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MISCELLANEOUS RESOLUTION #92226
'October 8, 1992
BY: FINANCE COMMITTEE, DR. G. WILLIAM CADDELL, CHAIRPERSON
IN RE: 1992 COUNTY GENERAL FUND PROPERTY TAX AND PARKS &
RECREATION TAX RATES
TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS
Mr. Chairperson, Ladies and Gentlemen:
WHEREAS the County has a fixed millage tax rate of 5.26 mills
and a voted .25 mill for Parks & Recreation; and
WHEREAS the Huron-Clinton Metro Parks Authority has requested
the County to apportion a .25 mill property tax rate; and
WHEREAS application of the compound millage rollback required
by Article 9, Section 31 of the Michigan Constitution, the Headlee
Tax Limitation Amendment, results in the maximum allowable County
tax rate of 4.5920 mills, a Parks & Recreation maximum allowable
tax rate of .2500 mill and a Huron-Clinton Authority maximum
allowable tax rate of .2303 mill; and
WHEREAS Public Act 5 of 1982, "Truth in Taxation" Act,
requires the County Board of Commissioners to hold a public hearing
if the recommended property tax rate exceeds the adjusted Base Tax
Rate of 4.4848 mills; and
WHEREAS the County Executive recommends that the County tax
rate be set at 4.5720 mills, same as the 1990 and 1991 County tax
rates and .0200 mill below the maximum allowable tax rate; and
WHEREAS the Finance Committee recommends that the 1992 County
General Fund Property Tax rate be set at 4.5720 mills, .0200 mill
below the maximum allowable tax rate; the Oakland County Parks &
Recreation Tax rate be set at .2500 mill, the maximum allowable tax
rate; and the Huron-Clinton Metro Park Authority Tax rate be set at
.2303 mill, the maximum allowable tax rate; and
WHEREAS $128,659,549 is the estimated amount of the 1993
County General Fund Budget to be raised by taxation based on the
1992 State Equalized Valuation of $28,140,758,763 at the recommend-
ed rate of 4.5720 mills, together with the voted .2500 mill for
Parks & Recreation of $7,035,190 and the .2303 mill for the Huron-
Clinton Authority of $6,480,817.
0'
rrtv/TPROVETHE FOREGOING RESOLUTION
Di niel 1. twii;rpily, cobnly aecutive
NOW THEREFORE BE IT RESOLVED that each Supervisor of the
various townships and Assessing Officers of the several cities of
Oakland County are authorized and directed to spread on their
respective township or city tax rolls for the year 1992 the
following tax rates to be applied to their 1992 State Equalized
Valuation:
1992 County Voted for Huron-Clinton
General Property Tax Levy Parks & Recreation Park Authority
4.5720 Mills .2500 Mill .2303 Mill
Mr. Chairperson, on behalf of the Finance Committee, I move
adoption of the foregoing resolution.
FINANCE COMMITTEE
OAKLAND COUNTY, MICHIGAN
Inter - Departmental Memo
TO: Russell D. Martin, Director
Department of Management & Budget
FROM: Jeffrey C. Pardee, Budget Manager
SUBJECT: Tax Rate Computation for 1993 Budget
DATE: September 8, 1992
Please find attached the tax rate computation for estimated
Property Tax Revenue included in the 1993 Budget Recommendation.
The assessment freeze authorized by Public Act 135 of 1991 holds
1992 assessed values and equalized values equal to the state
equalized values on the 1991 tax rolls except for specific allowed
adjustments and, therefore significantly constrains 1993 revenue
estimates. The current estimate is $84,691 (.06%) lower than the
amount included in the 1993 budget.
The Truth-in-Taxation computation is based on an estimate from the
State Department of Treasury for Convention Facility Tax Revenue
($412,941) and for Cigarette Tax Revenue ($2,040,158). The Board
of Commissioners may levy a millage rate up to the Adjusted Base
Tax Rate of 4.4848 mills without holding a public hearing.
The Board has the further discretion of levying an additional
millage rate, up to 4.5920 mills, only after holding a public
hearing and adopting a separate resolution specifying the increased
tax rate. The Board shall not levy a tax rate in excess of the
Allowable Tax Levy of 4.5920 mills without a referendum.
Below are alternative millage rates under various laws and/or
conditions, all of which are based on a State Equalized Value (SEV)
of $28,140,758,763.
Millage
Rate Revenue
Maximum Authorized Levy 5.2600 $148,020,391
(with referendum)
Maximum Allowable Tax Levy 4.5920 $129,222,364
(without referendum)
Budgeted Revenue for 1993 4.5720 $128,744,240
(based on 2% SEV increase and
excluding $503,647 GM settlement)
Estimated Revenue for 1993 4.5720 $128,659,549
(based on actual 1.8% SEV increase)
Adjusted Base Tax Rate 4.4848 $126,206,450
(Truth-in-Taxation, including impact
of revenue from convention facility
and cigarette taxes)
To facilitate Board action, an Executive recommendation should be
presented to the Finance Committee no later than September 17. If
I can be of further assistance, please contact my office.
1986
1987
1988
1989
1990
1991
5.7%
8.4%
8.2%
6.4%
3.8%
1.8%
1.9%
3.7%
4.1%
4.8%
5.4%
4.2%
OAKLAND COUNTY, MICHIGAN
1993 BUDGET
TAX RATE COMPUTATION
The property tax rate computation is impacted by several State
statutes, including:
The Headlee constitutional tax limitation amendment,
adding section 211.34d of the Michigan Compiled Laws,
subsequently amended by PA 539 of 1982,
The "Truth in Assessing" Act, Public Act 213 of 1981
amending section 211.24 of the Michigan Compiled Laws,
The "Truth in Taxation" Act, Public Act 5 of 1982, adding
section 211.24e of the Michigan Compiled Laws, subse-
quently amended by PA 2 of 1986 (Convention Facility)
The "Assessment Freeze for 1992" Act, Public Act 135 of
1991, amending section 211.10 of the Michigan Compiled
Laws.
A capsule statement of the purpose of each statute as well as the
computation of their respective rollback fractions are provided in
attached Schedules I, II, III and IV. The Headlee and "Truth in
Assessing" rollback are compound reductions based on the County's
maximum authorized operating levy of 5.26 mills.
Headlee Rollback
Maximum Authorized Levy
1979 -92 CMRF (1)
Headlee Authorized Levy
5.2600 mills
.8730
4.5920 mills
1) The Compound Millage Reduction Fraction computes to .8730
because the increase in State Equalized Value (SEV), excluding
losses and additions, was greater than the increase in the General
Price Level during the period 1986-1989. In 1990, the increase in
SEV was less than the C.P.I., thereby allowing a rollup from the
prior year's CMRF of .8692. THE ASSESSMENT FREEZE HOLDS THE CMRF
CONSTANT FROM 1991 TO 1992.
S.E.V. C.P.I.
Incr. Incr.
Truth in Assessing Rollback
Headlee Authorized Levy
1991 Sec. 34 Rollback Fraction
Allowable Tax Levy
4.5720 mills
1.0000
4.5720 mills
Truth in Taxation Rollback
The Truth in Taxation Base Tax Rate is computed aainst the millage
actually levied in the immediately concluding fiscal year.
1991 Actual Tax Rate
1992 Base Tax Rate Fraction
1992 Base Tax Rate
1992 Adjusted Base Tax Rate
4.5720
1.0000
4.5720
4.4848 (See Schedule IV)
The Board of Commissioners may levy a millage rate up to the
Adjusted Base Tax Rate of 4.4848 mills without holding a Public
Hearing. The Board has the further discretion of levying an
additional millage rate, up to 4.5920 mills, only after holding a
public hearing and adopting a separate resolution specifying the
Increased Tax Rate. The Board shall not levy a tax rate in excess
of the Allowable Tax Levy of 4.5920 mills without a referendum.
Prepared by Budget Division September 8, 1992
2
SCHEDULE I
HEADLEE COMPUTATION
COMPOUNDED MILLAGE REDUCTION FRACTION
The Headlee Tax Limitation referendum amended Article IX of
Michigan Constitution by adding Section 31 which, in part,
specifies:
"If the assessed valuation of property as finally equalized,
excluding the value of new construction and improvements,
increases by a larger percentage than the increase in the
General Price Level from the previous year, the maximum
authorized rate applied thereto in each unit of Local
Government shall be reduced to yield the same gross revenue
from existing property, adjusted for changes in the General
Price Level, as could have been collected at the existing
authorized rate on the prior assessed value."
The tax limitation is computed by, first, determining the Millage
Reduction Fraction* (MRF) for the current year - 1992 and second,
formulating the Compound Millage Reduction Fraction (CMRF) by
multiplying the 1979-91 CMRF by the 1991 MRF. The Compound Millage
Reduction Fraction is not permitted to exceed 1.0000.
(1991 Total State Equalized Value-Losses) X Consumer Price Index
1992 Total State Equalized Value-Additions
= 1992 MRF
27,639,941,524 - 697,845,741 x 1.042**
28,140,758,763 - 1,198,669,330 = 1.0420
1992 MRF x 1979-91 CMRF = 1979-92 CMRF
1.0000*** x .8730 = .8730
1979-92 CMRF = .8730
* PA 539 of 1982, effective March 30, 1983, changed the formula
for computing the MRF by subtracting losses from the numerator
rather than adding losses to the denominator. This makes the
computation consistent with the formula used for "Truth in
Taxation".
1991 increase of 4.2% in the Consumer Price Index as reported
by the United States Department of Labor.
*** PA135 of 1991 (Assessment Freeze for 1992), specifies that the
1992 MRF under section 34d shall not be calculated. The 1992
CMRF shall equal the 1991 CMRF except where there have been
elections to override the reduction fractions or where new
millage has been voted in 1991 or 1992.
* *
3
SCHEDULE II
"TRUTH IN ASSESSING"
1991 ROLLBACK FRACTION
Public Act 213 of 1981, "Truth in Assessing Act," which
applies to counties and other taxing authorities other than school
districts, amended Section 211.34 of the Compiled Laws of Michigan
so that the taxing jurisdiction would be restricted to an operating
levy based on that unit's authorization valuation total rather than
a full levy based on the State Equalized Valuation. The Act
restricts the County to a levy rate for operating purposes which
will yield no more revenue on the total State Equalized Valuation
(S.E.V.) of the County than the maximum authorized millage rate
would have produced if levied on the total County Equalized
Valuation (C.E.V.). There is no provision for removal of the
"Truth in Assesing" rollback other than by placing a valuation on
County property equal to the State equalized level. The reduction
fractions from the Headlee Amendment and the "Truth in Assessing"
Act compound in their cumulative/reduction of maximum authorized
operating millage.
The 1992 section 211.34 rollback fraction is computed as
follows:
Total County Equalized Valuation
Total State Equalized Valuation = 1992 Sec. 34 Rollback Fraction
28,140,758,763
28,140,758,763 = 1.0000
1992 Sec. 34 Rollback Fraction - 1.0000
NOTE: PA135 OF 1991 (ASSESSMENT FREEZE) DOES NOT ELIMINATE THE
REQUIREMENT FOR CALCULATING AND APPLYING THE TRUTH IN ASSESSING
ROLLBACK FRACTION FOR 1992.
SCHEDULE III
"TRUTH IN TAXATION"
BASE TAX RATE FRACTION
Public Act 5 of 1982 added section 211.24e to the Compiled
Laws of Michigan which requires that any local unit of government
which levied more than one mill in 1991 shall either reduce its
1992 levy rate to compensate for an increased tax base or advertise
its intention to increase property taxes and hold a public hearing
to allow for taxpayer intervention. No sooner than seven days
after the public hearing, the governing body may then increase
taxes by a vote of its members, provided that in no case can the
levy rate exceed the allowable rate which results from the compound
reduction required by the "Truth in Assessing" Act, Sec. 211.34,
and the Headlee Amendment, Sec. 211.34d. It is important to note
that the Base Tax Rate that results from application of the "Truth
in Taxation" Act is based on the rate actually levied in the
concluding fiscal year whereas the Headlee and "Truth in Assessing"
rollbacks and based on maximum authorized operating rates regard-
less of the rate which was actually levied in the preceeding year.
The 1992 section 211.24e Base Tax Rate Fraction is computed as
follows:
1991 Total S.E.V. - Losses S.E.V.
1992 Total S.E.V. - Additions S.E.V. = 1992 Base Tax Rate Fraction
27,639,941,524- 697,845,741
28,140,758,763- 1,198,669,330 = 1.0000
1992 Base Tax Rate Fraction = 1.0000
NOTE: PA135 OF 1991 (ASSESSMENT FREEZE) DOES NOT ELIMINATE THE
REQUIREMENT FOR CALCULATING AND APPLYING THE TRUTH IN TAXATION
ROLLBACK FRACTION FOR 1992.
SCHEDULE IV
CONVENTION FACILITY ACTS:
Public Act 106 of 1985, the "State Convention Facility Development
Act", provides for a tax to be imposed on room accommodations in a
qualifying convention hotel. Public Act 107 of 1985, the "Tourism
and Convention Facility Promotion Tax Act", increases the liquor
sold to bar owners or retail outlets for consumption off the
premises. Under Act 106, counties share in the convention facility
tax revenues generated by imposition of Acts 106 and 107 when these
revenues exceed the debt service requirements for convention
facilities. As a result, Oakland County has received $692,768 in
1988, $17,257 in 1989, $248,440 in 1990, $385,702 in 1991, and
$412,941 in 1992.
Public Act 2 of 1986 amends the "Truth-in-Taxation" law to require
counties to reduce their base tax rate by the revenues received
under Acts 106 and 107. Counties may follow the truth-in-taxation
public hearing process to use the revenues for increased spending,
however, 50% of the revenue not used to reduce the millage rate is
required to be used for substance abuse programs.
CIGARETTE TAX ACTS:
Public Act 219 of 1987 increased the cigarette tax by four cents
($.04) per pack (2 mills per cigarette packaged 20 to a pack). The
proceeds are deposited in its entirety to the "Health and Safety
Fund" created by Public Act 264 of 1987. The State Department of
Treasury originally estimated that 82 Michigan counties, excluding
Wayne County, would share approximately seventeen million
($17,000,000) dollars on a per capita basis using the 1980 federal
census figures. Current Treasury Department projections amount to
$13,961,800 with Oakland County's share estimated to be $2,040,158
for 1992.
Public Act 264, of 1987 requires a county to reduce its base tax
rate for truth-in-taxation purposes by an amount determined by
dividing the estimated cigarette tax revenue by the state equalized
value of the county. The cigarette tax revenue to the extent not
used to reduce the county's millage rate must be used for the
following purposes.
A. 11/17 of the distribution to the county health department
for public health prevention programs and services. This
distribution is in addition to and is not intended as a
replacement for any state or county payments to these
health departments.
B. 5/17 of the distribution shall be used only for the
operation, maintenance, or expansion of an existing
county jail facility or juvenile facility; for the
acquisition, construction, and equipping of a new jail
facility or juvenile facility; or for court operations.
C. 1/17 of the distribution is not restricted to specific
purposes and is to be included with other County revenues
budgeted by the Board of Commissioners.
..n. 6
Total State Equalized Valuation
Unadjusted Base Tax Rate
Unadjusted Revenue Base
Less: Convention Facility Tax Revenue
Cigarette Tax Revenue
Adjusted Revenue Base
$28,140,758,763
4.5720 Mills
$ 128,659,549
412,941
2,040,158
$ 126,206,450
Adjusted Base Tax Rate = Adjusted Revenue Base
Total S.E.V.
=$ 126,206,450
$ 28,140,758,763
= 4.4848 Mills
I:\JEFF\93TAXCMP
...n 7
Resolution if 92226 October 8, 1992 .
Moved by Caddell supported by Millard the resolution be adopted.
Moved by Krause supported by Serra the resolution be amended to change the
tax rate from 4.5720 to a 4.3220 tax rate.
Discussion followed.
Vote on amendment:
AYES: Ferrens, Krause, McPherson, Oaks, Pernick, Price, Serra, Aaron. (8)
NAYS: Gosling, Huntoon, Jensen, Johnson, McConnell, McCulloch, Millard,
Moffitt, Obrecht, Olsen, Palmer, Pappageorge, Schmid, Skarritt, Wolf, Caddell,
Crake. (17)
A sufficient majority not having voted therefor, the amendment failed.
Moved by Aaron supported by Serra the resolution be amended as follows:
"The 1993 tax rate for the County of Oakland be set at 4.3434 mills plus an
additional sum of .2286 mills totaling 4.5720 mills and that the revenue received
from the .2286 mills be placed in a separate line item account to be known as the
Teresa Krause Millage Reduction Fund.
Further, that the said Millage Reduction Fund may only be used by specific
resolution of the Board of Commissioners after all contingency items in the 1993
Budget have been used and in the event that there be a balance in the Millage
Reduction Fund as of October 1, 1993, said balance shall be used exclusively to
reduce the 1994 millage rate for Oakland County."
Vote on amendment:
AYES: Krause, McPherson, Oaks, Pernick, Price, Serra, Aaron, Ferrens. (8)
NAYS: Gosling, Huntoon, Jensen, Johnson, McConnell, McCulloch, Millard,
Moffitt, Obrecht, Olsen, Palmer, Pappageorge, Schmid, Skarritt, Wolf, Caddell,
Crake. (17)
A sufficient majority not having voted therefor, the amendment failed.
Vote on resolution:
AYES: Huntoon, Jensen, Johnson, McConnell, McCulloch, Millard, Moffitt,
Oaks, Obrecht, Olsen, Palmer, Pappageorge, Pernick, Schmid, Skarritt, Wolf,
Caddell, Crake, Gosling. (19)
NAYS: Krause, McPherson, Price, Serra, Aaron, Ferrens. (6)
A sufficient majority having voted therefor, the resolution was adopted.
STATE OF MICHIGAN)
COUNTY OF OAKLAND
I, Lynn D. Allen, Clerk of the County of Oakland, do hereby certify that the foregoing
resolution is a true and accurate copy of a resolution adopted by the Oakland County
Board of Commissioners on October 8, 1992
with the original record thereof now remaining in my office.
In Testimony Whereof, I have hereunto set my hand and affixed the seal of the County
of Oakland at Pontiac, Michigan this 8th day of—) October /., 1991
--7- 7;.)..:Vi.::_. .... ..../.--<-4.4.,„. „Li, (..../ 4. °.
-.. Lynn/. Allen, County Clerk