FOR IMMEDIATE RELEASE CONTACT: John Truscott
February 3, 1998 (517) 335-6397

Proposal A Tax Cap Saves Working Families $492 Million in 1997

Working families in Michigan saved $492 million in property taxes during 1997 as a result of the assessment cap thanks to Proposal A, Governor John Engler announced today.

"Before Proposal A, working families were struggling with double digit assessment increases," Engler said. "We put the brakes on rising property taxes, so families can keep more of what they earn."

Residential and agricultural property owners saved $397 million in 1997. Commercial, industrial and personal property owners saved $95 million.

"These numbers offer clear evidence that Proposal A is working for Michigan families," State Treasurer Douglas B. Roberts said. "That is precisely what Proposal A was designed to accomplish."

Total state equalized valuation (SEV) in Michigan, which represents 50 percent of the value of all property in the state, increased by 8.1 percent during the past year. However, growth in the amount of the base on which the property tax is levied, or taxable value, has been limited to the rate of inflation except where there has been a physical change to a property or until the property is sold.

The difference between SEV and taxable value was $13.9 billion during 1997. This represents the huge increase in property values in Michigan -- one of the nation's hottest real estate markets -- because of Proposal A.

In 1998, taxable value property assessment increases will be limited to 2.7 percent.
In addition to the cap, Michigan homeowners have benefitted from an average reduction in school property taxes of nearly 80 percent.
Michigan taxpayers have saved more than $8.5 billion since Governor Engler launched the Taxpayers' Agenda in 1991, a net savings of $2,000 for the average family.

Since 1991, Governor Engler signed into law 24 tax cuts, including the biggest tax cut in Michigan history-- Proposal A.
On Thursday, the Governor proposed yet another tax cut in his State of the State message. The $3 billion tax cut will bring the state's income tax to the lowest level since the early 1970s.