Last week, The League sent Governor Granholm a letter requesting that she veto SB 77, which was passed late Thursday night of the lame duck session. The bill was substituted late in the process and would specify that homes going through foreclosure that are owned by banks and lending institutions can maintain the principal residence exemption (the 18 mills of local school tax). Proponents of the bill say that it will assist in getting these homes into the hands of buyers more easily since they won't have such high tax bills upon purchasing the homes. However, in a bid to make sure the state isn't on the hook for the reductions in local school funding, the legislature wrote the bill so that the institutions have to pay a PILOT in the amount of the taxes that would be lost, creating a wave of administration problems for local treasurers. The bills has numerous technical problems. And, more importantly sets a precedent for the State to capture part of the local tax administration fee, as the bill stipulates that the State gets 1/2 of the administration fee on these parcels.
Summer Minnick is the Director of State Affiars for the League. She can be reached at sminnick@mml.org or (517) 908-0301.
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