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Saginaw officials press state bill to remove citys 1979 dollar tax cap
Summary
City finance director told council a $3.8 million dollar cap written into the 1979 charter keeps Saginaws property tax revenue flat despite rising property values; city staff recommended supporting House Bill 4,121 to remove the dollar cap while leaving the millage limit intact.
Saginaw finance director Lori Brown told the City Council on Tuesday that a dollar cap on property tax revenue written into the city charter in 1979 keeps the citys revenue flat even when taxable value rises. "We are allowed to levy up to 7.5 mills or $3,800,000 whichever is less," Brown said, and she added: "The 3,800,000 is a hard dollar cap and does not increase at the rate of inflation." Brown said the cap was fixed at 1978 revenue levels when voters approved changes in 1979 and that the Headley Amendment forced the citys millage down to 7.383 mills in 1997.
The finance director described the mechanics and the local impact: without the dollar cap the city would have collected about $4.45 million in 2025 property tax revenue rather than the $3.8 million it levied under the cap, a roughly $632,000 difference. Over the past 46 years, Brown said, the cap has kept the city from collecting roughly $29 million in property tax revenue, an average loss of about $630,000 per year. Brown framed the immediate budget impact as modest: an extra $600,000 a year would be about 1.3 percent of the city's ~$45 million general fund and "does not create a huge windfall for the city," she said.
Why it matters: Brown and city administration recommended the council support state legislation, House Bill 4,121 (2025), sponsored in the House by State Representative Amos O'Neil. The bill would prohibit a local unit from imposing a revenue (dollar) cap on property taxes; it would remove the $3.8 million dollar cap while leaving the charters millage cap (7.5 mills) in place, the presentation said. City Manager Morales and staff asked council members to agree on talking points and an education plan to explain what lifting the cap would and would not do.
Council and public reaction: A number of residents and council members spoke in favor of removing the cap in public comment and during council discussion. Resident Salim Mannan said the cap had "put a terrible harm on our community" and urged its removal. Council members asked staff to post the full presentation, a recorded video, and to produce standardized talking points for use in public outreach. Staff said the longer recorded presentation will be posted on the city website and SGTV and that council can provide edits to a draft of talking points.
Limits and clarifications: Brown emphasized the cap is a fixed dollar amount that does not adjust for inflation or growth. She also noted that the Headley Amendment (state law) still requires millage reductions when taxable value grows faster than inflation and that the proposed legislation does not change millage caps. Brown warned that any additional revenue could be absorbed by rising personnel or operating costs and that the city could not promise specific new services in exchange for lifting the cap.
Next steps: Staff will post the recorded presentation and draft talking points online and council members were asked to return comments so staff can finalize an education package. No formal vote to endorse legislation was recorded at the meeting; council discussion focused on approving outreach materials and coordinating messaging.
