One issue I have been working on since I started at the League is the tax reduction loophole that was created due to a Supreme Court case, WPW Acquisition Company v. City of Troy.  After Proposal A created the term taxable value, the Legislature passed legislation that allowed for an increase and decrease of certain commercial property’s taxable value based on their occupancy. This was meant to allow the taxable value of income producing property to reflect the ebb and flow of the economy. Under that system, the City of Troy granted a reduction to WPW Acquisition Company due to a reduced occupancy. However, when the City increased their taxable value when they were more fully occupied, WPW Acquisition Company sued the City, claiming they could not increase their taxable value above 5% or the rate of inflation, whichever is less, due to Proposal A. The Supreme Court addressed the question of increases in occupancy and agreed with WPW. However, the reduction issue due to occupancy was never in question, so a legal loophole, creating tax inequity, was born.  

   The House of Representatives once again took up a bill to fix this today. HB 4456, which removes “occupancy”  from the definition of commercial property and is championed by Representative Vince Gregory (D-Southfield), passed the House with about 70 affirmative votes today (56 are needed for passage).  This bill is now, once again, on to the Senate.  I have heard second-hand that Oakland County Executive Brooks Patterson supports the bill and will push for it, and I am hopeful that this issue of inequality in our communities can finally be put to rest.  Contact your Senator and ask him/her to support HB 4456!

 

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