By Katie Dudlets
The Meridian Times Staff Reporter
Sitting in the food court of Meridian Mall, mall-goer Tim Cunningham guessed correctly when he said that the very building he was sitting in was one of the biggest taxpayers in Meridian Township. As a matter of fact, it is the biggest taxpayer in Meridian, with a total taxable value of $29,387,161 in 2015.
Cunningham didn’t guess, however, that apartment properties made up seven of the top ten taxpayers in Meridian last year.
“Wow, I’m surprised at that,” Cunningham said. “But I guess they do cover a lot of ground and they’re [made up of] a bunch of units. I mean, you get 400 to 500 units that are worth $100,000 a piece, so you’ve got half a million dollars worth of property set in an apartment complex. From that standpoint, it really isn’t that surprising.”
With exception to the Meridian Mall, LP, Consumers Energy Company, and Sparrow Development, Inc., apartment properties dominated the list of top taxpayers in the year 2015.
Meridian Township Assessor David Lee said there are multiple aspects that go into finding the taxable value for different properties.
“In Michigan, property is valued (for property tax purposes) at half of its market value, which is the assessed value,” Lee said. “With Proposal 8 passing in 1994, there were two new values that were created. One is called capped value and that is a higher year’s taxable value adjusted for any physical change to the property and then also increased by the rate of inflation. And then there’s taxable value, which is the lesser of assessed value or capped value; whichever of those two figures is the least amount.”
Lee said his department uses these values to then determine which ownerships have the greatest taxable value in the township.
“We look at a single ownership and whatever they own within a township. For instance, the Meridian Mall owns several parcels under the same ownership: Meridian Mall, LP,” Lee said. “All those values [the taxable values of each parcel] would be totaled to get the total taxable value for that owner. Then we have software that sorts those owners for the same ownership and tells us the most taxable value in the township.”
Lee said the reason for the apartments holding the majority of the places on the top ten list is because apartments are generally larger than other properties.
“There’s more value to an apartment complex than there is to a McDonald’s restaurant,” Lee said.
Dr. Charles Ballard, an economics professor at Michigan State University, said the top ten list for Meridian’s taxpayers makes sense based on how large apartment complexes can be.
“The amount of tax paid is going to be approximately proportional to the value of the property,” Ballard said. “A large apartment complex will have a substantial market value.”
Lee said that Meridian’s top ten list is not that unusual for a township in this area.
“If you look at East Lansing, I think five out of their top ten taxpayers are apartment complexes,” Lee said. “If you look at different municipalities, you’ll find that pretty common.”
While reluctant to say whether this trend in Meridian is good or bad for the community, Ballard said that the large tax bills of the apartment complexes are beneficial to the township’s funding.
“Of course, everyone wants his or her taxes to be lower,” said Ballard, “but the problem is that when we cut taxes, we have less money to spend on paving our roads, thus Michigan has horrible roads, and less to spend on fixing our aging infrastructure,thus Flint has lead in the water, and less to spend on universities, thus tuition at places like MSU has gone up dramatically in recent decades.”