The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN
FRANK J. KELLEY, ATTORNEY GENERAL
Authority of home rule city to levy property tax millage
A city may not, in the absence of specific statutory authority, levy a property tax millage in excess of the millage limitations imposed by its charter or by the Home Rule Cities Act.
Opinion No. 6998
October 29, 1998
Douglas B. Roberts
P.O. Box 15128
Lansing, MI 48901
You have asked whether a city may, in the absence of specific statutory authority, levy a property tax millage in excess of the millage limitations imposed by its city charter or by the Home Rule Cities Act.
Information supplied with your request indicates that a city proposes to levy, in excess of the millage limitations imposed by its charter and by state law, a property tax millage for the demolition of abandoned buildings where such increased millage has been approved by the city's voters.
Const 1963, art 7, § 21, which limits the authority of a city to levy property tax millage to the rate of property taxes authorized by the Legislature, provides in part as follows:
The legislature shall provide by general laws for the incorporation of cities and villages. Such laws shall limit their rate of ad valorem property taxation for municipal purposes . . . .
This constitutional provision regarding property taxes continues the general rule recognized in City of Berkley v Royal Oak Twp, 320 Mich 597, 601; 31 NW2d 825 (1948), and there stated as follows:
Local units of government derive their powers of taxation from the legislature. Their power to impose taxes cannot be exercised except in pursuance of express statutory authority.
While Dooley v Detroit, 370 Mich 194; 121 NW2d 724 (1963)1, recognized the power of a municipality to adopt an income tax in the absence of enabling legislation, Const 1963, art 7, § 21, requires express statutory authority before a city may levy property taxes. Under section 3(g) of the Home Rule Cities Act, 1909 PA 279, MCL 117.1 et seq; MSA 5.2071 et seq, each charter city may levy property taxes "in a sum, except as otherwise provided by law, not to exceed 2% [20 mills] of the assessed value of the real and personal property in the city."
In addition to the charter city's millage rate of up to 20 mills, at least four other property taxes have been legislatively authorized for levy by cities. First, a property tax may be levied for garbage services of up to three mills. MCL 123.261; MSA 5.2681. Second, a property tax may be levied for library services. MCL 397.201; MSA 15.1661. Third, a property tax may be levied to support activities and services for persons 60 years of age or older. MCL 400.571 et seq; MSA 5.3439(1) et seq. Finally, a property tax may be levied for funding pension plans for city police and fire department personnel. MCL 38.559(2); MSA 5.3375(9)(2). For a general discussion of property taxation by cities, see 1 Michigan Municipal Law, Taxation, §§ 9.12-9.16, pp 9-9 to 9-15. A property tax for the demolition of abandoned buildings is not legislatively authorized for levy by cities.
It is my opinion, therefore, that a city may not, in the absence of specific statutory authority, levy a property tax millage in excess of the millage limitations imposed by its city charter or by the Home Rule Cities Act.
FRANK J. KELLEY
STATE OF MICHIGAN
1 In Dooley, the court held that a tax upon income was an excise tax, and that section 4i of the Home Rule Cities Act, supra, authorizing a home rule city by charter to provide: "For the laying and collecting rents, tolls and excises" was legally sufficient to support the city's levy of such a tax. Dooley, supra, 201. In response, the Legislature (i) adopted 1964 PA 243, MCL 141.91; MSA 7.245, prohibiting cities and villages from imposing, levying, or collecting a tax, "other than an ad valorem property tax, on any subject of taxation, unless the tax was being imposed by the city or village on January 1, 1964," and (ii) adopted the City Income Tax Act, 1964 PA 284, MCL 141.501 et seq; MSA 5.3194(1) et seq, permitting cities to impose and collect an excise tax on or measured by income, consistent with requirements of the act.