2012-2013 Budget - City of Saginaw MI

approved an additional four mills for public libraries when Proposal A eliminated their millage from theschool’s millage and another three mills to operate a public transportation system.Taxes are due and payable on July 1 at the City Treasurer’s Office and become delinquent after 30 days. To allreal and personal taxes paid on or after August 1, there shall be added interest at the rate of ½ of 1 percent forevery month, or fraction thereof, from August 1 until the date of payment. A penalty of ½ of 1 percent isadded after July 31. From March 1 and thereafter, real taxes are collected by the Treasurer of Saginaw County,who adds and keeps a collection fee of four percent (4%) on the unpaid balance, and in addition, adds interestat the rate of one percent (1%) per month from March 1 until the date of payment. Unpaid taxes, together withall charges thereon, become a continuing lien on the property assessed. The general tax law provides that realestate with delinquent taxes shall be sold at a state land sale.Tax LimitationBy general law, property taxes for City purposes are limited to two percent (2%) of the assessed valuation ofall real and personal property in the municipality, provided that no such restriction shall prevent the levy oftaxes required for the payment of general debt obligations.The charter of the City of Saginaw provided that City taxes shall be subject to the overall limitation (City,School and County) imposed by Section 21, Article X, of the Michigan State Constitution, which is 1-1/2percent of assessed value exclusive of debt incurred prior to December 8, 1932. Act No. 44, Public Acts of1948, effective August 20, 1948, amended all Michigan city charters nullifying charter limitations andauthorized that the levy for city purposes shall not exceed one percent (1%) of assessed valuation in any oneyear, unless and until a different tax rate limitation is provided by charter. State equalized valuations havebeen used in place of local assessed valuations.On November 6, 1979, pursuant to an initiatory referendum, the City Charter was amended by the electors ofthe City of Saginaw to reduce the maximum property tax that may be levied by the City in any year from 10mills to 7.50 mills. The amendment further provided that if in subsequent years the assessed value of allproperty within the City is increased for any reason, this maximum 7.50 mill rate would have to bepermanently reduced so as to yield the same gross dollar revenue as the fiscal year 1979 property tax revenueyield ($3,828,778). The amendment further provided for up to a 3 mill emergency levy if a specific emergencyis declared by the Mayor and concurred in by a 3/4 vote of the full Council.On November 5, 2002, May 3, 2005, and November 3, 2009, special elections were held to remove theproperty tax dollar limitation of $3,828,778 and the 7.50 mill limitation that was approved by the voters onNovember 6, 1979. The voters overwhelmingly defeated the proposal in these special elections.LOCAL INCOME TAXESThe City of Saginaw receives approximately 37.69% of its General Fund revenue from local income tax.Economic conditions continue to have a negative impact on this revenue source. For the 2012/2013 Budget, therevenue from income taxes is expected to increase $222,879, or 1.89%. This increase is primarily due to thecity aggressively pursuing delinquent income taxes by designating a Collection Specialist to that effort.60