University of Michigan Gateway Ford School

Property Tax Rates in Detroit: A Michigan Public Policy Recommendation

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April 2017

Ronald Everett

Abstract

On September 9th, 2016, the U.S. Census Bureau released a report outlining state government tax collection by category.1 Michigan ranked top ten out of all fifty states in the category of property tax rates. In addition, Michigan’s “lost decade” has been best characterized by the state’s marked loss in population starting in the early-mid 2000s and continuing until just a couple years ago. The decline in Michigan’s resident population came as a result of several
precipitous factors, such as economic hardship in the manufacturing, automotive, and construction industries. As a result, areas in the state heavily dependent on these industries — namely, Southeast Michigan — suffered debilitating blows to their job markets and overall economies. Many residents were forced to relocate to neighboring states or counties that offered more economic opportunity and lower costs of living. While Detroit’s tax structure may not be
the cause of population decline in the city, it may very well perpetuate issues caused by the overall economic decline of the city. Detroit should adopt a new tax policy centered on lower property taxes for the purpose of attracting more residents and businesses to the city, building up the tax base, and creating a business environment conducive to job creation.

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