EAST LANSING, Mich. – The East Lansing Finance Department has received some inquiries from community members regarding increases in their winter tax bills, given that voters approved a property tax decrease alongside the new East Lansing income tax.
Community members should note, first and foremost, that the winter tax bills do not include any City of East Lansing-related taxes as all City millages are levied in the summer. Residents will see the voter-approved property tax millage reduction for the first time on their 2019 summer tax bills, which will be sent out next July. As approved by voters, the City’s general operating millage cannot exceed 13 mills in any year in which an income tax is levied and the East Lansing City Council passed a resolution committing to a larger reduction of a flat 5 mills. This means, in 2019, residents will see the City’s operating millage be reduced from 17.5362 mills to 12.5362 mills.
According to the East Lansing Finance Department, increases in some community member’s current winter tax bills can be attributed to an increase in millages for other taxing jurisdictions in the area and/or an increase in the taxable value of their home. Property taxes are determined by multiplying the taxable value of a home by the millage rates levied.
“A number of outside agencies that we collect for have had voter-approved millage increases over the past few years. This, combined with increases in taxable value due to the improving economy, are a big part of why winter tax bills are going up,” said East Lansing Finance Director Jill Feldpausch.
Millage Increases for Other Taxing Jurisdictions
The City of East Lansing serves as a collection agency for several other taxing jurisdictions in the area, meaning the City is told how much to levy, collects the taxes and redistributes what is collected to these jurisdictions. For Ingham County residents with a home in the East Lansing school district, the jurisdictions include Ingham County, the East Lansing Public Schools, the State Education Tax, Lansing Community College, the Ingham Intermediate School District, the Capital Area Transportation Authority and the Capital Regional Airport. The Finance Department has seen steady increases in the Ingham County millage over the past several years, including a voter-approved increase of 0.8500 mills in winter 2018 for the Ingham County Jail and an increase of 0.4158 mills in summer 2018 for the County’s general operating millage. The recent, voter-approved East Lansing Public Schools Bond for the rebuilding and improvements to area elementary schools has also been a contributing factor to tax bills going up.
Increases in Taxable Value
In 1994, Michigan voters approved Proposal A, which changed what property tax calculations were based on. Previously, they were based on the State Equalized Value (SEV) of a home, but now they are based on taxable value - the growth of which is capped at 5 percent or the rate of inflation (CPI – Consumer Price Index), whichever is less. As the economy has improved, the East Lansing Finance Department has seen an increase in the annual CPI, which has resulted in an increase in the taxable value of homes in the community and, in turn, an increase in property taxes. The CPI amount was 0.3 percent for 2016, 0.9 percent for 2017 and 2.1 percent for 2018.