Report: Detroit Homeowners Were Overtaxed by $600 Million

A report by The Detroit News revealed that the city overtaxed citizens for years by failing to lower property values as home prices dropped after the 2009 recession.

A report by The Detroit News revealed that the city overtaxed citizens for years by failing to lower property values as home prices dropped after the 2009 recession. Shutterstock


Connecting state and local government leaders

STATE AND LOCAL ROUNDUP | West Virginia Senate invites Virginia county to join the state … Maine governor vetoes sports betting legislation … California may consider constitutional amendment to deal with homelessness.

A report by The Detroit News and Center for Investigative Reporting revealed that the city overtaxed homeowners for years by failing to lower property values as home values dropped after the 2008 recession. The median sales price for a single-family home dipped from $75,000 in 2007 to less than $10,000 in 2009, and only recovered to $40,000 in 2019. When the news organization reviewed 173,000 homes’ assessments, however, more than 92% were over-assessed, allowing the city to collect an additional $600 million between 2010 and 2016. Thousands of homeowners are struggling with property tax debt, but Mayor Mike Duggan said the city doesn’t have the funding to correct the mistakes of past administrations.“Folks had a process by which they could appeal it. Those years are closed. I don't know any lawful way to go back and say to all the taxpayers of the city who did follow the process, 'We're going to raise your taxes to pay the taxes for people who didn’t,'” he said. Local homeowners like Breck Stevenson, whose house was overtaxed by at least $5,300 and who owes more than the $4,200 in back taxes, disagrees with the mayor. "It’s (the city’s) responsibility. It was their mistake. It’s their responsibility to take care of it and make things whole with the citizens,” he said. The former Chair of the State Tax Commission, Doug Roberts, said state knew that Detroit was overtaxing its homeowners and that the new investigation makes a “compelling case” for the government to address the issue equitably. During a city council meeting on Tuesday, members suggested the city could do more to correct the past mistakes. [The Detroit News]

WEST VIRGINIA | The West Virginia Senate passed a resolution this week encouraging a border county in neighboring Virginia to join West Virginia. State Sen. Charles Trump, a Republican, sponsored the resolution, which asks the citizens of Frederick County to consider joining West Virginia. Frederick County borders five West Virginia counties and was one of three Virginia counties that was invited to join West Virginia when it was established in 1862. “Frederick County’s residents have so much in common with West Virginia that our separation has never made sense. The citizens of Frederick County are champions of freedom and personal liberty … I don’t know if they’ve ever voted on the question in Frederick County, but all I wanted to do with this resolution is to say if you guys have any interest, we would love to have you be part of West Virginia,” Trump said. Charles DeHaven Jr., the chairman of the Frederick County Board of Supervisors said that the county would not be taking West Virginia up on their offer. “Personally, though we have great respect for our neighbors in West Virginia and work very closely with them on a lot of issues, such as safety, I have zero interest in becoming part of West Virginia,” he said. [Winchester Star; WDTV]

SPORTS BETTING | Maine Gov. Janet Mills vetoed legislation that would have legalized sports betting in the state. The bill would have brought in an estimated $5 million per year in tax revenue and fees by allowing casino operators, betting parlors, race tracks, and Native American tribes to host sports betting operations. Mills, a Democrat, said that expanded gambling would bring more harm than good. “Before Maine joins the frenzy of states hungry to attract this market, I believe we need to examine the issue more clearly; better understand the evolving experiences of other states; and thoughtfully determine the best approach for Maine. That approach needs to balance the desire to suppress gambling activities now being conducted illegally and the need to protect youthful gamblers and those least able to absorb losses under a closely regulated scheme,” she said. Sen. Louis Luchini, the Democrat who sponsored the legislation, was not discouraged by the veto. “I appreciate that she took a real thoughtful approach and researched the topic thoroughly and I’m willing to keep working on it to make it a more acceptable measure for anyone who has issues with it,” Luchini said. [Portland Press Herald]

CALIFORNIA HOMELESSNESS | A task force put together by California Gov. Gavin Newsom is pushing a constitutional amendment designed to force local governments to house people without shelter. The task force proposal, which would need to be approved by the legislature and the voters, would allow the state to sue local governments that don’t help people get into housing. Sacramento Mayor Darrell Steinberg, a task force leader, said something must change in a state with one of the worst crises of people being forced to live out on the streets. “We’ve tried moral persuasion. We’ve tried economic incentives. But all of it’s optional,” he said. “Why should this be optional?” [California Matters; Los Angeles Times]

SEX-ED | A Republican senator in Arizona has introduced a bill to prohibit schools from teaching sex education before the seventh grade. The bill would also ban discussion of homosexuality by removing references to LGBTQ sexual conduct from the education statute. The bill would also require schools to hold public meetings while drafting sex education curriculum. Conservative politicians in the state have argued that sex-ed is not age-appropriate, and the bill is intended to give parents more access to sex-ed curriuculum so they can make informed decisions. Opponents of the bill said it is unnecessary in a state where parents already have to sign a consent form in order for their children to attend sex-ed classes. [KTAR; Arizona Capitol Times]

Emma Coleman is the assistant editor for Route Fifty.

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