Michigan House passes bill package that would eliminate property taxes
The Michigan House passed an eight-bill package that would slash property taxes across the state.
The bill package would eliminate the 6-mill tax, the 0.75% real estate transfer tax, and the pop-up tax — that's the charge after a house transfers from one owner to another. It also has provisions to lower energy costs and freeze rate hikes from utilities like Consumers Energy and DTE.
"The property tax reform package removes the state property tax, so some people think that removes property taxes altogether. I think you just think that when you hear that, but it's actually removing the 6 mills tax that the state charges on property taxes," said state Rep. Jamie Thompson, R-Brownstown Township.
"With the property taxes and the energy package, the average homeowner is going to save about $1400 a year."
But Democrats argue that those individual savings pale in comparison to the loss in state revenue typically gathered by these taxes.
"I'm all for lowering property taxes; however, we have to do it in the most responsible way, and this what the Republicans proposed is not responsible," state Rep Donavan McKinney. "Now, when you lower property taxes, you're going to impact other funding mechanisms-- for our roads, for our infrastructure, for our schools, they're going to be disproportionately impacted by this legislation, whether our republican colleagues know it or not."
The House still needs to consider a companion bill that would impose a tax on luxury goods to replace some of that lost revenue. But that bill is still in committee as of Thursday afternoon.
CBS News Detroit took a look at estimates from the House Fiscal Agency, a nonpartisan agency within the state House of Representatives, which estimates a $2 billion revenue loss over the next 10 years if this bill package passes.
"If we make these property tax cuts more and more people are going to feel the impact by that there will be more harm than good, I do believe," said McKinney.
The bill package has yet another hurdle before it reaches the Governor. The democratically led Senate would need to come to an agreement and pass it before all is said and done.
