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Coalition: Nessel will issue opinion on possible cash compensation for over-taxed Detroiters

detroit homeowners file a lawsuit against the city for property tax over assessment
Sarah Cwiek
Michigan Radio
Detroiters protest against over-taxation and demand compensation at a 2020 City Council meeting. (File photo)

A group representing Detroit homeowners who paid illegally-inflated property taxes said it’s gotten a much-wanted pledge from Michigan Attorney General Dana Nessel.

The Coalition for Property Tax Justice said Nessel told them she would issue a legal opinion on whether the city can compensate those homeowners in cash or with property tax credits. The Coalition said that’s the appropriate way to redress historical property over-assessments that led to over-taxation, which helped fuel a wave of tax foreclosures in Detroit. According to one estimate,Detroit property owners were over-taxed by a collective $600 million between 2009-2015.

Detroit Mayor Mike Duggan’s administration has maintained that those forms of compensation would violate state law. Lawyers for the coalition and other groups disagree, and they want Nessel to weigh in.

Marie Sheehan, an attorney with the group Street Democracy and a member of the coalition, said the legacy of over-taxation has led to permanent harms, such as people losing their homes. “A part of making that right isn't just acknowledging the problem, but it's making some effort to give back what was taken,” she said.

The Detroit City Council is currently crafting an ordinance exploring ways to compensate affected homeowners. Sheehan said Nessel’s opinion is “super important” to council members’ deliberations. “It will allow them to decide whether to include these compensation options in the ultimate ordinance that they draft or not,” she said.

“The opinion from the attorney general is critical. It will allow city council to shape the ordinance to compensate Detroiters to the fullest extent permitted by state law,” added City Council President Mary Sheffield, who attended the Monday meeting with Nessel.

The Coalition said Nessel’s office is already researching the issue, and that she pledged to issue a legal opinion within 90 days, assuming she remains in office. Nessel is up for re-election next month. Her office did not respond to requests to confirm the coalition’s statements.

Sarah Cwiek joined Michigan Public in October 2009. As our Detroit reporter, she is helping us expand our coverage of the economy, politics, and culture in and around the city of Detroit.
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