Financial Reporting

Property Taxes

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Property Taxes

The largest share of the General Fund revenues comes from the property taxes. Property taxes are
a critical source of revenue for the City of Ann Arbor, as well as neighboring communities. Many Ann Arbor taxpayers are surprised to learn that approximately $0.245 of every dollar paid in property taxes
goes to the City of Ann Arbor to fund vital services. Most of the receipts of property taxes are various education agencies including the Ann Arbor Public Schools, Washtenaw Intermediate Schools, the
State of Michigan and Washtenaw Community College – comprises approximately $0.53 of every dollar paid in property taxes.  The following chart depicts where the city’s property tax dollars are distributed:

FY19 Dollar Bill.jpg

During the last three decades, there have been two State of Michigan constitutional amendments –
the Headlee Amendment of 1978 and Public Act 415 of 1994 (commonly known as Proposal A) – and
other related statutory changes that have impacted property tax revenue for local governments. During 
fiscal year 2008, the Headlee rollback started reducing the general operating levy. 

In addition to the General Operating millage, the city’s General Fund collects money from the
Employee Benefits and Ann Arbor Area Transportation Authority (AAATA) millage. The remaining
millages are assessed for dedicated purposes and are used to finance the activities of those
dedicated funds.