Property Tax Could Be Scrapped for Millions Under New Proposal

A new legislative effort in Michigan could eliminate property taxes for homeowners and businesses in the state should the issue manage to get into the November 2024 ballot.

The proposal, dubbed AxMiTax, comes from Michigan real estate agent and small business owner Karla Wagner, who told Newsweek that she wants to eliminate property taxes "because people can't afford them anymore."

"With the high cost of living and everything else that has gone up, we are losing way too many homes, farms and businesses in Michigan," she said. "People are leaving Michigan because of the high cost of living here."

According to Wagner, a Kent County resident and former volunteer sheriff's deputy, "if there was no property tax, rent would be more affordable because the landlord wouldn't be paying property taxes" anymore, and would pass those savings on to their tenants.

"The same thing with home ownership," she added. "If there's no property taxes, people would be able to actually buy a home here in Michigan, and we would retain the people in Michigan that we need for the state to survive. And more importantly, people would come back to Michigan and businesses would come flocking into Michigan because there's no property tax."

Wagner told Newsweek that she's not alone in her frustration at property taxes.

"We're taxed to death here in Michigan. We can't afford it anymore," she said. "We have the high cost of gas, groceries, utilities, prescription drugs and ever increasing property taxes."

This month, she told 7 Action News that she's in favor of keeping taxes for the police, firefighters and road services, but she would drop anything else. The Michigan real estate agent mentioned her unwillingness to pay for library services through her taxes, as she personally doesn't use the services, believing taxpayers should pay only for the services they use.

"I'm all about community welfare and this and that, but not at the expense of someone losing their home because they're paying for a library service for someone else," she told Newsweek.

Michigan has some of the highest property tax rates in the country, according to the financial advice company SmartAsset, an average tax rate of 1.32 percent—well above the national average of 0.99 percent. Rates can further vary from county to county.

Wagner has launched the AxMiTax organization, which will try to collect enough signatures to bring the legal initiative to the state ballot in November.

During a speech in July 2023 at a meeting sponsored by the South County Republican Club, Wagner said that the number one goal of the movement is "to keep people in their homes," as reported by LeaderPublications. "We are trying to eliminate the state, county and township's ability to seize our properties through taxes."

According to Wagner's organization AxMiTax, government "spending is out of control"—a common refrain that's recently been the focus of Republicans' attacks against the Biden administration.

"Government never wants to lose a revenue source. They say they need the money but it's time all these entities (government and schools) become fiscally responsible," AxMiTax writes on its official website. "By eliminating property taxes we not only regain true property ownership but give each citizen the ability to reevaluate how their money is being spent."

Wagner's proposal has met significant opposition in the state, with many forecasting that the measure will harm public services and rip open a massive hole in their budget.

Anthony Minghine, deputy executive director of external strategies for the Michigan Municipal League, told Newsweek that "this proposal is not a tax reform, it is an attack on our schools, communities, our state economy, and will devastate the very fabric of our communities."

According to Minghine, "the human impact" of the initiative "will be profound, and elimination of these services will ultimately devalue the property of every homeowner and business because Michigan will be a much less desirable place to live."

Minghine said that the proposal would cut over $17 billion in funding for critical services and "will eliminate thousands of jobs from our local economy."

"It only provides fractional and restricted replacement funding to cities, villages, townships and counties. There is NO replacement revenue for any other millage including local school millages, state education tax, libraries, parks authorities, community colleges, garbage pick-up, roads millages, public safety authorities, transit, etc.," he said.

"In short, this is bad public policy. Taxes are needed to fund those services we all recognize are for the greater good. They provide real human and economic benefit to us all and are necessary for us to function as a society."

Michigan Community College Association President Brandy Johnson told Newsweek that "simply put, the AxMiTax proposal would devastate Michigan's ecosystem of 28 public community colleges." According to Johnson, nearly 40 percent of operating revenue comes from locally-approved property taxes—and the AxMiTax proposal would lead to closures.

"Michigan voters time and time again vote to approve local millages because they know the immense value that colleges provide—they help individuals get the education they need to earn a bigger paycheck, they partner with employers to provide customized workforce development for new and incumbent workers, and they serve their local communities by providing dual enrollment coursework for high school students and enrichment opportunities for senior citizens," she said.

"There is no doubt that the AxMiTax proposal would force colleges to close and decimate their operations."

Michigan Library Association Executive Director Deborah Mikula told Newsweek that it would be "cataclysmic" to libraries if property taxes were eliminated. "The public library in communities throughout Michigan would close their doors, eliminate their staff, and cease to exist," she said.

"As locally controlled cultural institutions, most libraries in Michigan are funded primarily (75-95 percent) through property taxes," she added. "For our communities to be welcoming and vibrant places to live, work, visit, and learn we know that this investment in our public libraries is critical and essential for every resident. With over 7,700 employees working at the 397 library systems in Michigan, libraries are one of the last free and open public institutions in the heart of every single community in Michigan."

According to Mikula, over 50 percent of Michiganders hold library cards and "consistently and enthusiastically value their libraries by voting to support them through local millages."

Wagner doesn't see why public services like libraries and community colleges should close down because of her initiative.

"There should be no reason they close if there's enough people going to the library," she said. "If someone's not paying $5,000 a year in property tax, could they afford a $100 a year library membership? If there's not enough people going to keep the library open, then maybe it's time to close some of them or consolidate them, or find a different revenue source to keep them open."

It's not yet clear whether the proposal will make it to the state ballot. Wagner's AxMiTax must file at least 446,198 signatures from valid voters by July 8 to request a statewide vote on the initiative.

Are you a Michigan homeowner paying property taxes in the state? Let us know what you think of the proposal—whether you support it or oppose it—by contacting g.carbonaro@newsweek.com.

Update 2/20/24, 11:39 a.m. ET: This article was updated to include comments from Karla Wagner, Anthony Minghine and Brandy Johnson.

Update 2/21/24, 6:10 a.m. ET: This article was updated to include a comment from Deborah Mikula.