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Clinton Township, Macomb Township

Property taxes for Chippewa district residents to increase in 2014

January 23, 2013

CLINTON TOWNSHIP — It’s a done deal. Beginning in 2014, residents living in the Chippewa Valley Schools district will see property taxes increase to pay the $143 million debt the district owes the state on time.

CVS is one of 60 school districts statewide affected by a series of bills Gov. Rick Snyder signed in to law just days before the end of 2012.

The laws alter the 50-year-old School Bond Qualification and Loan Program, which allows school districts to borrow money from a state-set-up revolving fund to pay for capital-improvement projects. Because several school districts, like CVS, have borrowed from the fund without paying it back, the fund is running a $1.4 billion deficit that continually grows ever year. Last year, the state Legislature had to allocate $120 million from the school-aid fund to keep the revolving fund solvent.

School districts like CVS were able to continually borrow from the state because the bond program only required the district raise at least 7 mills from local taxpayers toward debt in order to partake in the program. CVS currently assesses 7.65 debt mills on property owners.

With the changes to the bond program, CVS is required to raise the debt millage on local taxpayers until the district brings in enough money annually to pay off its debt by 2040, the year CVS is mandated to do so.

Superintendent Ronald Roberts said CVS is waiting to fully understand the new law before communicating the changes with its residents.

“We’re not quite sure yet of the timeline for implementation, nor what it means for the debt-millage rate,” Roberts said.

But based on the Treasury Department’s assessment of the changes to the bond program, residents owning property in CVS will pay more initially in the summer of 2014 — the season in which the district collects all of its taxes. The increase will be gradual that first year and will be based on a formula that incorporates the rise or decline of the taxable property values in the district between 2008 and 2012. That summer, residents will pay about $150 more in property taxes for a home valued at $100,000, based on a C and G News assessment into the district’s taxable property values.

The values for 2013 alone will determine the millage increase in 2015. If the taxable property values in CVS continue to drop in 2013, the millage rate again will only gradually climb. If the values increase even slightly this year, the millage will jump to whatever is necessary to refund the bond program by 2040.

While Brian Parthum, senior planning analyst from Southeast Michigan Council of Governments, does not analyze the taxable property values of individual school districts and communities, he does not expect taxable values to increase again in metro Detroit until 2015. This means that, if Clinton and Macomb townships keep with the trend of the rest of the region, the millage will gradually increase for the next three years. But if the two townships are ahead of its peers and taxable property values actually increase in 2013, the debt millage will jump to just about 10 mills in 2015.

And there are signs that the two communities that make up CVS are, in fact, bucking the trend.

“Both are starting to look healthier, as far new single-family permits,” Parthum said.

Developers in Clinton and Macomb are constructing new homes at their highest rates since 2006.

“But it’s still less than half of what they were building in the early 2000s,” Parthum said. Additionally, even if property values increased, it won’t translate to increased taxable values immediately. Parthum explained that, because the state constitution only allows taxable values to rise at the rate of inflation, taxable property values rise slower than their actual market value.

Regardless of when or how high taxes will jump, Roberts said the weight of the solution is falling on the wrong people.

“Look at some things that were resolved when the economy tanked; it wasn’t always resolved by saying to the taxpayers, ‘Well, you’re going to have to fork over more money to cover this,’” Roberts said. “There was a lot of debt out in our society that was handled in a different way.”

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