foolmenot.comIt works every time it’s tried; lower taxes will stimulate economy. The Bay City Times knows it and now the Bay City Commissioners are doing it; with a twist… People have been moving out of the city because of high taxes- Bat City says enough is enough… They are going to chop the property taxes in half for 12 years to folks who build new homes on vacant lots. This will be something to watch; and for some, something to learn from…
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Wednesday, December 28, 2005
Bay City commissioners are considering a tasty bit of bait to lure people back into the city. Using the state's Enterprise Zone program, Bay City proposes to give 12-year tax abatements to people who build new homes on vacant lots. It's a great idea. The plan would bring new blood into the city and fresh tax money into the city treasury.
Now, vacant lots are either drawing little tax revenue, or none at all if they have reverted back to the state or city because of nonpayment of taxes. For such open property, tax abatements on new homes would be a bargain, for both the city and the new residents. Several city commissioners have grumbled that they think that only developers would benefit from such a plan. But they miss a point that City Commission President Charles M. Brunner made at a meeting earlier this month. "It's no secret that people don't build in the city because of the high tax rate ..." he said.
Exactly... In Bay City this year, the total property tax rate for homesteads was 45.1695 mills. In Bangor Township, for example, taxes were 27.8653 mills. In the short term, there's not a lot that the city can do to lower the taxes it charges to maintain roads, pay employees and provide police and fire services. The city gradually is rolling back its taxes, a half mill a year.
In addition, there could be Enterprise Zones. For the first 12 years in the city, new-home owners would pay only half of the average, 32.8-mill, municipal property tax rate in Michigan - about 16 mills. After that, property taxes would rise to what every other homeowner pays in the city. It's a solid concept that could bring people back into the city, where a lot of us would rather live anyway.
There is a lot of appeal to having friendly neighbors close by, mature trees, parks for the kids and shopping within walking distance, or just a short drive away. Yet neighborhoods in surrounding townships have lured people out of the city for years. A sharply lower property tax bill is one of the prime reasons that people seek shelter outside of Bay City.
It's probably out of the question for now, but city commissioners in the future should also consider another aspect of the Enterprise Zone program. Tax breaks could be offered to homeowners who improve their houses. It would cost the city in existing property tax revenue - money the city sorely needs now. But a tax abatement would be a powerful incentive for people to sink money into aging houses all across Bay City.
For the time being, though, the city should jump on this new-home Enterprise Zone proposal from city staff. It could convince people to move back into the city. Even with the tax breaks, it would bring new money into city hall. It might even stop - finally - the steady bleeding of people from the city. That's a lot of bang from a program that wouldn't cost the city a single buck.