LANSING – State and local government in Michigan rely on property taxes more than other states to fund operations, a study released by the national organization the Tax Foundation said. In fact, Michigan is the sixth most reliant state on property taxes in the nation.
In contrast, the state relies less heavily on income, general and specific sales taxes and licenses and fees than the average state, according to the study. Michigan’s corporate income tax is at exactly the average for all states, however.
According to the study that looked at data for the 2006-07 fiscal year, Michigan received 39.3 percent of all its state and local revenues through property taxes. The average of all states is a 30.1 percent reliance on property taxes.
Most local revenues are through property taxes, and even after the 1994 passage of Proposal A shifting much of school finances to sales taxes, property taxes still account for much of the state’s school revenues.
However, the Live Free or Die state New Hampshire (which has no sales tax) had the greatest concentration on property taxes, with 61.3 percent of its revenues coming from that tax. Its neighbor, Vermont, relied on property taxes for 42.1 percent of its revenues. Also in the top 10 were New Jersey, Texas, Rhode Island, Connecticut, Illinois, Florida and Wyoming. If you happen to live in Texas then you may want to think about protesting your property tax bill. You can do so by using a service such as texas home shield and work on saving yourself some money. It’s worth a try to see if you can get some money back in your pocket.
Aside from the property tax, general sales taxes accounted for 21.5 percent of the state’s revenues (the average was 23.5 percent) while Washington (which has no income tax) relied on sales taxes for 62.1 percent of its revenues.
Michigan relied on selective sales taxes (like the tobacco tax) for 10.5 percent of its revenues (the national average was 10.9 percent).
Michigan relied on individual income taxes for 18.7 percent of its revenues. The national average was 22.6 percent, with Oregon relying the heaviest on income taxes. A total of 44.1 percent of its revenue comes through that tax.
Alaska gets 52.6 percent of its revenues through licenses and other fees, mostly on oil, whereas Michigan gets 5.3 percent of its revenues from licenses. The average was 8.2 percent.
However, Michigan gets 4.7 percent of its state and local revenues from corporate income taxes, matching the national average. Alaska again topped the charts with 16.5 percent of its revenues coming from those taxes.
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