25LINKBUDGET(FULL) - Flipbook - Page 46
City of Plymouth 2024 / 2025 Budget
Property Taxes
Property taxes constitute the primary revenue stream for the General Fund, accounting for
approximately 65% of the total annual revenue. They also serve as the primary income source
for the Waste and Recycling Fund, two general obligation debt funds, the Downtown
Development Authority (DDA) Operating Fund, and the Brownfield Redevelopment Authority
(BRA) Operating Fund.
In Michigan, property taxes are governed by various state laws, with Public Act 206 of 1893, as
amended, serving as the primary legislation. These taxes apply to both real property—
encompassing residential, commercial, and industrial estates—and personal property,
including commercial, industrial, and utility assets.
In late 2012, the Michigan legislature passed a series of Public Acts aimed at phasing out
personal property taxes on commercial and industrial properties. Since the 2023 tax year, all
newly acquired personal properties with less than $180,000 in assets have been exempt from
such taxes. Most property taxes are ad-valorem, based on property value, however, the City has
also imposed Industrial Facilities Taxes (IFT), which are imposed in-lieu of normal property taxes
but are calculated similarly to ad-valorem taxes.
Additionally, the City administers taxes captured under the Downtown Development Authority
Act and the Brownfield Redevelopment Authority Act. Although collected as ad-valorem taxes,
these funds are designated for specific purposes outlined in the respective governing acts.
Property valuation and determination of valuation bases are overseen by local government
officials licensed by the State of Michigan, operating within the framework of state statutes. The
Assessing Office of the City is responsible for establishing the property tax base or valuation.
Each year, valuations are assessed for both real and personal property categories by the local
assessor or certified individuals contracted for this purpose. This process culminates in the
issuance of annual notices of assessment changes to all property owners in February. Property
owners have the opportunity to contest their assessments annually in March before the local
Board of Review. If dissatisfied with the board's decision, they can further appeal to the Michigan
Tax Tribunal by July 31 of the same year.
The total assessed and taxable values of the City undergo a review process known as
"equalization," conducted by the county in April and by the State Tax Commission in May. These
reviews establish the final property valuations for the tax year. The determination of the property
value base establishes the amount of revenue generated per mill levied, or, in simpler terms,
the amount of revenue generated per $1,000 of taxable value.
Through their budgeting processes, the county, various school systems, the library, and the City
utilize the approved taxable valuations to calculate the millage rate necessary for generating
revenue for operating expenses and debt service. Both the Headlee Amendment to the
constitution in 1978 and the Proposal “A” constitutional amendment in 1994 impose constraints
on the maximum millage that can be levied for operating purposes, determined by intricate
formulas tied to property valuation growth and cost-of-living formulas. The City of Plymouth has
operated at its maximum millage limitation since 1999. From the 2005 tax year to the 2014 tax
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