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Please
be reminded that the following information is a tool to
help you reach a better understanding of the Assessment
process and how it affects you. If you should have any
questions or would like to explore the subject further, please
contact the Assessing Department directly at (586) 739-1600,
Tuesday or Thursday
5:00 p.m. to 8:00 p.m.
The Assessing Department consists of Nancy A. Strehl,
the City Assessor, who is certified by the State Assessors Board.
The Assessor's responsibility is the discovery,
listing, and valuation
of all properties within the assessing jurisdiction. The primary
purpose of the Assessing Department is to estimate the fair market
value, or "true cash value", of all real and personal properties
located within the City of Utica.
The Assessing Department does not create value.
Value is derived
from economic forces in the market (sales of properties between
buyers and sellers). The Assessor has the responsibility to study
these
market transactions and appraise all property in accordance with
market trends. The Assessing Department also keeps track of
ownership changes, maintains maps of parcel boundaries,
maintains legal descriptions for all land, and prepares sketches
of all buildings summarizing their characteristics.
Understanding Your
Assessment Notice
General Definitions of Assessing Terminology
Within the context of the Assessing Department and
its related activities, it is helpful to have a familiarity of major
terms and concepts relevant to assessment administration. The following
is a listing of pertinent definitions:
Property Types
The assessment roll consists of property valuations located
throughout the taxing jurisdiction. There are two main categories
- real property and personal property. Real property
consists of permanent physical structures and the land on which
they stand. Personal property consistsof business
assets used in connection with a commercial and/or industrial enterprise,
not considered real property, basically personal property is anything
that can be picked up and moved.
Property Classes
The two types of property - real and personal - are further
subdivided
into several property classes
Proposal A
Proposal A was a dramatic ballot initiative passed by the voters
of the
state of Michigan on March 15, 1994. "Proposal A" significantly
changed
the administration process for assessments while preserving the
traditional
method of calculating assessed values. In contrast to prior practice,
tax
billings are now computed by means of multiplying the taxable value
by
the authorized millage rate.
In addition, Proposal A changed the school funding
process. Schools are
primarily funded with the monies generated by the increase in the
general
sales tax from 4% to 6%. However, a Hold-Harmless millage
can be
instituted by a majority of the voters of the community to supplement
additional funding to the school district.
Hold Harmless
Proposal A established a statewide allowance of $5,000 per pupil
with
formalized annual increases. School districts with higher operating
costs
per pupil than the state mandated figure, are able to hold themselves
harmless by continuing to tax homestead property. A hold-harmless
millage
can only be instituted if it is passed by a majority vote of the
residents
of the community.
State Equalized Value (S.E.V.) or Assessed Value
(A.V.)
The State Equalized Value or Assessed Value for a property represents
50% of its estimated fair market value. Twenty-four month sales
studies are performed by the County Equalization Department to determine
the
total assessment increase by class (residential, commercial, and
personal).
Upon completion of county equalization, the Michigan State Tax
Commission uses the same procedures to equalize each class of property
in each of the 83 counties in the state. The local assessor's responsibility
is to spread the required class percentage increase among all the
properties
in each class of property within the city, as determined by analysis
of sales
within each area. In the City of Utica, for instance, there are
eight residential sections. These sections are further broken down
by year built. Each section
is separately analyzed and receives an adjustment according to the
results
of the sales analysis. Subsequent to the processes of county and
state
equalization, the Assessed Value becomes the State Equalized Value.
In most contexts, Assessed Value and State Equalized Value are
used in an interchangeable sense.
Capped Value
Capped Value is a new term that was introduced with the inception
of
Proposal A. Capped Value is computed as: (the prior years Taxable
Value - losses) x (the lower of 1.05 or the Consumer Price Index
factor)
+ additions. The CPI factor is synonymous with the rate of inflation
and is determined by the Michigan State Tax Commission for use by
all assessing departments within the state. The result of the formula
is to limit the capped
value from increasing by more than the lesser of 5% or the rate
of inflation,
unless an addition or a loss has occurred to a property or there
has
been a transfer of ownership in the preceding calendar year.
Taxable Value
Taxable Value, in any given year, is the lower of that year's State
Equalized
Value or that years capped value (see above). Taxable Value is the
value
amount of key interest to residents and property owners. The essential
significance of this is that a Taxable Value generally may not increase
by
more than 5% in a given year, unless there has been a transfer of
ownership
or an addition or a loss to the property.
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"Uncapping the Taxable Value"
Another important provision of Proposal A is the concept
of "uncapping
the taxable value." The spread between the Assessed Value and Taxable
Value has increased substantially over time, particularly with economic
conditions of a low inflation and real estate sales. When a property
has sold, within the assessment year following the transfer of ownership,
the Taxable Value and the Assessed Value are set to the same number.
It is entirely possible for a situation to exist where identical
houses
on the same street may have dramatically different tax bills,
resulting from one house having been recently sold and one
which has been owned for several years.
Assessment Appeal Process
Every taxpayer has the right to appeal their assessment.
The first level of appeal is directed to the assessor. Many "appeals"
are simply misunderstandings or misinterpretations of fact which
can be resolved effectively in the office. The next level of appeal
is to the Board of Review. The Board of Review is comprised of three
members and one alternate,to which whom are all knowledgeable residents
of the community. When you receive your notice of assessment in
mail during the end
of February, it will include upon it the dates, and times the boardwill
be meeting.
Applicants that appear before the Board of Review should be aware
that the burden of proof is upon them as the appellant to substantiate
their claim of over-assessment. This can be addressed by presenting
information such as photographs, appraisals, and listings of comparable
sales to the board.
The next level of appeal must be made by June 30th to the Michigan
Tax Tribunal. The MTT is a quasi-judicial body that provides a structured,
semi-formal court setting in front of a hearing referee.In rare
cases, appeals may proceed to the Michigan Court of Appeals.
E-MAIL US
CITY OF UTICA
7550 Auburn Road
Utica, MI 48317
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