Here is a recent blog from Michigan Association of Counties – MAC – it says it all….please contact the Senate Finance Committee members and all your downstate friends and relatives and urge them to close this major loophole!!
A new documentary from students at Northern Michigan University tackles the “Dark Stores” property valuation crisis in Michigan. “Boxed In” is an ambitious project, in that it seeks to explain an extraordinarily complicated tax and public policy issue. Take a look.
But recent coverage from Bloomberg News highlights why this is so important for the entire community. “Wal-Mart’s out-of-control crime problem is driving police crazy” focuses mainly on the travails of the Tulsa, Okla., Police Department, but the dynamic exists across Michigan: “Big Box” retailers make big demands on local public services.
“Last year police were called to the store and three other Tulsa Wal-Marts just under 2,000 times,” the story noted. An analysis of 22 Wal-Mart outlets in Michigan has found that their per-square-foot (PSF) property valuations ranged from $5.26 in Sault Ste. Marie to $33.94 in Wayne County’s Woodhaven.
For comparison, the average PSF value for Wal-Marts in its home state of Arkansas is $53.04.
This is the reality of the Dark Stores valuation loophole that “Big Box” retailers like Wal-Mart have been exploiting since 2013 to vastly reduce their values. And, since lower property values equal lower property taxes, local governments have lost at least $100 million in revenue since 2013 due to this loophole.
Nevertheless, retailers — and residents — expect local governments to continue to provide those services vital to a safe, high-quality community. Michigan counties, for one example, spent $1.5 billion on security-related tasks in 2015 alone.
So, if Big Box retailers put demands on public services, yet figure out a way not to pay their fair share of the local property taxes to fund them, who is left holding the bill? — Yep, homeowners and small businesses.
Rep. Dave Maturen (R-Kalamazoo County) drafted House Bill 5578 to ensure a fair and reasonable system of valuing property based on its “highest and best use” in the marketplace. The bill soared through the Michigan House last spring on a 97-11 vote and awaits action by the Michigan Senate this fall.
We can’t think of a better epilogue to “Boxed In’s” tale than the enactment of HB 5578 before 2016 ends.