State swamped by homeowner appeals of taxes, assessments

State swamped by homeowner appeals of taxes, assessments

Catherine Jun / The Detroit News

LIVONIA -- Seeing empty houses and "For Sale" signs around his neighborhood, Jaroslaw Siemieniak swears the assessment on his home -- and his property taxes -- were too high last year.

Last spring, he convinced a three-member tax board at Livonia City Hall to lower his assessment, but not enough to reduce his taxes. So the 48-year-old engineer decided to appeal to the next higher power: the Michigan Tax Tribunal.

That was eight months ago. Siemieniak is still waiting.

"I haven't heard anything yet," he said Friday.

Siemieniak is not alone. The Michigan Tax Tribunal is still chipping away at an overwhelming backlog of appeals from last year, and now it's bracing for another flood of appeals this summer from this spring's round of disgruntled homeowners who failed to get their property assessments changed at their local boards of review. With many cities reporting record numbers of assessment challenges, the tribunal has tried to reduce the overflow. It has hired extra workers and encourages homeowners to appeal by phone, but the backlog continues to grow. An expected record number of appeals means property owners who appeal this year will likely not get a hearing until fall 2009.

"We'd like it to be shorter, but with the volume and everything it's just not possible," said Judge Patricia Halm, chairwoman of the tribunal.

In this slumping housing market, homeowners have been turning out in droves to formally protest their assessments, many baffled about why their assessments are not falling as fast as home prices.

And many grumblers are perplexed by taxes that go up as assessments come down, a paradoxical effect of a 1994 state law, Proposal A.

"Either they don't understand that, but even when they do understand it, they don't like it and want to talk to somebody about it," said Philip Mastin III, assessor for the city of Warren, which is fielding an 80 percent increase in property tax challenges this year over last.

Last year, Lansing received nearly 10,000 appeals, almost double the number in previous years, and that doesn't include appeals on commercial or industrial properties. That's the most since 1994.

With about 6,000 cases pending, what was once a six- to nine-month wait for a hearing has now lengthened to well over a year. Then there's another two- to three-month wait for a decision.

"We pretty much had our heads above the water until last year," Halm said.

In an attempt to manage this year's expected deluge, the state is requesting additional judges to hear cases and will likely hire extra summer staff to process requests and mail notices.

State officials warn that property owners awaiting a scheduled hearing or decision should still pay their taxes according to their bills, or face late fees, accrued interest payments and, if nonpayment continues, foreclosure.

Once the tribunal renders a decision that revises the taxes, the property owner gets a refund with interest.

But that is little consolation for Willard Lindley.

An attorney from Livonia, Lindley is still waiting for a hearing date on his two appeals -- from 2006 and 2007 -- on what he says is a bloated assessment on his two-story home.

"It is frustrating because I expect that I'm going to get a substantial refund and this is like a free loan to the state or to the city," he said. "I would just like my money back."

Proposal A was designed to protect homeowners from dramatic property tax hikes in robust housing markets by pegging tax increases to a more modest rate of inflation. This year, that is 2.3 percent.

But depending on when the home was purchased, in a declining market like this one, even dropping home values can call for a tax increase.

"It seems counterintuitive," said Paul Turner, 43, who believes the assessment on his home in Beverly Hills should have plunged more than it did, leading to a tax break.

"There's a huge chasm between reality and what they're willing to assess my property."

He made his case before the local board at the Southfield Township office on Thursday and vowed that if his assessment wasn't lowered, he would appeal to the state this year.

"It's getting to the point that I'll have to make the next step."