Detroit Mayor Duggan proposes tax reform, rate hikes for vacant lots

Homeowners in Detroit would get a tax break under a new proposal by Mayor Mike Duggan.

The cut would come at the cost of higher taxes on the owners of vacant land in the city.

Speaking at the Mackinac Policy Conference on Wednesday, Duggan called the current system a “ticking bomb.”

“For more than 50 years the property tax system has two defining characteristics: blight’s rewarded, building is punished. We’ve done it for 50 years and [that’s] how we got lots of blight and not many buildings.”

Read: Duggan, Lt. Gov. Gilchrist, more talk population loss, policy reform at Mackinac Policy Conference

Duggan says a Detroit home worth $50,000 would see about a $450 yearly tax cut. Duggan also wants to raise tax rates on some businesses, like the hundreds of auto scrap yards in the city.

“Today in the city of Detroit, we have 53 grocery stores…16 hardware stores…two operating movie theaters — and in Detroit today we have 452 auto and scrap yards,” says Duggan.

Parts of Duggan’s plan will require changes to Michigan law. Republican Rep. Matt Hall is open to lowering the burden on taxpayers — from the sales tax on down.

“I agree with the mayor that we need to look at property tax relief, both in the city of Detroit and and across the state, so we’re open to entertaining ideas on how to give people that relief,” Hall says.

The state legislature is in the midst of budget negotiations. Even if Duggan finds a willing partner in Lansing, bills to change property tax laws likely wouldn’t come until the fall at the earliest.