State land issues could cost Twp.

Groveland Township could lose several thousand in tax revenues if some state lawmakers have their way.
Following the recent push to balance the state budget, state officials, including Governor Jennifer Granholm had considered cutting the “payments in lieu of taxes” (PILTs) to those local governments whose boundaries contain state land. The Michigan Department of Natural Resources manages the property and pay taxes to local governments, which include schools, townships, counties and municipalities. The payments are made to the county by the state since no individual tax payer owns the property.
A consideration was also made to sell some state land to cover the cost of the PILTs.
About 20 percent of Oakland County state land is located in Groveland Township, the most in any township. In 2001, the state paid Oakland County $1,126,642 in PILTs, according to a report from the Michigan Department of Natural Resources.
“We would prefer the land stay in the state hands,” said Robert DePalma, Groveland Township supervisor.
“Although the taxes generated by putting the property back on the tax roll would be higher, the sale would change the complexion of the area and why many people move here to Groveland. It’s a double-edged sword.”
DePalma added that about $20,000 per year is collected in PILTs with $5,000 received by the township and $15,000 going to the fire department coffers.
The PILTs are based on two formulas: if the state buys the land they pay tax on just the property, any structure on the property is not taxed. The property is taxed at the state assessed value. If the state receives the property as tax reverting or a gift from an individual then no taxes are paid.
“If this property is sold off, then it will just increase the public services required in the township,” said Ron Lapp, Brandon Township Supervisor.
While the state was able to cover their PILTs in 2002, rumblings of selling land and cuts in payments are already starting for 2003.
“The question came up again, ‘Why not just sell land?’”said Kelli Sobel, Deputy Director for administration of the DNR.
“The DNR opposes selling land just to pay taxes. A much better plan is just restructure the way the PILT is paid out to the municipality.” Last year the state was $1.5 million short, says Sobel. Even if we sell we’ll still be a few million short next year.
“We have to sell one million acres to gain 2 million dollars.”