Michigan property tax elimination is the goal of a proposed constitutional amendment called “Ax MI Tax,” which would bar the state, counties, and municipalities from levying any tax based on property value and force the legislature to replace roughly $17.5 billion in annual revenue within 45 days. The measure failed to gather enough signatures for the November 2024 ballot, so no elimination is currently pending, but organizers have signaled they may try again. What follows is what the proposal actually does, what it would cost, and what would change if it ever passed.
What the Amendment Would Prohibit
The Ax MI Tax proposal is a citizen-initiated amendment to Article IX of the Michigan Constitution, the article that governs finance and taxation.1Michigan Legislature. Michigan Constitution of 1963 Article IX A citizen initiative bypasses the House and Senate: if enough valid signatures are collected, the question goes straight to voters.
The amendment would prohibit every level of government in Michigan from levying an ad valorem tax, meaning a tax calculated on what property is worth rather than a flat fee. Because the prohibition would sit in the constitution itself, no future legislature could restore property taxes by ordinary vote. Undoing it would take another statewide constitutional amendment.
Which Taxes and Levies Would Disappear
The proposal targets every ad valorem tax authorized under Michigan’s General Property Tax Act, codified at MCL 211.1 through 211.155.2Michigan Legislature. Michigan Compiled Laws 211.1 That entire framework would be nullified. The elimination covers both categories currently on the tax rolls:
- Real property: land and anything permanently attached to it, including houses, commercial buildings, and barns.
- Personal property: movable items used primarily for business, such as industrial machinery, office equipment, and specialized tools.
Every local millage funded by property assessments would go with them. That includes school operating millages, library millages, road millages, public safety millages, transit authority levies, and park and recreation millages. Analysis by the Southeast Michigan Council of Governments concluded that all millages would be eliminated 45 days after the proposal’s passage.
One category likely survives: special assessments charged to specific properties for localized improvements like sidewalks or sewer lines. Those are legally tied to a direct benefit rather than to market value, and Michigan law does not classify them as property taxes.
The 45-Day Replacement Problem
The amendment itself does not create replacement revenue. It mandates that the legislature establish one, and it gives the legislature 45 days to do it. Michigan collected approximately $17.49 billion in property taxes in 2022.3Michigan Department of Treasury. The Michigan Property Tax Real and Personal 2022 Replacing a sum that size in six weeks is an extraordinary fiscal task.
The amendment leaves the choice of replacement to lawmakers. The alternatives most commonly discussed are raising the state income tax, increasing the sales tax, or creating a new consumption-based tax. Each carries a trade-off. Sales and income tax collections swing with the economy in a way that property tax collections do not. During the 2008 recession, Michigan property tax revenue held relatively steady while income and sales tax revenues dropped sharply. Trading the state’s most stable revenue source for a more volatile one puts every future budget at greater risk during downturns.
Michigan’s balanced-budget requirement does not pause while the legislature debates. If the 45-day deadline passes without a replacement law, the state has no constitutional authority to collect property taxes and no approved substitute, and the resulting gap has no legal cure short of another amendment.
What It Would Mean for Schools
Property taxes fund Michigan schools through two channels: the 6-mill State Education Tax levied on all property, and local school operating millages of up to 18 mills paid by non-homestead property owners.4Michigan Department of Treasury. State Education Tax Together they generate billions in revenue that flows into the School Aid Fund and supports the per-pupil foundation allowance every district relies on.
The amendment eliminates both. Proposal A’s school funding formula, built to equalize spending between wealthy and poor districts, would lose its dedicated revenue source.5Michigan House of Representatives. Proposal A and Pupil Equity The legislature would have to fund not only general government but the entire K-12 system, community colleges, and intermediate school districts from whatever replacement it enacts.
This is where the practical risk gets sharp. Districts cannot stop paying teachers or heating buildings while the legislature negotiates. If the 45-day window closes without a replacement plan, districts face immediate cash-flow crises with no legal backstop.
Local Services and Outstanding Bonds
Police, fire, and emergency medical services in most Michigan communities are funded in large part by dedicated property tax millages. The proposal reportedly requires that funding for essential local services not fall below historical levels, though the specific base-year benchmarks in the petition language could not be independently confirmed from available sources.
The deeper problem is municipal debt. Michigan local governments routinely issue general obligation bonds backed by their power to levy property taxes. Unlimited-tax general obligation bonds, which require voter approval, are repaid specifically from property tax levies imposed without regard to any millage cap. If the constitutional authority to levy those taxes disappears, the revenue pledged to repay billions in existing debt goes with it.
Bond covenants typically include provisions triggered by the loss of a pledged revenue source. Credit rating agencies have flagged property tax reform proposals nationally as a risk factor for local government creditworthiness, noting that major changes to property tax collections can disrupt budgets and impair the ability to service existing debt. Michigan communities with outstanding bonds would face potential ratings downgrades, higher borrowing costs on future debt, and, in the worst case, technical defaults on existing obligations.
Where the Effort Stands
Placing a constitutional amendment on the Michigan ballot through citizen initiative requires collecting valid signatures from registered voters equal to at least 10% of the total votes cast for governor in the most recent gubernatorial election. For the 2024 cycle, that threshold was 446,198 signatures. Petitions must be filed with the Secretary of State at least 120 days before the target election.6Michigan Legislature. Michigan Compiled Laws 168.471
The Ax MI Tax campaign did not clear that threshold for November 2024. Lead organizer Karla Wagner acknowledged the shortfall publicly. Signature drives at that scale routinely cost millions of dollars when professional circulators are involved, and the effort lacked major institutional backing.
The movement has not formally disbanded. Supporters could launch a new petition drive targeting a future election cycle, but they would have to restart signature collection from scratch. Michigan’s effective property tax rate of roughly 1.2% sits above the national median, and the frustration driving the effort has not gone away even if total elimination has stalled.
Existing Ways to Lower a Michigan Property Tax Bill
Nothing about the failed amendment changes the relief already available under current law. Two mechanisms matter most for homeowners.
The Principal Residence Exemption removes up to 18 mills of local school operating taxes from the bill on an owner-occupied home. Filing the exemption with the local assessor can save a homeowner $1,000 or more per year depending on taxable value.7Michigan Department of Treasury. Principal Residence Exemption Renters and second-home owners do not qualify, but any owner-occupant who has not filed should.
The Proposal A taxable value cap protects long-term owners from sudden spikes. Even if market value jumps 20% in a hot year, taxable value can only rise by the inflation rate or 5%, whichever is lower.8Michigan Legislature. Michigan Constitution of 1963 Article IX 3 The cap resets when the property changes hands, so buyers should base their tax expectations on the uncapped value rather than the seller’s current bill.
The Federal Tax Wrinkle
If Michigan ever did eliminate property taxes, homeowners who itemize their federal returns would lose the ability to deduct those taxes under the State and Local Tax deduction. For 2026, the SALT deduction is capped at $40,400 for most filers. Michigan homeowners currently count property taxes toward that cap alongside state income taxes.
For homeowners whose total SALT claims fall well below $40,400, losing the property tax deduction means a smaller federal deduction and a slightly higher federal tax bill, which partially offsets the state-level savings. For high-income homeowners already bumping against the cap, the federal impact is negligible because they were already limited in what they could deduct. The net financial effect is positive for virtually every homeowner, but the savings are somewhat smaller than the raw property tax bill suggests.