Source: Sherman Publications

Officials weigh-in on proposed tax break for cops, firefighters

by CJ Carnacchio

September 19, 2012

Should police officers and firefighters who live and work in the same community be exempt from paying all property taxes?

Michigan State Rep. Kurt Heise (R-Plymouth) believes they should.

That’s why he introduced House Bill 5853, a one paragraph piece of legislation that would do just that.

“The idea is that you’re given the exemption (on your principal residence) from the community or entity that you serve directly,” explained Heise, who noted the concept was brought to his attention by the Plymouth Twp. treasurer.

That exemption includes all property taxes, from municipalities to schools.

“It’s everything,” Heise said. “You pay no property tax on your home.”

For example, a village police officer who lives in the village that employs him would be exempt from all property taxes on his home. However, a county sheriff’s deputy who lives in one township, but works in another would not receive a tax exemption under this bill.

“If this bill goes to a hearing, we’ll certainly look at all of these different combinations because we were sensitive to that as well,” Heise said. “Realistically, I don’t really expect a hearing this year because I know (the legislature’s) got other stuff on (its) plate. But I’m hopeful that I will be coming back to Lansing next year and this might be a bill that I would want to reintroduce.”

The proposed legislation would give communities a way to encourage police officers and firefighters to live where they’re employed given residency requirements are no longer legal in Michigan. It would also give fire departments a recruitment tool with which to bolster the ranks of their paid-on-call staff.

“You certainly want people who are close by,” Heise said. “This could become an inducement for attracting and retaining (fire and police personnel).

“We could use this to supplement the pay and benefits that these people receive . . . Basically, this becomes part of the pay and benefits package. It’s an interesting idea.”

Heise noted the bill, which has been referred to Tax Policy Committee, would apply to full-time and part-time police officers; career, part-time and paid-on-call firefighters; and those who work for public safety departments, which are basically combined police/fire agencies.

He said it would not apply to reserve police officers. “That really was not the intent,” Heise explained. “Reserve officers in most communities are used for special events, crowd control, emergencies and the like. I don’t contemplate it applying to them.”

State Rep. Brad Jacobsen (R-Oxford) opposes the legislation on principle.

“As much as I admire and appreciate everything that our first responders do for us, (the legislature has) been trying to eliminate (tax) loopholes and special treatment for individuals whether it’s by age or occupation,” he said. “We’re trying to get things back on a level playing field and make our tax system simpler for everybody to use . . . It really goes against much of what I think we’ve been trying to accomplish in Lansing over the last two years.”

To Jacobsen, House Bill 5853 appears to be “another feel-good, look-good issue in an election year.”

“It really shouldn’t be brought up,” he said. “It doesn’t make sense to me.”

Jacobsen wasn’t alone in his opposition.

“If they live here, they should live like every other citizen – they should pay the taxes,” said Oxford Village Councilman Elgin Nichols. “I think they’ve chosen their profession because they like that type of work . . . and if they live here, my opinion is they should share the cost of running the community.”

“I’m not in favor of anything like that,” said Oxford Township Treasurer Joe Ferrari. “Once you start carving out certain groups (and exempting them) from paying property taxes, it shifts the burden to others. To me, everybody should be paying the same rate in the community in which they live.”

Oxford Village Police Sgt. Mike Solwold, who lives and works in the municipality, has mixed feelings on the proposed legislation.

On the one hand, Solwold believes the tax break would “definitely be a good incentive” to entice public safety personnel to live in the municipalities they serve, which he sees as a benefit to everyone.

“I love living and working in this community and I feel like I have a tendency to care more because I do actually live in this community,” he said. “Definitely for emergencies, you don’t want (public safety personnel) to be too far away. You do want them close.”

On the other hand, Solwold doesn’t believe he should receive any special treatment because of his job.

“Just because I work in this community, I don’t think that I should be any different or pay anything less than anybody else,” he said. “I didn’t get into this to make a ton of money, obviously . . . I guess I just want to be there right with everyone else.”

Heise recognizes that some folks will argue that exempting one group of people from property taxes is not fair.

“I can understand the argument, but at the same time, these are people who we are essentially hiring to take on the most difficult tasks in our community,” he said. “If you look at it as part of the compensation package for these individuals, there is certainly a benefit because it’s not really coming out of the community’s budget. It’s lost revenue, but it’s not something that is coming out of the general line-item budget.”

Oxford Fire Chief Pete Scholz called the proposed legislation a “double-edged sword,’ given fire departments these days need both paid-on-call personnel and revenue.

“They need paid-on-call (firefighters) all the way across the state,” he said. “Everybody needs paid-on-call firefighters. It’s getting harder and harder for people to commit their time to do that. If (a property tax exemption) was an incentive, maybe that would help.”

Scholz noted how Oxford’s department currently has around 20 paid-on-call firefighters, but could really use “another 15 at least.”

“It is getting very difficult to get paid-on-call employees,” the chief said. “The last time we ran the ad and I think we only got maybe nine applications.”

Any gain in personnel via this proposed property tax exemption would have to be weighed against the financial impact.

“We’re losing tax revenue,” Scholz said. “I don’t know if it would be a wash or not.”

Some officials believe if a tax exemption is granted for police officers and firefighters, other groups will want one as well.

“It’s being selective and I can see other groups wanting to get in on it, too,” Scholz said. “What’s to stop say a teachers group from wanting to get in on it. I can see township officials and village officials wanting to do the same thing in the future.”

“Once you start giving certain exemptions to certain groups, you’re going to have others lining up at the door for the same thing,” Ferrari said. “It could be anybody. You could have teachers. You could have municipal workers. Anybody like that.

“Once you start that, you’re going to keep eroding the tax base and leave fewer and fewer people to pay for all the services.”