2007-05-19 / News

County Commission Approves 2007 Equalization Report

By Karen Gould

The State Equalized Value (SEV) of property in Mackinac County, which is one half the market value, increased 7.59% from last year, reaching $1,327,136,916, which is $93,632,925 more than 2006. The total taxable value for property for 2007 is $849,671,765, up 6.07%, or $48,646,865 more than last year, according to the equalization report adopted by Mackinac County commissioners Tuesday, April 10. Rising property values are a positive sign for the county, said James Fenlon, county equalization director.

"Our county seems to be doing pretty good all the way around," said Mr. Fenlon.

Unlike some downstate counties, where home values are decreasing as businesses reduce their workforce, homes are flooding the real estate market, and the state continues to struggle with a budget deficit, those repercussions have not yet reached Mackinac County, he said.

Some people in the Detroit area have recently lost between $30,000 and $40,000 in equity in their homes, he said, because of the job market and poor state economy.

"We're not noting the decrease in home values and property values like some other counties in the state," said Mr. Fenlon. "That's not to say we won't, but it hasn't happened yet."

The gap between taxable values and the SEV has continued to grow yearly since Michigan voters approved Proposal A in 1994. The state mandate limits the increase in taxable value of primary household property, or homestead property, to the rate of inflation or 5%, whichever is less. The proposal was designed to keep current homeowners from being taxed off their property as land values increase.

For Mackinac County property owners, the spread between the taxable values and the SEV now has grown to 56%, said Mr. Fenlon. When property changes hands, the taxable value is brought in line with the SEV. What this means is, if an owner sold or transferred primary household property, also known as homestead property, the new owner would see the property tax bill increase, on average, by 56%. In 2006, the increase was 52.76%.

County residents who receive property through a transfer should be prepared for that jump in taxes, said Mr. Fenlon. New home buyers usually are informed of what they can expect their tax payments will be, he said, while those people inheriting property are often less prepared for the increase in the tax bill.

Clark Township continues to have the highest land value in Mackinac County, with an SEV of $314,585,546. As of last year, the City of Mackinac Island comes next with an SEV of $283,990,180. Moran Township ranks third with $120,229,907, followed by the City of St. Ignace with $111,820,591.

Ranked in order of SEV, other townships include Garfield with $110,222,936, Portage with $107,371,683, Newton with $64,461,823, Brevort with $47,842,364, Marquette with $45,916,595, Bois Blanc with $45,013,600, St. Ignace Township with $20,887,671, and Hendricks with $11,421,795.

In the past 10 years, the SEV in Mackinac County has increased 130.2% from $576,515,723 in 1997 to $1,327,136,916 adopted for this year. Values have gone up 352.5% since 1990, when the SEV was only $293,268,114.

There is a decline in building permits across the county, which serves as one indicator that growth is slowing in the area. Property values are not being affected, as they are downstate, said Mr. Fenlon.

"It's definitely a downward trend," said Dave Kovar, who is the building inspector for Hudson, Hendricks, and Garfield townships. In Garfield, he said, permits have dropped approximately 40% in the last three years, with most new building construction coming from people building second homes, rather than from year around residents.

Building permits include new construction, additions, garage construction, decks, and electrical work.

Marquette Township reported a slight increase in building permits with 19 permits in 2004, 16 permits in 2005, and 20 permits in 2006. Although permit totals were not available for 2005, Moran Township saw a slight increase with 37 permits issued in 2004, and 2006, when 43 permits were issued.

Other townships saw a decline. St. Ignace Township permits have been dropping each year, with 23 issued last year. Newton Township permits have dropped about 50% over the last three years, with 19 permits issued last year. Clark Township also is down from 2004, when 99 permits were issued, 79 permits in 2005, and 77 permits in 2006. Brevort Township has averaged approximately 30 per year for the last three years. The City of St. Ignace issued 55 permits last year, and the number has dropped over the last few years. In Hendricks Township, four permits were issued in 2004, seven in 2005, and five in 2006.

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