What is the impact of the Headlee Amendment on property taxes?

The Headlee Amendment has a significant impact on property taxes in Michigan by imposing limits on the total revenue that municipalities can collect from property taxes. Enacted in the late 1970s as part of a broader tax reform movement, the amendment specifically aims to control the growth of property tax revenue. It establishes a cap on the amount that property tax revenue can increase each year, which is tied to the rate of inflation or the rate of growth of property values, whichever is lower.

This means that even if property values rise, municipalities cannot automatically raise property taxes to match that increase without adhering to the limitations set by the Headlee Amendment. The intent behind this limitation is to protect taxpayers from excessive tax increases and to ensure a more predictable and stable revenue environment for both residents and local governments.

The other options suggest scenarios that are not aligned with the purpose or provisions of the Headlee Amendment, as it fundamentally seeks to restrict rather than enhance tax revenue and valuations.