- Myth One: "There must be plenty of tax money. Look at all the fancy houses that are going up!" If the county actually received more money every time a new house was built, we would be in great shape. In fact, because of the Headlee Amendment, county tax revenues can only grow at a rate equal to inflation. When the total taxable value times the millage rate equals a value that is bigger than last year's revenue plus inflation, the millage rates "rollback" so that tax revenues don't grow too big. This system was supposed to prevent government from growing as property values rise. Unfortunately, there is no compensation for increasing population in this formula.
In Leelanau County, our population grew 28% between the 1990 census and 2000 census, yet our government got by on the same (inflation adjusted) revenues.
- Myth Two: "Leelanau taxes are already too high!" In fact, Leelanau County has the lowest county tax rate of any of the Michigan counties. (In 1969, voters approved an operating millage of 6.2 mills, Headlee rollbacks have reduced this rate to 3.76 mills.)Even with the one mill increase to fund our operating budget, we will be in the lowest 10%. With property taxes, the debate about "how high is too high?" is clouded by another feature of the Headlee Amendment. There is a cap on how much the assessed value of a property can go up each year, so as a property stays in the same hands, the gap between assesed value and actual value grows. When a property is sold, the assesed value is determined by the sale price.
Owners of two identical properties can pay wildly different property taxes; the family who has been there 20 years pays much less than the family that bought last year. The difference between Homestead and Non-homestead taxes adds another layer. The county website lets the nosy mouse-clicker check out exactly how all of the property in a neighborhood is assessed and who pays what in property taxes. A real estate agent's view of the Headlee amendment was recently published in a Grosse Pointe blog. Many of his points apply to Leelanau.
You may download a Question and Answer sheet about the County Operating Millage (Microsoft Word format) here. And here is a comparison of county millage rates in Michigan, 2004.