Tax backwards

Jan 14, 2004 at 12:00 am

A new law signed by Gov. Jennifer Granholm at the end of December could garner the city as much as $60 million a year in property taxes that currently go uncollected. But not everyone in the land of tax laxity is pleased with the change.

“I am concerned that there may be unintended consequences to this legislation,” says Councilwoman JoAnn Watson.

Combined with a change in state law that reduces the foreclosure time for tax-delinquent properties from five to two years, this change could well result in lots of poor people losing their homes, and the city losing control of its housing stock.

Watson says, “Detroit should not hand its housing stock over to the county or state without exercising our own best practices on behalf of citizens who are in dire need of adequate affordable housing …”

Detroit will turn collection of delinquent taxes for 2003 over to Wayne County on March 1. The county will pay the taxes to the city, and then pursue the tax deadbeats. If, after two years, the county can’t collect, the city must decide whether to reclaim any seized property by paying the county back, or let the county auction it off.

Wayne County Treasurer Raymond Wojtowicz is ecstatic about the law. He tells News Hits that Metro Times played a significant role in encouraging its passage (see “Dearth & Taxes,” Aug. 20-26, 2003, and “A $60 million question for the city,” Oct. 22-28, 2003).

State Sen. Patty Birkholz, R-Saugatuck, who sponsored the legislation, is also happy. Both she and Wojtowicz say it will remove the burden of collection from Detroit, which has maintained a convoluted, inefficient system for years.

Betty Buss, director of Policy Projects for Detroit Renaissance, an economic and public policy nonprofit, says the law will give fits to tax dodgers who have exploited the city’s poor collection procedures. “For those who pay, it’s just not fair that others don’t,” she says. “If this is the system that every other city in the state uses, it’s really bringing fairness to those people who do pay their taxes.”

Buss predicts the change will lead to faster redevelopment of delinquent parcels.

Send comments to [email protected].