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Old October 4th, 2010, 09:50 AM   #1
3stratman
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Default Livonia: Pay us to collect your taxes!

Livonia is pondering charging a 1% fee to collect taxes from its citizens.

http://www.freep.com/article/2010100...1-fee-on-taxes



Livonia might charge its residents a 1% administrative fee to collect their property taxes, beginning with the December tax bill.

The city is considering the fee as part of efforts to deal with a substantial drop in revenue expected in its proposed $48.4-million budget for the next fiscal year. The council is holding a public hearing tonight, and is expected to vote on the proposed budget, which includes the fee, Oct. 20.

If the council chooses to charge its residents to collect, process and distribute their taxes -- an option permitted by state law -- Livonia would not be alone. Terry Stanton, spokesman for the Michigan Treasury Department, said more than three-quarters of the 1,800 tax-collecting units in the state charge the administrative fee.

Livonia Mayor Jack Kirksey said the city's financial difficulties make the fee necessary. Without it, the city, which has been steadily reducing personnel through attrition, would have to consider making personnel cuts beyond the 7% called for in the budget. The proposed budget calls for layoffs in various departments of three part-time and eight full-time positions, including two police officers and three civilian positions in the Police Department.

"I reluctantly agreed to support it," Kirksey said, adding that most taxpayers will see an average $285 reduction in their property tax bills -- even with the new fee -- because of declining values. "It's a situation where if we didn't do it, the only other way we could turn would be a reduction in the workforce."

The fee, estimated to cost the average taxpayer about $25, is projected to generate about $1.8 million. That revenue would be offset somewhat because Livonia would no longer charge the public schools and Schoolcraft College $434,000 to collect their taxes.

Although described as a fee, some experts disagree over the terminology.

"It's essentially just a property tax increase," said Mark Skidmore, a professor of economics at Michigan State University. He said the fee could be justified because it does cost the city money to collect and distribute taxes.

Anthony Minghine, associate executive director and chief operating officer of the Michigan Municipal League, said charging residents for tax collection makes sense because the fee pays for a service.

"I wouldn't characterize them as taxes, and I wouldn't characterize them as inappropriate," he said.

Is this shit ever going to end???
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Old October 4th, 2010, 10:03 AM   #2
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Thanks. I just doomed my co-worker with this!
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Old October 4th, 2010, 04:10 PM   #3
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So even your taxes are taxed. Great.
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Old October 5th, 2010, 12:33 PM   #4
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many communities in Michigan have charged administrative fees for years.

fun fact, the vast majority of local property taxes collected do not go to the local community, they are passed to the varying school districts, State Education Trust, and County Government.

the channeling, managing, and investing of those funds takes a toll on local Government resources - especially when most constituents vote 'no' on funding local Government unless it's public safety holding a proverbial gun to their head.

here's something else to think about.

have any idea what the palace of auburn hills is worth? have any idea what it cost to build? those two numbers are very widely spread. have any idea on what the property taxes are actually calculated on?

have any idea how much money it costs to hire an expert appraiser to evaluate said property, and/or then hire an attorney to litigate the property tax appeal against the likes of Michael Shapiro in the Michigan Tax Tribunal?

In case you didn't know, Mr. Shapiro and his group's services are the single largest revenue generator for the firm Honigman, Miller, Schwartz and Cohn.

When he comes to town he will "prove" that large/complex facilities that literally have hundreds of millions invested in infrastructure are worth hundreds of thousands of dollars and thus should be taxed on that lower amount.

he often wins, or at least gets consent judgments that split the difference - in part because there's no funding for property tax administration because people would rather vote for public safety millage and want property tax assessments and collections to be done on shoe-string budgets
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Old October 5th, 2010, 02:53 PM   #5
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Quote:
Originally Posted by RyeBread View Post
many communities in Michigan have charged administrative fees for years.

fun fact, the vast majority of local property taxes collected do not go to the local community, they are passed to the varying school districts, State Education Trust, and County Government.

the channeling, managing, and investing of those funds takes a toll on local Government resources - especially when most constituents vote 'no' on funding local Government unless it's public safety holding a proverbial gun to their head.

here's something else to think about.

have any idea what the palace of auburn hills is worth? have any idea what it cost to build? those two numbers are very widely spread. have any idea on what the property taxes are actually calculated on?

have any idea how much money it costs to hire an expert appraiser to evaluate said property, and/or then hire an attorney to litigate the property tax appeal against the likes of Michael Shapiro in the Michigan Tax Tribunal?

In case you didn't know, Mr. Shapiro and his group's services are the single largest revenue generator for the firm Honigman, Miller, Schwartz and Cohn.

When he comes to town he will "prove" that large/complex facilities that literally have hundreds of millions invested in infrastructure are worth hundreds of thousands of dollars and thus should be taxed on that lower amount.

he often wins, or at least gets consent judgments that split the difference - in part because there's no funding for property tax administration because people would rather vote for public safety millage and want property tax assessments and collections to be done on shoe-string budgets
You should be in politics. You did an awesome job of claiming “facts” while not actually giving any specific information or citing sources of information. And asking loaded questions without providing actual answers, classic campaign tactic.
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Old October 5th, 2010, 03:10 PM   #6
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the fun fact statement is a fact. look at any property tax bill in Michigan. it breaks down the property tax allocations/millages (you may not recognize a school district as separate from your local community but in fact they are not one and the same). Feel free to use your own property tax bill as my citation. now, notice the paragraphs after that statement - while they are also true in general terms they're not part of that "fun fact" statement - they were meant to make the reader pause, and consider those costs. imagine them for a moment. ask yourself if you have any idea whatsoever of their relevance.

now - you can look up the 50 page decision on the palace of auburn hills tax appeal at the michigan tax tribunal website's here: http://www.dleg.state.mi.us/ham/tax/sr_recdec.asp

total reconstruction cost of the facility after the various additions net out to over $120M - not counting the value of the land.

the 2003 value was litigated down to less than $40M true cash. (also in the final opinion you can find above) after reading that gem, do another search, and look for the old case on rouge steel - it's the case that put Shapiro on the map.

MAI Appraisers charge $10k-25k for a financing appraisal of a medium sized grocery center or REIT type of property. they charge quite a bit more for specialized properties that take nationwide research, and/or involve lengthy litigation. your mileage may vary on this on, but Mr. Tomlinson, the MAI for Honigman is listed in the yellow pages, see if he'll quote you his fee for that case over the phone.

on the witness list for Shapiro was a graduate level professor at Brigham Young... calling and paying for that level of expert witness testimony is also not cheap. I'll concede that I have no idea how expensive this is.

the city of auburn hills used secrest wardle as their attorneys - I don't know off hand how many days were spent at trial, or preparing prehearing briefs, hearing preparation, respondent briefs, and motions but I would submit that it's a shiton, at roughly $250/hour... this, for just one significant property tax appeal.

the Michigan Tax Tribunal has tens of thousands of cases pending across the State.

perhaps we should just do away with property taxes - after all the local community rarely if ever gets any help from the other parties (schools, state, county) to the case when it comes to defending the assessments - yet they willingly rake in that money after the summer and winter tax bills...

you may still think it's a classic campaign tactic, I prefer that people actually do a little thinking on the subject instead of spoon feeding.

Last edited by RyeBread; October 5th, 2010 at 03:23 PM.
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Old October 5th, 2010, 03:19 PM   #7
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why not. they tax the tax on fuel all the time.
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Old October 5th, 2010, 03:23 PM   #8
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Originally Posted by ovrlnd View Post
why not. they tax the tax on fuel all the time.
And you pay for it with taxed money.
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Old October 5th, 2010, 03:34 PM   #9
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Oakland County's Apportionment of Local Tax Rates:
http://www.oakgov.com/equal/assets/d...009TaxAppt.pdf

Cities traditionally have a much higher millage rate than townships due to their requirements to maintain public streets, and typically to have DPW's for servicing water/sewer

Page 17 out of 34 in the .pdf covers Auburn Hills. Or page 11 of the printed copy

total non homestead millage is on average in the low 50s - of that amount, 10½ mills is allocated to local city government.

as I stated, the majority of property taxes go towards other allocations than local government.

so, for each $1,000,000 in Taxable Value that is at risk/reduced due to litigation the city budget has $10,520 at risk whereas the total property tax bill at risk/reduced is ~$52,000 (a property tax mill = $1 per thousand of Taxable Value. Taxable Value can not exceed SEV, which is intended to represent 50% of True Cash Value) of the total city budget, most often public safety, code enforcement, and the like see the lion's share of budgetary allocations rather than the assessor or treasurer's office.

due to the huge case load pending at the Michigan Tax Tribunal - most full/entire tribunal cases have 3-6 years at issue in one trial. any favorable judgment for a petitioner includes a pretty decent interest allocation on top of the tax savings.

now perhaps you can see why it would be profitable to appeal those complex / high valued properties and for a local community to simply roll over when the majority of tax dollars at risk are not their own...

Last edited by RyeBread; October 5th, 2010 at 03:37 PM.
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Old October 5th, 2010, 11:05 PM   #10
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forgot about this.

the 1% administrative fee is so common or prevailing in Michigan that the State Tax Commission, by default includes it in their online property tax calculator/estimator.

https://treas-secure.state.mi.us/pte...testimator.asp
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Old October 6th, 2010, 09:03 AM   #11
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Livonia has been swirling the drain for a few years now should this be any surprise?

As we all know Livonia borders some less than desirable areas, which harbor many less than desirable people. When I started dating Kerry Ann a car full of said undesirables couldn't step foot past Inkster without getting pulled for by like 5 police cars. Right, wrong, racial profiling or whatever thats how it was and we never had any issues with crime. A few years later with lower property values, less taxes, less police, etc... it was a whole different story. One night we came home to find a few of these undesirables lurking around our Grand National sitting in the driveway. We called the police...no one ever showed up, drove down the streets, nothing. That was when we decided it was time to leave.
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