom is going to these great schools that you are so concerned with? Last I checked, our population decreased not increased. Let me ask you a question...There's this great school district in michigan that is rated in the top 5 according to newsweek, and you want your dingbat son to go there cause he's well "special" right, ok great, only one catch.. you're going to look for a job for the first 8 months after you move and again in 8 months after your job makes cutbacks. get ur head right man - education doesn't mean anything unless we have jobs

Rep. Hoogendyk, having reserved the right to explain his protest against the passage of the bill, made the following statement: "Mr. Speaker and members of the House: The state needs sound policies that allow for a fair system of taxation, policies that promote job growth and capital investment. This bill, although well intended, does neither. This bill is nothing more than a short term fix, a gimmick. If we were serious about tax relief for homeowners we would vote to cut property taxes for all homeowners. I offered such amendment to cut assessments by 10%, but was unable to amend the bill on a record roll call vote. I will continue to look for ways to provide homeowners in Michigan true and permanent property tax relief."

Rep. Sheen, having reserved the right to explain his protest against the passage of the bill, made the following statement: "Mr. Speaker and members of the House: No Vote Explanation on HBs 4440 - 4441 - 4442 The people of the state of Michigan voted by referendum to make Headly and Proposal A apart of the Michigan Constitution. I do not believe the legislature should arbitrarily change these constitutional enactments. If this was put in place by a vote of the people, then it should be changed by a vote of the people, not the legislature."

Rep. Elsenheimer, having reserved the right to explain his protest against the passage of the bill, made the following statement: "Mr. Speaker and members of the House: I support 4440's intent to stimulate the real estate market. However, with the failure of the amendments, we have a situation where some houses will move for an 18 month period. Afterwards, since most houses will be sold to residents of this state (unfortunately, people are not moving to Michigan -- movers report more people moving out than moving into this state) who are putting another house on the market to move into a home pursuant to this statute, we are simply moving the problem from this date to a date 18 months into the future. This bill is gambling that the economy of this state will improve of its own accord in the next 18 months. It is government by gimmickry. Like most gimmicks, this bill may have unintended consequences, such as the reduction in new homes being built. Let's avoid the gimmicks and do the real work of this legislature. We should be addressing the economy in whole, not nibbling around the edges of the economy. Enough 'tweaking.' Let's get to work."

Rep. Schuitmaker, having reserved the right to explain her protest against the passage of the bill, made the following statement: "Mr. Speaker and members of the House: I support 4440's intent to stimulate the real estate market. However, with the failure of the amendments, we have a situation where some houses will move for an 18 month period. Afterwards, since most houses will be sold to residents of this state (unfortunately, people are not moving to Michigan -- movers report more people moving out than moving into this state) who are putting another house on the market to move into a home pursuant to this statute, we are simply moving the problem from this date to a date 18 months into the future. This bill is gambling that the economy of this state will improve of its own accord in the next 18 months. It is government by gimmickry. Like most gimmicks, this bill may have unintended consequences, such as the reduction in new homes being built. Let's avoid the gimmicks and do the real work of this legislature. We should be addressing the economy in whole, not nibbling around the edges of the economy. "

If you read the "Other Voices" article in the April 2-8, 2007 Crain's Detroit Business by Michael Levan (page 9), assuming he is correct, there will be no decrease in tax to make up for. According to Levan, as the tax collections increase due to the pop-up, the millages go down so it is all budget neutral. Even more reason that Proposal A needs to be fixed. Not only do the new home owners have to pay substantially higher taxes, but they also subsidize the home owners who don't sell. Levan seems to have a good idea in how to fix things. The article is a must read if you are interested in this stuff.

Either you or I have read the bill wrong. My reading of it tells me that if you buy during the 18 month period, it is like you are the previous owner. That is, after the 18 months, nothing happens. You prevent the pop-up for the entire time you own the house. What happens after the 18 month period only effects home purchasers after that. That is, if you buy a home after the 18 month period, then you get the pop-up. Am I wrong?

the transfer tax Stays Up Forever.