DETROIT BUSINESS MAIN 04-02-07 a 9 CDB.Qxd
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DETROIT BUSINESS MAIN 04-02-07 A 9 CDB 3/29/2007 1:57 PM Page 1 April 2, 2007 CRAIN’S DETROIT BUSINESS Page 9 OTHER VOICES: How to fix the property-tax pop-up mess There is no doubt that the Proposal A, the taxable tent of Proposal A, how do we fix low-market rates will increase to sult in an average tax savings of 30 lackluster Michigan econo- value of all existing this mess? The answer is surpris- the average and homes that have percent to the new home buyer with my has had a negative effect homes, and hence each ingly simple and significantly fair- been taxed at higher rates will ex- no decrease in funds available to on home values in Michi- home’s tax bill, is already er. It is also revenue-neutral and perience a decrease to the average. the city, county or state. gan. But what about the adjusted for inflation in maintains the current cap for If you choose not to sell your home, This method is fair to both buy- pop-up tax — how has that the same manner, the ex- those who chose not to move. you will continue to enjoy the ben- ers and seller. It continues to pro- affected house prices? tra taxes collected on the Because property values appre- efits of an inflation-rate cap on tect existing home owners. Over Homes, like cars, are homes that changed own- ciate at different rates in different your taxable value. time, it brings everyone toward the now purchased based upon ership create an excess. areas, each community has a dif- This ratio is simple to calculate middle, rather than polarizing tax monthly payment, not total The Headlee Amendment ferent ratio of total taxable value to and would be available from your bills at the high and low ends. It price. When a buyer meets requires the municipality total State Equalized Value. Rather assessor. The ratio of TXV to SEV does not discourage home sales. It with a mortgage lender, Michael LeVan to eliminate the excess by than bring all sold properties up to in Grosse Pointe Park last year, for will actually raise transfer-tax rev- they determine what the rolling back its overall the maximum ratio of 100 percent example, was 70.1 percent. Thus, if enues to the county and state by re- buyer can spend per month on millage rate. Thus, the large extra of SEV, the objective should be to you purchased a new house there energizing the real estate market. housing expenses — principal, in- taxes paid by a few new home own- bring everyone to the average ratio last year, your taxable value would And, last, it is revenue-neutral. terest, taxes and insurance. The to- ers effectively create tiny rebates of all sales in that community that be set at 70.1 percent of the current Michael LeVan is a Realtor with tal loan amount, and hence the for all of the other property owners. year. Thus at the time of sale, SEV rather than 100 percent as is Adlhoch & Associates in Grosse purchase price that they can pay, Since this was clearly not the in- homes that have been taxed at be- currently the case. This would re- Pointe Woods. is merely a byproduct of the inter- est rate and the monthly payment that they can afford. Because real estate taxes are a component of that monthly payment, any in- crease in taxes reduces the amount available to pay interest and prin- cipal. This reduction in the amount available for the mortgage BUSINESS CHECKING. payment means a smaller loan amount, which in turn reduces the amount that a buyer can pay for a NOW with MORE FREE. home. A $300 monthly tax increase reduces a buyer’s purchasing pow- er by $50,000. That means buyers get less house for the money and •Free online banking sellers get less for their homes. Where does all of that extra tax money go? From the government’s •Free online bill payment point of view, the answer is nowhere. For a new home owner, the pop-up tax will subtract thou- • Free unlimited QuickBooks® sessions sands of extra dollars from your wallet, but won’t add a penny to the budgets of your city, county or • Free enrollment in points from National City®, state. With the small exception of a few extra dollars to the Michigan where checks you write, CheckCard transactions, Education Fund, the rest of those online bill payments and more, will earn you dollars are “washed away.” In fact, your hefty tax increase actually valuable rewards. And, earn rewards faster acts as a subsidy to lower the in- by combining points earned on business and creases of your neighbors’ taxes. While this was certainly not the personal accounts. intent of the Legislature, it is a fact in scores of Michigan communities whose tax revenues are capped by Put one of our Business Checking accounts the Headlee Amendment. to work for you. The Headlee Amendment re- quires that a municipality’s total tax revenues from existing proper- To sign up, stop by any branch, ties may only increase at a rate 1-888-NCB-4BIZ (622-4249) equal to the increase in the Con- call , sumer Price Index. Since under or visit NationalCity.com. LETTERS CONTINUED ■ From Page 8 orado company to provide new- hire employee-reporting services. They were chosen even though a Michigan company, who is the proven subcontractor in the cur- rent new-hire contract, offered a price fully 35 percent less. The state didn’t even try to broker a so- lution to keep this work here. Sure, it’s only five jobs and the tax revenue and profits that could be kept inside our state aren’t huge numbers, but it portrays an atti- tude. Michigan needs to have confi- dence in and stand behind its tal- ented workforce by beginning to award state contracts to local com- BUSINESS BANKING • PERSONAL BANKING panies. If Michigan doesn’t try to keep the business it has, how does INVESTMENTS • MORTGAGE LOANS it expect to attract new business? Joan Duguay President QuickBooks is a registered trademark of Intuit Inc. in the United States and other countries. National City does not supply QuickBooks software. You may use any version Data Direction Inc. of QuickBooks that is currently supported by Intuit. Online bill payment is free for new enrollees after 3/25/07. Points from National City is a National City Corporation® Southfield registered service mark. Member FDIC • ©2007, National City Corporation® DETROIT BUSINESS MAIN 04-02-07 A 10 CDB 3/29/2007 3:40 PM Page 1 Page 10 CRAIN’S DETROIT BUSINESS April 2, 2007 BRIEFLY NAWBO honors 11 women Riverfront festival starts June 22 otherwise offer a music programs 2 Ann Arbor firms get funding business school includes courses to offer one. in leadership theory and practice, The National Association of A six-day festival on Detroit’s — Sherri Begin from Pre-Seed Capital Fund strategic thinking, communica- Women Business Owners Greater De- riverfront is scheduled for late Two Southeast Michigan compa- tion, ethics, and team and organi- troit Chapter honored 11 women June, to be highlighted on its final nies have received funding from zational leadership. March 15 at its annual awards lun- night by the 49th annual Target Royal Oak Ford workers ask the Michigan Pre-Seed Capital Fund. The program consists of 12 to 13 cheon. They were: Fireworks on June 27. to decertify UAW local Pixel Velocity of Ann Arbor, courses totaling 36 to 39 credits. Ⅲ Marian Ilitch, Ilitch Holdings, Detroit International River which makes smart cameras for Admission requirements and a Detroit, Pinnacle Award. Days, organized by the Detroit Employees at Royal Oak Ford the security and surveillance and list of core classes are available at Ⅲ Ronia Kruse, OpTech L.L.C., De- Riverfront Conservancy, The Parade have filed a petition with the Na- medical-imaging markets, re- www.walshcollege.edu/pages/866. troit, Diversity Champion Award. Co. and General Motors Corp., will tional Labor Relations Board to decer- ceived $250,000, which was asp. Ⅲ Lizabeth Ardisana, ASG Re- start June 22 and will help inaugu- tify United Auto Workers Local 228 as matched by $250,000 in funding Applications can be made online naissance, Dearborn, Rainmaker rate the new RiverWalk. the bargaining representative for from individual angel investors. at www.walshcollege.edu/pages/ Free entertainment including the dealership’s service workers. Award. OTO Medicine of Ann Arbor, 105.asp, or in-person on any Walsh Ⅲ live music, exhibitions, games and About 35 employees are repre- Anne Doyle, Anne Doyle Strate- which makes medicines to reduce campus during “Walk-in Wednes- carnival events will be featured sented under the bargaining unit, gies for Leaders, Auburn Hills, noise-induced hearing loss re- days” from 8:30 a.m. to 7 p.m. Breakthrough Award. from the Gabriel Richard Plaza & which includes technicians, ser- For more information, call (800) vice and parts workers, body shop ceived $107,000, which was Ⅲ Elizabeth Blondy, Canine to Pavilion near the RiverWalk’s east 925-7401 or (248) 823-1610. personnel and porters. matched by a U.S. Small Business Five/Detroit Dog Daycare, Detroit, end to the GM Plaza & Promenade — Joanne Scharich The NLRB is reviewing the peti- Innovation Research grant of Up and Coming Award. and beyond. tion and is expected to decide $107,000. Ⅲ Karen Smith Kienbaum, — Robert Ankeny whether to allow a decertification Ann Arbor Spark, a business-sup- Group increases reward for Karen Smith Kienbaum & Associates, vote within the next few weeks, port and incubator nonprofit orga- Detroit, Words of Wisdom Award.