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Foreclosed Homes in Michigan Lowered Taxable Property Values

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By : John Cutts    99 or more times read
The rising number of foreclosed homes in Michigan has been pushing down taxable property values across the state. In July, more than 8,000 households in the state were notified with defaults or foreclosures, according to a real estate research firm.

In the first 6 months of the year, nearly 61,000 households in the state were notified with defaults or foreclosures, putting one out of every 74 housing units into the foreclosure process.

In the five counties of Southeast Michigan, overall taxable property values have gone down by 10 percent, cutting down taxable values by around $20 billion for 2010 local government operations.

In 2009, taxable property values declined for the first time in most of the counties of Oakland, Wayne, Macomb, Livingston and Washtenaw. These counties now are trying their best to balance their budgets, including implementing cuts in wages and work hours and probably even jobs.

Wayne County has a tax base of $51 billion in real estate and personal properties, but it is expecting a reduction of $4.6 billion or about 9 percent of the tax base. The board of commissioners approved a budget of about $2.1 billion for fiscal year 2010, but the shortfall could force the board to lay off 538 workers from the current work force of over 4,100 employees.

In contrast, Oakland County will try its best to keep its approximately 3,600 employees despite the loss in tax revenues. But it will negotiate with the workers' union to be able to reduce wages by 5 percent in the next two fiscal years.

Oakland, the second biggest county, saw its property tax base of $62.4 billion in 2008 go down to only $54.3 billion this year.

In Livingston County, taxable real estate values have fallen for the first time in over 50 years, according to county executive Robert Block. Its taxable values went down from almost $9 billion in 2008 to about $8 billion this year.

In Macomb County, 60 percent of all housing units have closed the traditional gap between taxable values and assessed values despite the tax cap established in the 1990s. Taxable values dropped from $32 billion last year to $31 billion this year.

According to Washtenaw County Executive Robert Guenzel, his county has lost over $1.5 billion in equalized property values since 2007, resulting in the first drop in taxable real estate values in the county in 51 years.

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