Michigan House Speaker proposes eliminating state property tax

Property taxes are an issue that could show up on the ballot this year, as lawmakers are discussing it.

House Speaker Matt Hall says he would consider eliminating them and gathering funding elsewhere, all while the state is facing a billion-dollar budget deficit. Hall announced plans last week to overhaul taxes in the state, saying that doing so will make life more affordable. 

To replace that revenue, Speaker Hall pitched a 6% sales tax on luxury services like limousines, artificial intelligence services, performing arts, newspaper publishing and political ads, among others.   

"You're hearing people when they sell their homes, their taxes go up two or three times. This is a big issue in Detroit, it's a big issue across the state," said Hall. 

The property taxes currently fund a lot of local services, such as public schools, road maintenance, local fire and police departments, among others. But Hall wants to eliminate Michigan's personal property taxes, the state education tax and a real estate transfer tax. 

"Those taxes fund things that we all rely on. They fund our parks, they fund our libraries, our schools and without that, there's disruptive cuts," said Tom Dillon, an attorney with Foster Swift, which specializes in state and local tax work. 

Dillon says that without that revenue, the money would need to come from somewhere else or we could see major cuts. 

"There's going to be probably a big difference in how libraries operate, for example. "You'll see cuts to schools, you'll see really all kinds of different impacts for everyone in your community," said Dillon.