LANSING, Mich. — A citizen-led campaign known as AxMITax is aiming to dramatically reshape Michigan’s tax structure by eliminating all property taxes for homeowners and businesses. Supporters say the measure, if approved, would offer significant financial relief and promote fairness in taxation. Critics warn it could devastate the state’s public services and local economies.
The proposal would amend the state constitution to end residential and commercial property taxes, replacing the lost revenue with a greater share of state-level taxes sent to local governments. Under the plan, the percentage of state sales tax allocated to local governments would rise from 10 percent to about 13 percent, with counties receiving approximately 6.7 percent. An additional 10 percent of income, marijuana, alcohol, and tobacco tax revenues would also be distributed locally.
The measure further requires a 60 percent majority of local voters to approve new local taxes and a two-thirds majority in the Legislature for any state-level tax increases.
After failing to collect enough signatures to qualify for the 2024 ballot, organizers relaunched the petition in April 2025. They have 180 days to gather roughly 600,000 valid signatures to secure a place on the 2026 ballot.
History of the Property Tax in the United States and Michigan
National Origins
Property taxes are one of the oldest forms of taxation in the United States, with roots in the colonial era. In the 1600s and 1700s, many colonies taxed land and certain personal property such as livestock, tools, and household goods to fund local governments, churches, and militias. By the mid-1800s, property taxes had become a primary revenue source for states and municipalities nationwide.
At the federal level, the United States government has never relied on property taxes as a primary funding mechanism. Instead, the federal role in property taxation has been limited to legislation affecting local tax systems, court rulings on tax fairness, and federal programs that indirectly influence local revenues such as grants tied to education and infrastructure. Property taxes remain fundamentally a state and local matter.
Property Tax in Michigan
Michigan’s property tax system dates back to the early 19th century, shortly after statehood in 1837. Initially, property taxes were the main revenue stream for funding schools, local infrastructure, and county services.
Over the years, Michigan voters have approved several constitutional and legislative changes that shaped the modern property tax landscape:
- 1978 – Headlee Amendment: Limited local governments’ ability to increase property taxes without voter approval and required the state to maintain certain funding levels for local services.
- 1994 – Proposal A: Shifted much of school funding from local property taxes to the state sales tax, lowering property tax rates for many homeowners while increasing state oversight of education funding.
- Recent Trends: Property taxes continue to fund a significant share of public services, especially for K-12 education, community colleges, libraries, police, fire, and local infrastructure. In most Michigan communities, they represent between 40% and 70% of local government revenue.
These historical layers mean that in Michigan, property taxes are deeply embedded in the structure of local government finance. Eliminating them, as the AxMITax proposal suggests, would mark the most significant change to the state’s revenue system in more than a century.
The Case for AxMITax
Proponents argue the initiative would deliver immediate and substantial tax relief. One supporter estimated savings of about $7,200 annually on their own property taxes. They say shifting to a consumption-based tax system is more equitable, since people would only pay for the services they actually use.
The campaign also highlights the issue of property tax foreclosures, which affected roughly 184,000 property owners in Michigan in 2023. Eliminating property taxes, supporters contend, would help prevent residents from losing their homes over unpaid taxes.
The Case Against AxMITax
Opponents, including educators, local government leaders, and business groups, warn that the plan could strip more than $17 billion annually from the budgets of schools, public safety, libraries, community colleges, parks, and other local services.
Public schools alone could lose nearly $10 billion a year, potentially triggering layoffs, program cuts, and even closures. The Michigan Library Association has cautioned that most public libraries would have to close, as 75 to 95 percent of their funding comes from property taxes. Community colleges, which depend on property taxes for about 40 percent of their budgets, could also face shutdowns.
Critics also point to the initiative’s supermajority requirements for raising taxes, arguing that they would make it nearly impossible for local governments to restore services once cuts occur, leaving communities dependent on limited state-controlled allocations.
AxMITax Local Impact
Here’s a localized example showing how the AxMITax initiative might play out for a resident in the Montague–Whitehall area, with both the benefit and downside considered.
Example: The Johnson Family in Whitehall Township
Background:
- Married couple, mid-50s
- Two kids: one in middle school, one at Montague High School
- Own a 3-bedroom home with an annual property tax bill of $4,200
- Regularly use local services: public schools, White Lake Community Library, local parks, and police/fire protection.
How Could it Help?
- Immediate savings: The Johnsons would no longer pay the $4,200 in property taxes, freeing up about $350 per month in their household budget.
- Financial flexibility: With that extra money, they could pay off debts faster, build an emergency fund, or invest in home upgrades.
- Security from tax foreclosure: If one spouse lost their job, they wouldn’t face the risk of losing their home because of unpaid property taxes.
- Ownership stability: Knowing their home is free from annual tax obligations might make retirement planning less stressful.
How Could Hurt?
- School funding cuts: Montague and Whitehall Public Schools rely heavily on property tax revenue. Reduced funding could mean larger class sizes, fewer extracurricular programs, outdated technology, and possible staff layoffs, directly affecting their children’s education.
- Library closure risk: The White Lake Community Library receives most of its funding from property taxes. Without it, the library could shut down, removing a key resource the Johnsons use for books, study spaces, and community programs.
- Public safety concerns: Local police and fire departments might see budget cuts, potentially leading to slower emergency response times.
- Long-term property value: If schools decline and public services disappear, the desirability of the area could drop, affecting home resale value in the future.
Balancing Relief and Risk
Whether AxMITax is good for Michigan depends largely on priorities. Supporters see it as a pathway to lower costs of living and greater personal freedom. Opponents see it as a threat to the state’s educational system, community services, and economic stability.
The measure’s future now rests on whether organizers can collect enough signatures to bring the question to voters in 2026 — and whether Michiganders are willing to trade property tax relief for a new way of funding the services that shape their communities.
