Prioritizing property tax cuts over schools and local services is not the answer

A version of this column originally appeared in The Alpena News.

Taxes are about collective impact — we all pay what we owe so that we all have what we need to survive and thrive. This is clear in the bus that takes my child to school every day and in the quality of educational programs he attends. I saw it in the ambulance that helped my elderly neighbor after a fall. It’s there in the park where we used to spend hours on the swings. It’s evident at the stop signs and traffic lights meant to keep anyone using our roads safe, and even in the trucks that haul away my trash and recycling every Thursday. 

Unfortunately, the Michigan Legislature is considering a package that would impede our schools and local governments from providing these services that we all rely on by significantly cutting property taxes. And cutting property taxes is something we can’t afford to do if we want to grow our economy and population while also helping Michiganders thrive.

Property taxes are one of the key ways our schools and local governments create vibrant communities. They are calculated by taking the taxable value of property and multiplying it by a millage rate, which is the number of dollars in tax you pay based on every $1,000 in taxable value on your property. In 2025, the statewide average rate for all property — primary residences, vacation homes, commercial and industrial buildings, and personal property — was 42.19 mills. However, average countywide rates varied across the state from a low of 29.65 mills in Lapeer County to 62.55 mills in Ingham County. And rates for a family’s primary residence are much lower due to exemptions, which reduce the statewide average homestead rate to 35.1 mills. 

This package would make it harder for schools and local governments to provide Michiganders the services they need while offering little tax benefit overall. Repealing the State Education Tax, a 6 mill levy, would pull $3 billion out of our School Aid Fund and could result in a $2,100 cut to our basic per-pupil foundation allowance. While a house with a taxable value of $100,000 would save $600 a year in property taxes, a school may have to let go of a beloved teacher, cut back on the number of paraprofessionals they have to help students with disabilities, eliminate an art program or implement a pay-to-play policy for school sports.

The State Real Estate Transfer Tax is a one-time tax paid when property changes hands, which provides nearly $500 million to our state school funding pot. Eliminating this one-time tax could come at the expense of providing school meals for all students and ensuring schools are able to support the mental health needs of students and to keep kids and teachers safe. 

And eliminating the personal property tax — which is only paid by businesses on their utility, commercial, and industrial equipment and property — would reduce school and local revenues by an additional $1.5 billion. These are dollars our local governments use to support public safety, public transit, libraries, schools, trash and recycling, and other basic services.

To be clear, these changes won’t save a homeowner much, and depending on how policymakers decide to backfill, could actually make it harder for families to make ends meet. One option being considered is an excise tax on select, but currently undefined services. If done right, this could make our tax code more progressive, but it poses two main risks: one, that we have to tax broad swaths of services used by families with low and moderate incomes, asking them to pay more, and, two, that we still cannot ensure that schools and local governments will avoid funding reductions. In this case, families and seniors would see vital services, like childcare, college tuition and healthcare, cost more while also losing out on the parks, community centers, quality schools and public safety that make Michigan a great place to live. 

Michiganders want to live in vibrant communities and they want to know that their basic and essential needs will be met. Creating pressures on schools, public safety and other local services through steep tax cuts does not get us there.