Gogebic County equalization increases

By TOM LAVENTURE

tlaventure@yourdailyglobe.com

Bessemer — An increase in development and real estate sales was credited in part for an increase in assessed value, according to the 2021 Equalization Report that was approved by the Gogebic County Board of Commissioners on Wednesday.

The compilation of agricultural, commercial, industrial, timber and residential valuations among nine county taxing units that are used to fund county services was assessed at $7,801,943 for 2021, which is a 3% increase over 2020, according to Kathy Jo Koval, county equalization director. The tentative taxable value of $566,713,519 is also a 3% increase over 2020, she said.

“Keep in mind that today we’re confirming assessed values and not taxable values,” Koval said. “Our revenue is based on taxable value and capturing that on the millage.”

Based on tentative values not yet approved by the Michigan Tax Commission, Gogebic County would capture $3,757,115 on taxable value, which is an additional $81,677 in operating dollars, she said.

Koval cited several examples of changes that impacted county assessed value across the classes and taxing districts. She said the residential valuation, which typically trails the other classes, is now fairly consistent.

Ironwood Township had a substantial increase with new construction and numerous improvements to existing properties, she said. Watersmeet and Marenisco both experienced new housing and low interest rates were credited with Erwin Township having one of its “busiest years ever” with new home construction, she said.

Real estate sales are strong with competitive offers in excess of asking prices on several properties, Koval said. This could result in bringing up the overall property values in the following year.

Commissioner Dan Siirila expressed concern that real estate sales might be inflated and result in a bubble that leads to property tax increases.

Koval said the difference is taxable value only increases at the rate of inflation, unless the property is improved. The assessed value could increase and that is what this study is about, and the goal now is to capture property taxes as new valuations occur on properties that haven’t been resold in many decades.

In another matter, the board approved a letter to be sent in support of the Michigan Association of Counties efforts to recover approximately $110 million in county revenue sharing funds for 60 counties that accrued between 2009 and 2014.

A 2009 agreement had counties using a reserve fund from property tax revenues to reduce the revenue sharing amounts from the state general fund in the state’s response to the “Great Recession” of 2009, according to a letter from Deena Bosworth, director of governmental affairs for the association of counties. The counties were to each return to revenue sharing when they exhausted their reserves.

Gogebic County returned to the revenue sharing cycle in 2012 and is due approximately $338,841, according to the Bosworth letter. The state was required by statute to pay the counties their full funding as they reentered the system.

The association contends the funds are a cumulative shortfall of the Michigan Department of Treasury’s annual revenue sharing agreement and that the optimum time to urge legislators to allow a one-time payment of money owed to the counties is when the state receives approximately $10.3 billion from the federal American Rescue Plan.

In other business, the board:

—Withheld transfer of third-quarter fiscal year appropriations to the Gogebic-Iron County Airport capital outlay fund and airport operating fund until the airport provides its quarterly report.

—Approved bylaw changes of the Community Mental Health Authority Board that were recommended from the annual organization meeting of the authority board and its executive director.