LANSING, Mich. — State Sen. Goeff Hansen introduced legislation on Tuesday that would provide tax relief to Michigan municipalities.
Senate Bill 1042 would repeal the homestead property tax exemption for disabled veterans and replace it with a credit on the homestead property tax.
“Current law provides our disabled veterans with significant and much-needed financial relief, but at the expense of local units of government, which are required to incur any revenue loss,” said Hansen, R-Hart. “This tax credit will continue to provide our disabled veterans with tax relief, while also giving local leaders the resources they need to govern their communities effectively.”
Hansen said that under current law, real property used as the homestead of an eligible disabled veteran is exempt from property taxes. With more than 10,000 exemptions currently being claimed in Michigan — a higher utilization of the exemption than expected — communities with large populations of eligible disabled veterans are facing significant financial losses.
“It is good that we provide this tax relief to disabled veterans, but the expense should be borne by the state, not local units of government,” Hansen said. “These local revenue losses represent money that could have been designated for infrastructure improvements or public safety.”
SB 1042 has been referred to the Senate Committee on Finance.