Detroit Mayor Mike Duggan’s plan to implement a Land Value Tax continues moving forward, albeit with a new timeline.
Since May 31, when Detroit Mayor Mike Duggan unveiled a plan to introduce a Land Value Tax, Michigan tongues have been wagging furiously. Declaring the current Detroit tax structure as “the biggest obstacle in the city’s ongoing transition from Blight to Beauty,” the mayor pointed to the gross inequity that sees a Detroit homeowner with a well-maintained $200,000 house pay more in taxes than someone with a vacant home or land owner who hordes 22 acres of land in the city and does nothing with it.
Passing and implementing this new plan would mark a significant step forward for Land Value Tax, as Detroit would become the first major city in the world to adopt such a tax plan. It would also make Detroit a test case for other cities, municipalities, and even states with similar inequities in homeowner taxation and harmful land speculation to consider and implement their own potential plans.
While interest in Detroit’s plan is high, passage through the Michigan Legislature will take time—more than initially envisioned by Duggan. Originally, the plan was to be put to a city-wide vote in February 2024, with implementation starting in 2025. It’s now being considered for November, instead. That’s supported by Detroit Council members such as Gabriela Santiago-Romero, who stated, “I believe a good portion of us don’t feel comfortable putting this on the ballot for February. But there’s been discussion about potentially putting it on in November which I am more comfortable with given that would allow for discussion questions, deliberations, any amendments.”
Another change has been implementing an out clause, the Michigan Legislature added a provision that would allow the Detroit City Council to reverse the Land Value Tax plan if it deemed it “unworkable.” This is not without recent precedent, as Altoona, Pennsylvania scrapped its land value tax in 2016 after just five years, citing limited incentives and impact, as well as a general poor understanding of the law.
There’s also the fact that it’s not just one bill that needs to pass for the tax plan to be realized, but several. The entire plan includes bills HB 4966, HB 4967, HB 4968, HB 4969, and HB 4970, which cover taxation rules for various land-use scenarios, such as side lots, vacant lots, scrap yards, and new and expanded developments.
Another hurdle is the question of how land value will be assessed. This is a particular bugaboo for Detroit, as the assessor systematically—and illegally—overvalued the homes of the poorest residents, then tacking on 18% interest when people could not pay. Although changes in values and assessments since have made this less a problem today, a legacy of distrust remains and influences views of the Land Value Tax plan. Theo Pride, an organizer with Detroit People’s Platform and Detroiters for Tax Justice put it more bluntly: “We don’t trust the administration. We don’t trust the city government to properly and fairly and equitably assess the land,” he said. Attempting to defray these concerns, the Office of the Chief Financial Officer has made it clear that additional budget will be provided to the assessors office to support implementation of the land value tax plan.
Thankfully, education offers a way to assuage fears, many of which are based on a false understanding of the plan and Land Value Tax generally. “There’s a lot of reaction that just comes from a place of not understanding it,” echoes Alex Alsup, who covers the issue for Detroit Free Press and his Substack page. “Putting this in a way that people can understand and digest is really, really important,” he adds. Indeed, lawmakers like State Rep. Kimberly Edwards D, who voted against the bill, noted their own need to learn more about the plan before voting. In an email to BridgeDetroit, she wrote, “It’s essential to gather data, consider expert opinions, and assess the potential benefits and drawbacks of any policy before taking a stance or casting a vote.”
As outreach efforts continue to discuss concerns and highlight benefits — especially a 17% tax cut to tax bills, on average — there’s hope passage of the bill should ease. Supporters seeking help with making a convincing argument might look to noted Georgist economist Mason Gaffney, who wrote that Detroit’s golden age of manufacturing in the 20th century came in part due to a progressive tax system on Georgist principles — “and could again.”