MARQUETTE - Bills sponsored by state Sen. Tom Casperson, R-Escanaba, designed to increase payments in lieu of taxes to local governments for state-owned land within their boundaries, were approved in the Senate Tuesday and are headed to the House.
Casperson and Rep. Darwin Booher, R-Evart, who sponsored Senate Bills 1021 and 1022, said their legislation intends to address repetitive problems with PILT payments not being made in full or on time.
When the state purchases land, that land is removed from the local property tax rolls. To make up for the loss of this property tax revenue, the state is supposed to pay PILT or swamp taxes to the affected local units of government and school districts.
"Our local governments and schools count on these funds to maintain critical services and help provide a quality education," Casperson said in a news release. "I sponsored this reform because it is time for the state to meet its obligation for the land it owns. Michigan residents are not allowed to pay only part of their taxes, and neither should the state. This will ensure schools and locals receive payments on time and in full, and will also ensure that the cost of owning property is fully taken into consideration as the state looks at buying more land."
Some of the changes the legislation provides include increasing PILT payments for purchased lands by ensuring payments are based on current taxable values and current millage rates, increasing payments on tax-reverted land from $2 per acre to $4 per acre, forcing the state to make payments by Feb. 14 to locals that have submitted their information as required and inserting a penalty on the state for not making payments on time, which would be identical to that assessed on landowners who do not pay property taxes.
The Michigan Department of Natural Resources owns about 4.6 million acres of land, with the vast majority of that located in the Upper Peninsula and northern Lower Peninsula. In addition, the federal government owns approximately 3.1 million acres.
"In total, about 20 percent of Michigan's land base has been taken off the tax rolls," Booher said in a news release. "Purchasing more and more land affects our communities. Education and local services are negatively impacted when land transfers ownership to the state because the state payments are significantly less than what would be paid by a private owner.
"Simply put, this legislation is about ensuring that our schools and local governments receive timely and fair compensation for property owned by the state."
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