In a spectacular display of callous unconcern, the City of Detroit has overtaxed its homeowners by over $600 million during the past 10 years.
According to investigative reporting by The Detroit News, Wayne county tax assessors simply stopped reassessing homes as market prices fell. Anna Bolden bought a lovely brick bungalow at a tax foreclosure auction for $4,800. When her tax bill came in, she found out why the house had been foreclosed: the city was charging taxes on a house worth $57,000. “I went down [to city and county offices] to ask questions, but it’s like everybody is giving you the runaround,” she said. “It makes you feel like they are cheating you…but what can you do?”
Although some homeowners managed to pay their inflated tax bills, at least 59,000 homes still have tax debts totaling $153 million dollars—including interest and fees on their fraudulent debts. There is a process to appeal the tax bills, but it’s a long and complicated process, and many don’t even know it exists. About 28,000 people have already lost their homes to the government over the excessive taxes. The ACLU of Michigan and the NAACP Legal Defense and Education Fund sued to stop the tax foreclosure auction in 2016, but a judge ruled that the Michigan Tax Tribunal had oversight rather than the court—essentially claiming that this injustice was not his problem.
Despite low-interest repayment programs put into place by the government, many citizens feel that more should be done. However, city officials report that they are not allowed to simply eliminate the tax debt—even when the amount people were overcharged is more than the debt the currently owe. Nor are they allowed to retroactively apply poverty tax credits that people qualified for but were not aware of in previous years.
Of course, simply forgiving the tax debt that should never have been levied in the first place is out of the question for the government. City and county officials have argued that forgiving overtaxed residents who have not paid their taxes would be “unfair” to those who have paid. Naturally, the same officials have made no effort to address the unfairness faced by those who have lost their homes due to the overtaxing. However, the former Chair of the State Tax Commission Doug Roberts admitted that “Nobody paid as much attention as we should have. We should have [intervened] sooner.” Roberts also stated that the Detroit News’ findings are a “compelling case” and the government should “resolve the issues as equitably as possible.”
“That’s what government exists for,” Roberts said. Whether the government exists to belatedly correct a problem that it created and then ignored for years while tens of thousands of people suffered, you can judge for yourself.