Table 1

The proposal contains an unusual, and perhaps unintended interaction between the per-parcel assessment growth cap it would place in the Constitution and the existing "Headlee" amendment limit on tax increases caused by assessment growth in an entiremunicipality. Proposal "A" would not be effective if approved by the voters until after the "Headlee" amendment already reduced millage rates in 1993.[10] Thus, many taxpayers would receive a "double rollback" in 1993; a "Headlee" millage rate rollback, and a Proposal "A" assessment rollback.

Article IX. Section 31 (part of the "Headlee" Amendment) states in part:

If the assessed valuation of property as finally equalized, excluding the value ofnew construction and improvements, increases by a larger percentage than the increase in the General Price Level from the previous year, tile maximum authorized rate applied thereto in each unit of Local Government shall be reduced to yield the same gross revenue from existing property, adjusted for changes in the General Price Level, as could have been collected at the existing authorized rate on the prior assessed value.

This sentence requiring "Headlee rollbacks," would not be modified or limited by any other operation of Proposal A. The key phrase is the beginning of the sentence, "[i]f the assessed valuation of property as finally equalized . . . " Section 34 of the General Property Tax Act (MCL 211.34) states that the county board of commissioners in each County shall meet in April to determine county equalized value, which equalization shall be completed and submitted before the first Monday in May. The state board of equalization under 1911 PA 44 (MCL 209.4) must receive the reports from the counties' assessing officers and the state tax commission by the fourth Monday in May. Although the provision is made in these laws for subsequent adjustment based on appeals to the state tax tribunal, itappears that property is "finally equalized on the fourth Monday of May when the State Equalization Board meets.

Appeals

Section 39a of the GPTA (MCL 211.39a) requires that. Should an appeal to the tax tribunal delay determination of county equalized value, the assessing officer shall levy taxes upon the equalized value of property as determined by the state board of equalizations. While this section goes on to state that the results of such appeals may result in an adjusted tax rate, called a "final levy," such appeals would be confined to those made on the basis of deviations from 50% of true cash value under current law, not speculation over ballot issues. Appeals by local officials within a county under Section 34(4) (MCL 21 1.34) for improper equalization could lead to a change in the relative assessments within the county, but not the overall assessment.

Tax Reduction From the "Double Rollback"

The "double rollback" would result in additional property tax savings above that required by either the Headlee amendment alone. or the 3% maximum change for individual parcels. This reduction would occur in 1993, and would establish a lower millage base for future years. However, its impact is limited to operating millage levied by units of local government other than schools, since school millage would be reset by the constitutional amendment and its implementing legislation based on prior year revenue. See the section on the school funding guarantee, page 19.

Using the model presented later in this study, page 21, the additional gross property tax savingsfrom a "double rollback" in 1993 would be approximately $110 million.[11]