Michigan House Republicans Use Fuzzy Math On Property Tax And Utility Savings

LANSING, MI — Michigan House Republicans are claiming families could save around $1,400 a year under a House plan to cut property taxes and roll back utility rates.

But the math looks much different for working class homeowners.

At Flint Talk, we are happy to see any kind of tax cut or refund from the government. If people can get some of their own tax money back, that is a good thing. But why can’t politicians be honest about what the average person is really going to save?

The plan would not eliminate all property taxes. It would remove the 6 mill State Education Tax, which is charged on a home’s taxable value, not the full market price of the house.

That matters because a home valued at $100,000 is not taxed like a $100,000 bill. In Michigan, property taxes are based on taxable value, which can be much lower because of the state equalized value and taxable value caps.

For example, if a homeowner has a taxable value of $34,000, removing the 6 mill state tax would save about $204 a year.

That is about $17 a month.

Even if someone had a taxable value of $50,000, the savings would be about $300 a year.

That is only $25 a month.

So when Michigan House Republicans throw around a big number like $1,400 a year, they are not talking about property tax savings alone. They appear to be mixing property tax cuts with claimed utility savings and other costs.

The utility savings are also smaller than the headline sounds. If the energy rollback saves customers around $1 billion statewide, that works out to roughly $137 to $238 a year for many households, depending on how the savings are divided.

That means a working class homeowner may be looking at something closer to $341 to $442 a year in combined savings, not $1,400.

Three hundred dollars is better than nothing. But if politicians are doing something good, they should not have to stretch the math to sell it.

Are Michigan House Republicans giving voters honest numbers, or using fuzzy math to make the plan sound bigger than it really is?