Bay City officials consider tiered property-tax hardship exemption to help homeowners in poverty

City Assessor Wade Slivick and the assessing office presented a proposal on Feb. 16 to expand Bay City’s poverty-exemption program, which reduces the taxable value of owner-occupied homes for households at or below the federal poverty level.

At the commission meeting, Slivick said the city is seeing an unusual 14% jump in residential market growth from 2024 to 2025 and that the assessing office identified roughly 300 homeowners in poverty who could be affected. “People under the federal poverty level receive a 25% discount on their taxes every year,” Slivick said, describing the current policy and the proposing office’s recommendation to increase that reduction to 50% for households at or below the poverty threshold and keep a 25% reduction for households up to 150% of the federal poverty line.

Selena Christopher, a city appraiser who compiled the data, told commissioners the program is aimed at owner-occupied residences only and requires annual application and income and asset verification. She noted the city currently receives few applications—about 11 in 2025, which equated to roughly $5,000 in tax relief that year—and that outreach has been difficult: many eligible residents learn about the exemption only when facing foreclosure.

Commissioners pressed staff on the program’s flexibility and fiscal impacts. Commissioner Cubitt asked whether the Commission could allow case-by-case discretion, including a potential 100% exemption for the most dire cases. Slivick said local policy could be amended to allow a 100% local exemption, but he warned that a homeowner who pays no local taxes would not receive Michigan Homestead Credit reimbursements from the state. “If they’re 100% exempt from the local unit taxes, you will not receive any money back from the Homestead Credit,” he said, explaining the tradeoffs and urging a balance between assistance and fiscal sustainability.

City staff estimated the proposed tiered exemption would reduce the city’s taxable revenue by about $25,000 per year. Commissioners asked whether ARPA funds or other short-term grants could be used to address immediate needs; staff said ARPA can help with delinquent bills but cannot reimburse a routine exemption program.

After discussion, the Commission moved the fiscal-exemption item from the consent agenda to the regular agenda. A motion to approve the program was made, and then Commissioner Cubitt moved to refer the measure back to staff with direction to explore slightly greater discretion and clarify fiscal impacts; that referral passed without objection.

The Commission did not adopt final language or a formal amendment at the Feb. 16 meeting; staff will return with revised draft language for the Commission to consider.

What’s next: Staff will rework the proposed resolution to include requested clarifications on discretionary authority and the fiscal impact estimate and return the draft to the Commission for a subsequent vote.