The “Taxman.” The very word has long carried with it negative connotations. Today, the “Taxman” is the one who decides what we pay to our local government, the county, and the State in property taxes.
In Michigan, the role of the “Taxman” is performed by the local Assessor. At the county level, an Equalization Division takes the Assessor’s information and “equalizes” it by adding to, or deducting from, the assessed value of each class of property in each assessing jurisdiction. In this way, all communities are using a common levelof valuation everywhere in the county, based on sampling data, housing reports, and a variety of statistics on property valuations. The Equalization Divisions of each Michigan County are responsible for ensuring fair and equitable property taxation for all taxpayers – a critical public service role for our citizens.
The point of this Insight article is to explain how, as the title implies, our Equalization Division is helping to reduce the tax burden on Oakland County citizens. First, a little legal background: the Michigan General Property Tax Act (MCL 211.34(3)) allows County Equalization Divisions to assist local assessing officers in performing real and personal property appraisals and assessments for the purpose of levying State and local property taxes. And that’s just what we've done. Since I've been County Executive, my Equalization Division has leveraged its staff and assets to provide assessing services to cities, villages, and townships (CVTs) across the county at a fraction of the cost they’d have incurred had they continued providing those services themselves. In fact, depending on the size of the CVT and the extent of the services provided by the County, contracted communities are saving – or avoiding – anywhere from 30 to 60% of the costs they’d normally have expended.
In the past, CVTs performing their own assessing services hired their own staff, paid salaries and benefits, contributed to retirement funds, purchased cars or reimbursed staff for travel expenses, implemented and maintained computer systems, leased office space and furniture, supported complex paper and computerized record keeping systems, and hired third-party auditors. To understand the impact of the Michigan General Property Tax Act, suppose that two CVTs shared all of these assets and systems, splitting the costs between them. Now, imagine three-dozen CVTs sharing the County’s assets and systems, enjoying the economies of scalepossible by intergovernmental cooperation – and that's how many contracts we have in place today!
Why, just since 1999 a dozen new contracts between the County and our CVTs have been initiated – contracts bringing in revenues to the County of $600,000. And yet this is but a fraction of what the combined cost to all the CVTs would have been had they continued to provide assessing services to their property owners locally. Over that same time span, the Equalization Division eliminated nine full time eligible Equalization Division positions and restricted staff overtime, reducing annual expenditures by $650,000 in perpetuity. What’s more, the Division has leveraged information technology to enhance standardization, ease reporting, foster the equalization process, and provide access for each contracted CVT to a single, common database of information. The database – created and maintained by the County using a widely installed, well-respected software system – is accessible by the CVTs over our OakNet System, a countywide fiber optic network linking every municipal and County facility together electronically.
So, here's the bottomline: once the contracts with Equalization are in place, each CVT is then free to reallocate or sell off their assets, then realign or reduce their work force proportionately. This, in turn, reduces the CVTs' budgets, thereby reducing the burden on taxpayers. In effect, the “Taxman” has saved taxes! It's a “win” for citizens, businesses, the communities, and the County.
It's important to keep in mind that this is only possible through the coordinated, proactive efforts of both the County and the administration of the CVTs who participate. This is an excellent example of how communities working together can save taxpayers money. The leaders of the communities shown below in Exhibit 1 deserve praise for their foresight and fiscal prudence. It's their leadership and the ingenuity of individuals like Dave Hieber, our Oakland County Equalization Division manager, and his staff that continue to make Oakland County the best place to live and work in Michigan.
Exhibit 1: Assessing Contract as of September 15, 2005
Novi
Novi Township
Oakland Township
Orchard Lake
Oxford
Pleasant Ridge
Pontiac
Rochester
Royal Oak
Royal Oak Township
South Lyon
Southfield
Southfield Township
Springfield Township
Sylvan Lake
Wixom
Walled Lake
West Bloomfield Township
The “Taxman.” The very word has long carried with it negative connotations. Today, the “Taxman” is the one who decides what we pay to our local government, the county, and the State in property taxes.