BREAKDOWN AND DISCUSSION
City of Marquette Operating Millage
6/21/22 City Commission Special Meeting
This special meeting of the City Commission was held on June 21 to consider raising the City operating millage
5/9/22 City Commission Special Meeting
This special meeting of the City Commission was held on May 9 to hear a presentation from City Staff regarding the budget and need to raise the operating millage.
What is a Mill?
A mill is a way to determine property taxes. One mill is valued at $1.00 per each $1,000.00 in Taxable Value. For example, if your property has a taxable value of $80,000, one mill is worth $80 ($80,000*1/1000=$80).
What is taxable value and how is it different than market value?
The market value is what your house would sell for in the current market. The taxable value is what your tax assessor reports the house is worth for purposes of calculating your property tax bill. Taxable value is the figure you actually pay tax on. This amount can only increase a certain amount per year by law.
What are the taxing entities in the City of Marquette?
Your tax bill will give you a more detailed breakdown but in addition to the City, County, State, and Peter White Public Library millages, there is also a Senior millage and the Iron Ore Heritage Authority.
What is the current City operating millage rate in Marquette?
The City is currently levying 14.9225 mills. Going back to our example, the $80,000 taxable value house is paying $1,193.80 in City taxes each year.
What do I currently pay in City taxes?
Option A: Look at your mailed summer tax bill for a breakdown of property taxes
Option B: Go to https://bsaonline.com/?uid=2598 and look up your property tax history (account registration required.
Option C: Do you know your taxable value? Use this equation to calculate your City tac.
Option D: Contact the City Finance Department for assistance at 906-228-0415.
That’s less than my current tax bill, where is the remainder coming from?
The remainder is from the other taxing entities in Marquette mentioned above. If this is your principal residence (your primary home), you pay an additional 19.75 mills, for a total of 34.6007 mills. If it is not your principle residence, you also have to pay the additional 18 mill school operating millage, for a total of 52.6007 mills.
What is the proposed increase?
The City of Marquette is looking to raise an additional 2.6379 mills. This brings up the City operating millage to 17.5604 mills. For our example home with a taxable value of $80,000, 2.6731 mills is equal to an additional $211.03 per year or which is a total of $1,404.83 for 17.5604 mills.
When would this take effect?
The increase would take effect July 1, 2022 and would be incorporated into your summer tax bill. Winter tax bills will not be affected.
When was the last time the operating millage was increased in Marquette?
The operating millage has not been increased in 16 years. The millage was last increased in 2006 when it went from 14.7 mills to 15.2 mills. It was then increased to 15.3 mills before being lowered to 14.9 mills in 2010 where it has remained since.
What will the increased revenue do for the City and what does this mean for my property?
This increase means the City will be able to have a balanced budget and can continue to provide the current quality level of services that City residents expect. The increase will raise an additional $1.5 million revenue for operations.
What if I have an escrow for property taxes?
Sometimes mortgage holders overcorrect with escrow withholdings. Please contact your mortgage company to adjust the escrow to the correct amount.
Where can I see the tax rates for the rest of Marquette County?
On the County website: https://www.co.marquette.mi.us/records_and_property/property_tax_information.php
What is a brownfield development?
A brownfield development starts with a property that has a low value and is unable to be developed for a variety of reasons. This can mean it is environmentally contaminated, full of obsolete buildings, owned by a land bank, or historical. The property owner then comes up with a plan to redevelop the property and increase its taxable value significantly. A brownfield plan can then be used to capture the increase in paid taxes as a result of that development to make the development possible through something called Tax Increment Financing or TIF. These funds are used to pay back environmental remediation, demolition, public projects, and other State defined costs.
Those captured funds include taxes that would not normally come to the City such as State taxes. This means that brownfield projects can bring more money to the City that we would have received without the development and we can use State taxes to fund City projects such as public piers, City buildings, public roads, and more.
For example, imagine the following scenario:
There is a vacant/blighted property that pays $10/ year in property tax. The owner sells it to a developer who then works with the state on a brownfield plan to help demolish, remove contaminants, or create an asset for the community. They agree to a plan that will take 20 years to complete.
In those 20 years, we as the City continue to collect the $10 a year in property tax that we had always collected. But as the property tax value increases, the extra money instead of coming back to the city and the state instead pays back the developer for the costs of removing contaminants, demolishing buildings, or building a public benefit. Now at the end of the 20-year plan, this property is worth $200 a year in taxes and the city now starts to collect $200 in taxes instead of $10.
We never lost anything in this deal. This property would not have been improved without the brownfield due to the excessive cost, and had we never done this, we would still be receiving the $10/year that we had always gotten and never stopped receiving. But now, due to the brownfield they were able to improve their property, we are able to collect 200% more taxes, and it only cost us patience.
So do brownfields pay taxes?
Yes, a brownfield pays taxes, in fact it has to in order to ever receive any reimbursements. Every brownfield project in the City is paying full taxes every year. Except for the projects that have just started their development, all are paying far more than they were at the beginning of the project.
Does the City lose money on brownfields?
No, brownfield projects continue to pay the same amount of taxes to the City throughout the plan. The taxes captured by the plan are only the increased taxes that are paid as a result of the development. Without the brownfield plan, those increased taxes would never have existed. The City does not provide money to brownfield projects upfront or out of the general fund.
Why does Marquette utilize brownfield funding?
Marquette is historically an industrial city. Our lakeshore was dotted with factories, shipping lanes, fuel containers, and industry. The entire City was crisscrossed by railroad lines. These factors have made a significant portion of the City eligible to utilize brownfield funding.
Brownfield funding is also one of few ways that the City can spur direct economic development. By allowing the investment of taxes that would not exist without the development, the City is able to push for growth without relying on outside assistance from the State.