Source: Sherman Publications

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Township special assessment challenge upheld by court

by David Fleet

June 27, 2012

Atlas Township-The community needs police protection, but just how to collect funds for law enforcement that's fair to property owners and legal in Michigan continues to be debated.

At issue is a special assessment that was established in 2006 which included $50 for every improved lot and $25 for unimproved lots. Township officials implemented the special assessment to offset the necessary increase in police funding. The special assessment was renewed in 2010 by a 4-1 vote. Township Supervisor Shirley Kautman-Jones voted no.

The township established a contract with the Genesee County Sheriff's Office about 13 years ago, funded by 1 mill from area property owners. Since 2007 the cost for police protection has risen from $432,205 to $538,653 in 2012, about a 24 percent increase.

Since 2006, when the $50/$25 special assessment was first implemented, resident Jim Ellis has challenged the township in Michigan Tax Tribunal Small Claims Division. They judged in his favor in 2006 through 2011.

"And in 2012, when I get hit with the special assessment I'll get it adjusted again," said Ellis, who was a member of the township Police Funding Advisory Committee.

"Three times I've approached township officials with the ruling. And three times it's been ignored. The special assessment is legal; however only if it was ad valorem not parcel," he said.

Ad valorem, Latin for "according to value," is a tax based on the value of real estate or personal property. In the case of a muncipality, a millage rate is used to base the amount residents pay for police or fire on the value of their home. For example, a home valued at $100,000 with a state equalized value taxed at 1 mill would pay $50. A $200,000 home would pay $100.

"Basiclly, if it was ad valorem the guys with big houses are going to pay more,"added Ellis. "The lower taxable value homes are paying more than their fair share. The higher valued homes are not paying enough. The way the law is set up you have to first go through the tax tribunal—you have to take it to the court of appeals to seek the change. That takes money to do. After that the court would have to overrule the township."

Ellis was reinbursed about $34 per year.

Several township officials did not see it that way and continue to support the special assessment.

Paul Amman was township supervisor when the $50/$25 special assessment was first implemented in 2006. He still supports the special assessment.

"(Ad valorem) is an unfair way to assess for a service," said Amman, who currently serves as township trustee.

"It's based on the value of the property. Police service is not based on the value of property. If I have a bigger home I don't get more police protection than someone with a smaller house. For that matter, police spend more time in the village than on dead end private roads."

"Everyone gets the same protection. Police respond where the need has to be—the more dense the population, the more calls. Same officers. Same response time. Special assessment is a fair and equitable way to pay for police protection. I don't agree special assessment for police protection is illegal as the court says. It can be done, there are many comminties that do it this way. I spoke to lawmakers regarding the issue including State Sen. David Robertson to get this law changed, but lawmakers just don't know what to change. It's just unfair."

Amman suggests keeping the special assessment and if more funds are needed for police protection raising it to $75 for improved lots and $35 for unimproved lots.

Conversely, Michigan Tax Tribunal Judge Kimbal R. Smith determined the special assessment in Atlas Township is done unlawfully.

A special assessment is not a tax, explained Smith. In contrast to a tax a special assessment is imposed to defray the costs of specific local improvements, rather than to raise revenue for general governmental purpose. It was an error for the special assessment board to approve an assessment based on a flat fee per parcel.

Assessor Carrie Bock responded to the claim for the township. Bock told the tax tribunal it's her understanding that the township investigated the issue and many other jurisdictions are assessing on a per parcel basis. Furthermore, it is more fair to tax each parcel equally since police services are provided regardless of the taxable value of each parcel.

The township board will continue to discuss the issue at upcoming meetings. A November ballot question for police funding is under consideration.