By By JOHN EBY / Dowagiac Daily News
With state revenue sharing cuts surpassing $200,000, Dowagiac can no longer resist charging administrative fees to collect taxes, even though that has been the prevailing practice in Michigan.
The city assessing a 1-percent administrative fee on taxes collected was raised at the Jan. 26 meeting by John Cureton, retired WDOW news director.
Cureton said before Dowagiac City Council Monday night that response to his remarks has been universally favorable.
Mayor Donald D. Lyons asked City Manager William H. Nelson Jr. at the last meeting to provide a report for the council's consideration detailing background of the issue.
Nelson furnished his memo to Cureton. "I haven't had time to digest it yet," Cureton said, "although just offhand it looks to me like overkill as far as what I particularly proposed."
The Michigan General Property Tax Act 206 of 1893 as amended allows collection of a property tax administration fee to "offset costs incurred by a collecting unit in assessing property values in collecting the property tax levies, and in the review and appeal process."
In addition, Public Act 331 of 1993 allows an administration fee to be assessed when local governments collected taxes on behalf of other units of government.
It is common, for example, for cities to collect administration fees on behalf of school districts.
Most cities began applying a 1-percent fee to tax collections many years ago, but the City of Dowagiac held out.
Within the last couple of years, the state Legislature adopted Public Act 243 of 2002, which requires that local governments begin collecting the six-mill state education tax.
The city manager said results of that research indicated:
In further analyzing the situation from a financial perspective, Nelson said, it was determined that: