27600 Jefferson Circle Dr.
St. Clair Shores, MI. 48081
Department Hours: Monday – Friday 8:00 a.m. – 4:30 p.m.
Department Phone#: 586-447-3355
Overview and Department Function
The Assessing Department consists of the City Assessor and a staff of three full-time employees, all of whom are certified from the State Assessors Board. The Assessing Department is the first link in the property tax revenue chain. 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 property located within the City of St. Clair Shores. The department studies the sales market and collects information about properties in order to estimate current market value.
The Assessing Department does not create value. Rather, value is created by economic forces in the market of buyers and sellers. The Assessor has the responsibility to study the transactions of the market and to 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 and summarizes their characteristics. The office also tracks individuals and organizations eligible for exemptions and other forms of property tax relief.
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 the property tax administration.
The assessment roll consists of property 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 consists of business assets used in connection with commercial enterprise.
The two types of property – real and personal – are further subdivided into several property classes. A few examples of each are given for reference.
- Real property in St. Clair Shores includes:
– Residential (houses, vacant lots, duplexes, condominiums)
– Commercial (office buildings, restaurants, apartment buildings,
– Industrial (manufacturing facilities, engineering facilities)
– Exempt (churches, government buildings, schools)
- Personal property in St. Clair Shores includes:
– Commercial (copy machines, restaurant ovens, cash registers)
– Industrial (stamping machines, grinding machines)
– Utility (electric poles and lines, gas mains, cable wires)
Proposal A was a dramatic ballot initiative passed by the voters of the state of Michigan on March 15, 1994. Prior to the application of Proposal A, for the first time in the assessment year of 1994, the method of calculating a property tax levy was to multiply the state equalized value by the authorized millage rate. 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, which is now funded by the State, primarily from an increase in the general sales tax from 4% to 6%. The result of Proposal A was a typical reduction in overall property taxes paid, but with the concession of a 50% increase in sales tax paid on consumer goods.
State Equalized Value or Assessed Value
The State Equalized Value or Assessed Value for a property represents 50% of its estimated fair market value. The Assessed Value is computed in the same manner as was the case prior to Proposal A. Twenty-four month sales studies are performed by the county equalization department to determine the total assessment increase by class (residential, commercial, industrial, 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 appropriately the class increase among all the various areas of the city, as determined by analysis of sales within each area. In St. Clair Shores, for instance, there are over twenty distinct residential areas. Each of these areas is separately analyzed and receives a different assessment increase or decrease. The Assessed Value for a given property may increase or decrease to any amount that sales analysis indictates. Subsequent to the processes of county and state equalization, the Assessed Value becomes the State EquaIized Value. In most contexts, Assessed Value and State Equalized Value are used in an interchangeable sense. The State Equalized Value does not become particularly relevant to most property owners until a property sells.
Capped Value is a new term that was introduced with the inception of Proposal A. Capped Value is computed as: (the prior year’s 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 in the state. The result of the formula is that Proposal A limits the capped value from increasing by more than the lesser of 5% or the rate of inflation, unless an addition to value has been added or there has been a transfer of ownership in the preceding calendar year. For the year 2011, the rate of inflation factor is 1.017.
Taxable Value is also a new term that was introduced with the inception of Proposal A. Taxable value, for a given year, is the lower of that year’s State Equalized Value or that year’s capped value (see above). The essential significance of this is that a Taxable Value generally may not increase by more than 5% in a given year. Of the three valuation numbers listed in this section, the Taxable Value is the number which is of key interest to residents and property owners. A good rule of thumb is that for every $1,000 in taxable value change there is about $40 increase in annual property taxes for a homestead property, depending on the school district to which it pays taxes.
Example Illustrating Typical Value Changes:
The following example would be typical for St. Clair Shores this year:
Given: Assume 10% assessment decrease for 2012;
2.7% inflation factor; $100,000 market value for 2011
2011 SEV: $50,000
2011 Taxable Value: $50,000
2011 Capped Value: $50,000
2012 Assessed Value: $45,000 ($50,000 x .90)
2012 Capped Value: $50,850 ($50,000 x 1.027)
2012 Taxable Value: $45,000 (lesser of AV/CV)
Assessed Value Change: $5,000 ($50,000 – $45,000)
Taxable Value Change: $5,000 ($50,000 – $45,000)
Decrease in Taxes: $200 ($5,000 X .040)
“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 may increase substantially over time, particularly with economic conditions of low inflation and strong real estate sales. In the case of a property that has sold, in 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 not been recently sold. The impact of this provision increases over time.
Assessment Appeal Process
Proposal A has not changed the right of taxpayers to appeal their assessments. The first level of appeal is direct contact with the assessor. Many “appeals” are simply misunderstandings or misinterpretations of facts 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, all of whom are St. Clair Shores residents. The board members are typically professionals familiar with real estate valuations, such as agents, brokers, or appraisers. Dates, times, and locations for meetings are printed on the annual change of assessment notice. Applicants appearing before the Board of Review are advised to bring information that helps to substantiate claims of over-assessment, such as photographs, appraisals, and listings of comparable sales. Meetings are informal and are usually held in the City Council Chambers at City Hall. The Board begins meetings on the Tuesday following the first Monday of March of every year. Notification of the Board’s decision is provided by mail no later than the first Monday in June. The next level of appeal must be made by June 30 to the Michigan Tax Tribunal (MTT). The MTT is a quasi-judicial body that provides a structured, semi-formal court setting in front of a hearing referee. In rare instances, appeals may proceed to the Michigan Court of Appeals and Michigan Supreme Court.
2011 Assessment Roll Preparation
The equalization ratios for the 2011 assessment roll as determined by the Macomb County Equalization Department, are as follows:
|Property Class||Ratio||% Decrease Required to Equalize|
Consumer Price Index (CPI) for taxable value increases: 1.7%