City Hall COLLEGIAN | (Photo: Wiki­media)

Hillsdale City Council adopted state-man­dated poverty exemption 2019 guide­lines,  allowing home­owners who meet federal poverty income guide­lines to receive property tax relief.

“Given the makeup of Hillsdale, it’s ben­e­ficial for the people who live here,” Ward 4 Coun­cilman Ray Briner said. “It helps a variety of people stay in their homes, and in Hillsdale.”

The city of Hillsdale’s poverty rate in 2016 was 30.5 percent, but that number doesn’t accu­rately reflect the real poverty in the city. Stu­dents often fall below the poverty line, as census data doesn’t account for any assis­tance they might receive from rel­a­tives. Further dragging the sta­tis­tistics down is the location of low-income housing devel­op­ments in the city, according to Hillsdale Assessor Kim Thomas.

Only one household claimed the poverty exemption in 2018. The City lost $21,744 in taxable value; or roughly $850 in tax revenue when split between the City, County, Inter­me­diate School Dis­trict, and Hillsdale Com­munity Schools.

Only a few house­holds usually claim the exemption each year, and rarely do house­holds repeatedly use the exemption, Thomas said.  

“Most of our low income people either rent homes here, or they are in the lower income housing,” Thomas said. “Usually they are not property owners, they don’t have property taxes to pay, so there is nothing for them to apply for.”

During hard eco­nomic times, the number of appli­cants tends to jump. In the Great Recession, six people requested the exemption.

“The exemption hasn’t been a big dis­cussion item,” Ward 2 Coun­cilman Will Mor­risey said. “But it’s a sig­nif­icant thing for the res­i­dents to have this property exemption. If the exemption didn’t exist, I’d expect some more people to lose their property. There would be fore­clo­sures, and market forces would kick in.”

Usually res­i­dents request exemp­tions after getting sick or being widowed, espe­cially if they weren’t the primary bread­winner of their fam­ilies, Thomas said.

“In my expe­rience, it is usually cases where there was an unex­pected illness, where people who had been working sud­denly needed a tem­porary assis­tance so they could keep up with their property,” Thomas said. “We’ve had cases where people had cancer, and while they were seeking treatment, they weren’t able to work. Or, their spouse has to take time off work to care for them, so their income drops.”

The City Council also expanded the property tax exemp­tions for dis­abled vet­erans in 2013, and seven vet­erans used the exemption in 2018.

“I’m sure that for the people who request the poverty exemp­tions, it’s extremely important,” Thomas said. “Even when you read the description of the exemption in the state law, it’s limited to people who are in des­perate sit­u­a­tions.”

The Michigan State Tax Com­mission requires Hillsdale City to approve the guide­lines each year, thereby setting the stan­dards by which the city’s assessor and Board of Review weigh requests for property tax exemption.

“In Hillsdale County, there is quite a bit of gen­er­a­tional poverty,” said Clint Brugger, manager of the Hillsdale County Com­munity Action Agency. “It’s quite dif­ficult for people to nav­igate them­selves outside of that, so those are extremely important because they help fund some issues that keep people from moving towards self-suf­fi­ciency.”