Local officials respond to property tax shift approved by State House

The state House of Representatives has approved a bill to move up the due date of county property taxes to offset lost state revenue sharing dollars. The bill would gradually move up the county property tax collections from the winter to the summer. How will this affect Presque Isle County taxpayers?

“At this point it’s not affecting them, other than the fact that their winter bill, part of it is going to be shifted,” said PI County treasurer Pat Cornett. “In six months they are going to get another tax bill.”

Here’s how the tax shift works: o 2004: Regular tax bills sent out.

o 2005: One third of county taxes are billed in July, with two-thirds due in December.

o 2006: Two-thirds of county taxes are billed in July, with one-third due in December.

o 2007: All county tax bills mailed in July.

The bill would gradually move up the county property tax collections from the winter to the summer to offset a $182 million cut to county revenue sharing payments. The early collections would go into a pool counties can draw from instead of receiving revenue sharing payments from the state.

“THE THEORY is that we can draw on that to supplement what we would have received in revenue sharing,” said Cornett. “With ours based at about $900,000, using that formula, that would give us about two years before that fund would be done. I don’t see how that’s going to help us.” Counties and other local units of government have seen their revenue sharing payments drop by about a billion dollars in recent years. The bill is one of the last pieces needed to balance next year’s $39.7 billion state budget for the fiscal year that begins tomorrow (Friday). The state constitution requires a balanced state budget. Presque Isle Township supervisor Peter Pettalia would like only one tax collection because it would less costly. “It’s ridiculous to have to collect twice and go through the labor intense part of collecting twice,” said Pettalia. “Most citizens in these areas would just as soon pay one, and if the one happens to be in the summer time, that’s fine.”

AFTER VOTING for a little more than three hours, the Republican-controlled House approved the measure 55-52. “I have a problem, in that the state is assuming that the bill is issued in December, it means you get all of your money, and we know that’s not true,” said Cornett. “How soon we can come up to that $974,000 is another question. That’s my problem. We have to wait and see how it plays out.” Cornett said the county has not set the millage yet. The Presque Isle County Board of Commissioners could set the rate at 5.74 mills, but it looks like it could be 5.665. If that is the figure decided upon, the revenues from taxes would be about $2.8 million. “One third of that is $947,874,” said Cornett. “That’s what we would have to put in the reserve.” Granholm first laid out the proposal in her executive budget proposal in January and said she would sign the bills.

“WE’RE ALL very pleased to say that this represented a major

final piece of a very tough budget year,” she said in a news conference with Republican House Speaker Rick Johnson and House Minority Leader Dianne Byrum. The vote dragged on because many representatives refused to cast a vote until it was clear which way the bill would go. A number of Democrats met with Granholm in her nearby office throughout the day as the governor tried to rally enough votes to pass the bills. Opponents called the shift a tax increase, arguing that it prevents property owners from having the use of their money for those extra months if taxes were due in the winter rather than the summer.

“By 2007, there probably won’t be a winter tax of any sort,” said Cornett. The county tax collection bills are Senate Bill 1111 and 1112.