By Merinda Valley
Meridian Times staff writer
MERIDIAN TOWNSHIP — A recent settlement on the property tax value of the Okemos Meijer store at 2055 W. Grand River Ave. will draw back more than $320,165 from public agencies and place the money into Meijer Inc.’s coffers.
The settlement is the result of a property tax appeal by Meijer. The appeal was filed through the Michigan Tax Tribunal on the basis that from 2010 to 2012, the township’s assessments of Meijer property were too high.
Taxable value was reduced by over $1 million for each year, according to township documents detailing the settlement.
Meridian Township, and public entities it supports with tax dollars will finance the refund due to Meijer. The Okemos School District, Ingham Intermediate School District and CATA are among those returning funds. Click here for the interactive infographic.
David Lee, Meridian Township assessor, said the economic downturn around 2007 and 2008 resulted in decreased property values nationwide, including in Michigan and Meridian Township.
According to attorney Ken Nugent, who represents tax petitioners for the Allen Brothers law firm in Detroit, businesses are appealing property taxes all over the state.
Find an interactive map here.
Helen McNamara, assistant superintendent of Finance and Business for the Ingham Intermediate School District wrote in an email,
“For last year, 2011-12, Ingham ISD made refund payments which, in aggregate, represent 1,500 refunds to taxpayers as a result of taxable value appeal settlements. The numbers have been increasing over the past few years and last year included more than double the number from the two years earlier.”
“The township, as the assessing unit, is required to go through this process to defend its assessment and incur the cost, but its revenues are small compared to the revenues of the other units that it’s collecting for, primarily the schools,” said Catherine Mullhaupt, director of Member Information Services for the Michigan Townships Association of the property tax appeal process.
However, Robert Clark, director of finance for Okemos Public Schools, said the Meijer settlement with Meridian Township will not significantly impact the district, though it must return around $130,232 to Meijer.
“A good portion of this, about 70 to 75 percent of this, will be made whole by the state. The remaining pieces which is about $30,000, which is associated with our debt fund, and about $5,000 associated with the sinking fund,” Clark said.
The money lost from the sinking fund will result in spending cuts, but the $30,000 that the state will not recoup will be paid for by the district’s debt reserves.
Clark said the state will reimburse Okemos Public Schools for monies that it must refund to Meijer Inc. through the foundation allowance, the amount of state funding guaranteed to each Michigan school district.
The refund from Okemos Public Schools to Meijer will have absolutely no impact on the district’s general fund, Clark said.
“We are prepared for this kind of occurrence. We prepare for that annually,” said Clark. “By and large, there is no impact on the budget process as pertains to Okemos Public Schools…we have adequate reserves to accommodate this, and we don’t anticipate any repercussions as it affects the district’s budgetary process.”
CATA, the local bus line, will lose $15,012 as a result of the Meijer settlement, but does not expect major damages from its refund, either.
“While CATA never likes to lose funding, this is an issue out of CATA’s control. It’s similar to other tax refunds due to delinquent collections, etc.,” Debra Alexander, assistant executive director for CATA wrote in an email.
According to McNamara, an intermediate school district does not receive any offsetting revenue for refunds caused by property tax settlements, so revenue is reduced. Of the $30,287 Ingham Intermediate School District refund to Meijer, $22,792 will come from the district’s Special Education operating fund, she said.
“Property taxes represent a major source of funding for our programs and services, and a decrease in property tax revenue due to declining property values has a negative impact on these programs and services for students, as well as a reduction in funding provided by the ISD for districts to support special education programming in their districts,” according to McNamara.
Meridian Township Manager Gerald Richards said township funds lost to Meijer are paid back through the Downtown Development Authority, and at this point, their influence on the township is “to be determined.” Richards said he doesn’t anticipate programs being cut to compensate for refunded money.
Other municipalities across Michigan, Baydoun said, are faring worse.
Of large commercial retailers he said, “They’re successfully appealing because the cities just don’t have the resources to respond to many of the appeals.”
But all property owners — from multibillion-dollar corporations like Meijer to average homeowners — have the right to appeal their property taxes. Peter Kopke, chief clerk for the Tribunal said he doesn’t see that big-box stores are filing property tax appeals more frequently than other property holders.
“Everyone is in a strong position because there have been overassessments in most areas,” Baydoun said of those filing appeals in recent years.
Though property overvaluation may have occurred in some townships, Mullhaupt said the local units are not particularly looking to make things harder for any of the businesses, as they are valuable to the community.
“They want companies to pay their fair share along with the other businesses…particularly the local businesses in the area. They want to have thriving communities and sustainable economies, and they’re basically doing their jobs, and yet having to go and fight to keep these stores part of the tax base.”
However, as the economy and property values shift, property tax appeals remain the legal right of landowners.