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 ext. 104
Tuesday and Thursday
The Assessing Department consists of Thomas Agrusa,
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.
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:
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.
The two types of property - real and personal - are further subdivided
into several property classes
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.
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 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, 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.
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.