Three residential blocks in three different Michigan communities show how the massive decline in property values and the resulting "Shadow Tax Cut" rolled across the state.
Bridge looked at residential blocks in two suburbs (Troy and Wyoming) and the capital city to judge how the cut played out for individual homeowners. The figures presented below are drawn from official sources:
Lansing: 300 block of Westchester Road
Nestled in one of Lansing's tonier neighborhoods near the Grand River, Westchester Road winds between large lots hosting a variety of ranch houses, some sprawling, some more modest. And of the 15 dwellings listed in the 3000 block, 13 had a smaller property tax bill in 2010 than in 2008. Of the two that saw taxes increase, one was for barely $100 -- and the other was the apparent result of a conversion from an owner-occupied dwelling into a rental (with the subsequent loss of the homestead property tax break).
Of the 13 tax drops, the largest was $1,027 and the smallest was 7 cents. The average among the 13 decliners was just under $770. In 2010, the average tax bill on the 13 properties was $4,380 on 46.3 mills.
In November, city voters approved a plan to increase the city's millage rate by up to 4 mills to mitigate cuts to police and fire services and road repairs.
"I generally support millage requests, but the decline in my property taxes did made it a little easier to vote for the police and fire millage in the last election," said Elizabeth Boyd, a Westchester Road taxpayer.
"One day last week I was working in the yard and while I was outside the city refuse truck came by and picked up my yard waste and recyclables; moments later the Postal Service came by and delivered my mail; and in a few short weeks, the snowplow trucks will be clearing my street. I truly appreciate the work that public employees do and I abhor the anti-government mentality that is so negative about them," added Boyd, who served as press secretary to Gov. Jennifer Granholm and Secretary of State Candice Miller.
Troy: 500 and 600 blocks of Thurber Street
This stretch of homes, primarily colonials, near an elementary school was erected in the 1970s.
Of the 10 residences on this part of Thurber, three saw property tax declines between 2008 and 2010, while seven showed increases. During that time, however, the millage rate in Troy rose 1 mill.
All 10 had stable ownership in the period, although one appears not to have had a principal residence tax exemption for some years and is owned by mortgage lender Freddie Mac.
The average taxable value of a home in Troy in 2010 was $92,500 (taxable value generally represents 50 percent of what would be considered the market rate for a home) and average tax bill was $3,277.06, as compared to $120,000 and $4,115.09 in 2008, according to the Oakland County Equalization Department.
The average property tax drop among the decliners was $975. The average increase among the rest was $263.
Troy homeowner Mike Maziaz says while his taxes have gone down overall in recent years, there have been hard-to-explain fluctuations in his property assessments.
"It hasn't been what you would call a consistent pattern of declination," he said.
And part of his property tax cut has been offset by higher federal income taxes because he is able to deduct less on his federal income tax return. "I think it's a double-edge sword," he said. "For those who can itemize deductions, a lower tax bill means less deductibility on their income taxes."
Wyoming: 1700 block of Chateau Drive SW
Almost all the owners of the 10 houses on this block in Grand Rapids' largest suburb all saw their property taxes decline between 2008 and 2010 -- despite a 1.25 mill increase for public safety first applied to 2010 tax bills. Annual tax bills are expected to drop even further in 2011 as values continue to decline.
Kim Spaak and her husband, Mark, moved into their home in the 1700 block about a month ago after buying it on a short sale. A year ago, the home was estimated to be worth $240,000, Kim Spaak said, but recently was appraised at $189,000. The lower price and a $700 drop in property taxes were major reasons the young couple decided to buy the house, she said.
Nine of the 10 homes showed property tax declines in the period, with the average drop being $250 on an average tax bill in 2008 of $3,450. And the one house that did show a tax increase between 2008 and 2010 will fall below the 2008 tax level in 2011, local records show.
“We think that’s only fair,” Kim Spaak said of her new purchase. “I wish it was worth more, but we expect the economy will recover. We’ll be in a better place to afford higher taxes 10 years from now.”
Rick Haglund and Pat Shellenbarger contributed to this report.