Supreme Court’s rejection of ‘Dark Stores’ appeal is recognition of problems in property tax system

Taxes-erased-xThe refusal by the Michigan Supreme Court to accept the appeal of a property tax case by the Big Box retailer Menard’s is recognition of the problems created by the “Dark Stores” theory of property valuation, the Michigan Association of Counties (MAC) said today in reaction to the court’s order.

In May 2016, a unanimous panel of the Michigan Court of Appeals, in Menard, Inc. vs. City of Escanaba, expressly rejected the Tax Tribunal’s reliance on the “Dark Stores” method. Not only did the court find that the Tax Tribunal made a mistake of law, it also found that the tribunal didn’t properly perform its duty in evaluating evidence for determining value.

The Supreme Court’s decision means the Court of Appeals ruling stands as precedent and must be followed. That court had ordered the Tax Tribunal to again review the case, taking additional evidence on proper valuation in doing so.

“This is a most promising development,” said Stephan Currie, MAC’s executive director. “The Tax Tribunal has to return to this matter and operate under the orders given by the Court of Appeals to properly assess the value of commercial property.” In this particular case, the tribunal had ruled the Menard property was worth 60 percent less than what Escanaba had determined via standard valuation practices.

MAC was one of several organizations filing amicus briefs in support of the city of Escanaba’s position in the case.

Under the Dark Stores method, the Tax Tribunal has reduced so many valuations of Big Box properties that local revenues to provide public services have been reduced by at least $100 million since 2013. This process is shifting more of the burden onto homeowners to fund the basic public services all Michigan communities and businesses utilize each day.

For more information on MAC, visit www.micounties.org.

MAC urges commissioners to call senators on property tax amendment

veteran image 10-20-14MAC urges county commissioners to call their state senators this morning (Sept. 19) and ask them to support the Casperson amendment to Senate Bill 45, a veterans property tax exemption. This amendment would not diminish existing or future property tax exemption benefits to disabled veterans, but would require the state to reimburse local units for the lost revenue associated with the property tax exemption.
In this way, the state has ownership in the tax exemption policy they enact.
For more information on this issue, contact Deena Bosworth, bosworth@micounties.org or 517-372-5374.

MAC joins call for state attention to infrastructure crisis

roads image mliveMAC joined with a broad coalition of government and business groups at a May 30 event to highlight the ongoing, and worsening, crisis in Michigan’s physical infrastructure.

“Sound infrastructure is vital for economic growth. The drivers of our economy: manufacturing, agriculture and tourism depend on it,” said Andy Johnston, vice president of government affairs for the Grand Rapids Area Chamber of Commerce. “Infrastructure must be a data-driven discussion, and the data is clear. The Legislature needs to keep the funding promises made in 2015 for roads and begin laying the foundation to address other vital infrastructure systems.”

MAC’s Transportation Platform calls for “the logical development, interconnection and sustained maintenance of all transportation designs and infrastructures within our state.”

For more on the issue, see the press release, or visit fixmistate.org.

April calls tackle mentally ill in county jails

stepping-up-logoThe National Association of Counties (NACo) urges counties to participate in the following call:

“Join the Stepping Up partners for the second Stepping Up Network Call: a deeper dive into the question “Do we conduct timely screening and assessments?” which is featured in the publication Reducing the Number of People with Mental Illness in Jails: Six Questions County Leaders Need to Ask. On this call, a representative from the Virginia Department of Behavioral Health and Developmental Services will discuss specific mental health screening tools and protocols used in regional and local jails. In addition, representatives from Champaign County, IL, and Douglas County, KS, will be available to discuss their counties’ screening and assessment processes and respond to participants’ questions. Prior to the call, participants should join or review the “Conducting Timely Mental Health Screening and Assessment in Jails” webinar, which will occur on Thursday, April 6 at 2pm ET. The webinar will be recorded and posted on the Stepping Up Toolkit

Click here to register for the call.

Charlotte Williams, Genesee County pioneer, remembered

charlotte williamsCharlotte Williams, the first African American to be president of the National Association of Counties’ Board and the first African-American woman to be elected to the Genesee County Board, was remembered by MAC’s Tim McGuire as “a really, really sharp lady.”

Williams passed away in January.

She served for more than a decade in Genesee County and in the late 1970s became the second woman to lead NACo’s Board.

McGuire, who recently stepped down as MAC’s executive director, shared some memories of Williams with NACo in this week’s edition of County News.

About 1 in 4 Michigan county commissioners will be new in 2017

Michigan’s corps of county commissioners will greet 160 new members* come January, based on a preliminary review of unofficial results from Tuesday’s General Election. (*Updated 11-10-16)

The newcomers represent 26 percent* of the state’s 62michigan-county-map2 county commissioner seats.

Based on MAC reviews, turnover rates in county commissioner seats range between 20 percent and 25 percent in any given election. Commissioners serve two-year terms.

Among the notable changes stemming from Tuesday’s vote and earlier primary results from August:

  • Emmet County will welcome six new members to its seven-member board.
  • Lake County in west-central Michigan will have five new members on its seven-member board.
  • Branch County in south-central Michigan will have three newcomers on its five-member board.

As the statewide association that represents county governments in Michigan, MAC is gearing up for a series of “New Commissioner Schools,” in partnership with MSU Extension, to give newcomers an intensive look at their responsibilities.

“New commissioners don’t have a great deal of time to prep before their county responsibilities fall on them in January,” explained Tim McGuire, long-time MAC executive director, who will be leaving at the end of 2016. “These programs play an essential role in aiding public servants.”

Why Dark Stores reform matters so much

Attorney Jack Van Coevering discusses the legal issues with Dark Stores during a segment of the documentary "Boxed In."

Attorney Jack Van Coevering discusses the legal issues with Dark Stores during a segment of the documentary “Boxed In.”

A new documentary from students at Northern Michigan University tackles the “Dark Stores” property valuation crisis in Michigan. “Boxed In” is an ambitious project, in that it seeks to explain an extraordinarily complicated tax and public policy issue.

Take a look.

But recent coverage from Bloomberg News highlights why this is so important for the entire community.

Wal-Mart’s out-of-control crime problem is driving police crazy” focuses mainly on the travails of the Tulsa, Okla., Police Department, but the dynamic exists across Michigan:

“Big Box” retailers make big demands on local public services.

“Last year police were called to the store and three other Tulsa Wal-Marts just under 2,000 times,” the story noted.

An analysis of 22 Wal-Mart outlets in Michigan has found that their per-square-foot (PSF) property valuations ranged from $5.26 in Sault Ste. Marie to $33.94 in Wayne County’s Woodhaven.

For comparison, the average PSF value for Wal-Marts in its home state of Arkansas is $53.04.

This is the reality of the Dark Stores valuation loophole that “Big Box” retailers like Wal-Mart have been exploiting since 2013 to vastly reduce their values.

And, since lower property values equal lower property taxes, local governments have lost at least $100 million in revenue since 2013 due to this loophole.

Nevertheless, retailers — and residents — expect local governments to continue to provide those services vital to a safe, high-quality community. Michigan counties, for one example, spent $1.5 billion on security-related tasks in 2015 alone.

So, if Big Box retailers put demands on public services, yet figure out a way not to pay their fair share of the local property taxes to fund them, who is left holding the bill?

Yep, homeowners and small businesses.

Rep. Dave Maturen (R-Kalamazoo County) drafted House Bill 5578 to ensure a fair and reasonable system of valuing property based on its “highest and best use” in the marketplace. The bill soared through the Michigan House last spring on a 97-11 vote and awaits action by the Michigan Senate this fall.

We can’t think of a better epilogue to “Boxed In’s” tale than the enactment of HB 5578 before 2016 ends.

Report: Petroleum industry backs 47,000 jobs in Michigan counties

michigan-oil-rigThe oil and gas industry is credited with more than $47,000 jobs and more than $13 billion in economic activity in Michigan, according to a recent report by a Lansing research firm.

Michigan’s Oil and Natural Gas Industry: Economic Contribution,” released by Public Sector Consultants, Inc. in May, found that oil and/or natural gas were produced in 62 of Michigan’s 83 counties, and that the industry had economic effects in 82 counties.

“Employment  in  the  Michigan oil  and natural  gas  industry  has  doubled  since  2005,  from  11,089 jobs  to 22,781 jobs. Jobs are forecast to increase an additional 46 percent over the next ten years, although the outlook for employment will be weaker if the recent drop in oil prices is sustained,” the report stated.

To see the economic effects on your county, click here.

Primary results ensure at least 130 new commissioners take office in January

At least 137* of the 622 county commissioner seats in Michigan in January 2017 will have new occupants, a MAC review of the unofficial Aug. 2 primary results has found.

That number could grow in November, too, as 146 incumbent commissioners who advanced out of this week’s primary face general election foes.

Right now, though, the turnover in this election cycle will be at least 22 percent, a figure that would be in line with Michigan history, said MAC Executive Director Tim McGuire.

“Based on our reviews, the turnover rate hovers between 20 percent and 25 percent. In 2014, the rate was about 22 percent,” said McGuire, who has served at MAC for more than 35 years and been executive director since 1994. “You will see that commissioners who retire and create open seats are the source of many of these changes.”

Thirty incumbentmichigan-county-map commissioners, however, did not advance out of the primary this year, according to MAC’s review.

Two northern county boards will look substantially different come January, as Emmet County will welcome six new members to its seven-member board, while Luce County in the U.P. will have four newcomers on its five-member panel.

In preparation for the new commissioners, MAC already is working with MSU Extension on training programs via “New Commissioner Schools” the agencies will co-host at several locations in November and December.

“New commissioners don’t have a great deal of time to prep before their county responsibilities fall on them in January,” McGuire explained. “These programs are our way of helping them get off on the right step.”

*Figure updated and corrected on Aug. 9.

 

Allegan County wins top national award for digital practices

Mark DeYoung (second from left) and Jon Campbell (second from right) accept Allegan County's first place award in the 2015 Digital Survey Awards. (courtesy photo)

Mark DeYoung (second from left) and Jon Campbell (second from right) accept Allegan County’s first place award in the 2015 Digital Survey Awards. (courtesy photo)

Allegan County Board of Commissioners Chairman Mark DeYoung and fellow Allegan Commissioner Jon Campbell were presented the first place award in the Center for Digital Government’s 2015 Digital Survey Awards at the National Association of Counties’ Annual Conference this week.

Allegan, which won in the under 150,000 population category, was honored for offering 27 different online services, including its online GIS Data Library, which citizens and customers can download at no cost. Judges also made note of the county’s Connect with Us social media portal and its collaboration with Kent and Ottawa counties on procurement. “This solution and the consortium created by these three counties serve as a model for other municipalities across the state of Michigan,” the judges wrote.

Commissioner Don Disselkoen accepts Ottawa County's digital award at the NACo Annual Conference in North Carolina. (courtesy photo)

Commissioner Don Disselkoen accepts Ottawa County’s digital award at the NACo Annual Conference in North Carolina. (courtesy photo)

Campbell also serves as president of the MAC Board of Directors.

Several other Michigan counties received honors at the event.

Oakland County won third place in the over 500,000 category for its suite of programs, including a countywide social media strategy, its G2G (Government to Government) Marketplace.

Commissioner Don Disselkoen of Ottawa County, also a MAC Board member, was on hand to pick up his county’s sixth place award in the 250,000 to 449,999 category.

Jackson County Commissioner Sarah Lightner poses with her county's award. (courtesy photo)

Jackson County Commissioner Sarah Lightner poses with her county’s award. (courtesy photo)

Jackson County Commissioner Sarah Lightner accepted her county’s 10th place award in the 150,000 to 249,999 category. Berrien County received fifth place in the same population category.

The 2015 Digital Counties Survey, conducted by e.Republic’s Center for Digital Government, highlights counties across the country that are digital leaders. Established in 1984, e.Republic is the nation’s only media and research company focused exclusively on state and local government and education.

“This is an outstanding example of how Michigan counties are using innovation and technology to protect and enhance public services in tight budgetary times,” said Tim McGuire, executive director of MAC. “As these results show, counties of any size can find new ways to help their residents.”