CHAPTER IIIC - ECONOMY
C. STATE EQUALIZED VALUE FORECASTS
Kalamazoo's economic base and region-serving social and economic functions have resulted in substantial quantities of land being used for non-real estate tax paying purposes. Property tax forgiveness, tax abatements, and a special formula applied to some subsidized housing units further reduces the real property tax base. Once the City's land use plan is prepared, the future allocation of land uses will be recommended. To the extent that these recommendations address non-tax paying uses and assisted housing land requirements, they can be bases for refining these draft forecasts.
1. Historic Property Values
From 1970 to 1996 the City's state equalized property values declined from roughly $1.5 billion to $0.9 billion, in constant dollars. See Table III-15. This 59 percent decline is attributable to a number of factors:
- Suburban areas being more competitive for new development than the City.
- Increase in the number of properties having below market value assessments.
- Reduced value of structures built or rehabilitated before 1970.
- Increase in properties taken off the tax roll for various public purposes.
The Upjohn Institute's Kalamazoo City employment and population forecasts show that about 4,000 more jobs and 400 more people are expected to be accommodated during the 20-year period ending in 2015. In spite of this anticipated growth, the City will continue to lose its competitive edge when compared to County forecasts. During the 1995 to 2015 period, the City's share of jobs located in Kalamazoo County will decline from 47.5 percent to 45.6 percent. A comparable relative decline is forecasted for the City - County population ratio -- from 34.7 percent in 1995 to 32.5 percent in 2015. Thus, the City will continue its role as a job center but will not be as competitive for population -- attracting about 2 percent of the County's population growth from 1995 to 2015.
From 1970 to 1995, the City's share of the County's state equalized value declined form 38.6 percent to 23.5 percent.
2. Projected Property Values
Assuming the City's state equalized value's 1990 to 1995 increase was gradual, the estimated 1995 value was $907.3million. The number of jobs is forecasted to increase by 5.8 percent and population by 0.5 percent during the 1995 to 2015 period. In 1996, some 57.9 percent of the City's state equalized value was residential and the remainder was job based. However, the forecasts indicate the tax base growth will be more heavily weighted toward the job share of real estate development, the basis for property assessments. Thus, the estimated tax base growth will be $36.9 million above its 1995 level, a 4.1 percent increase. If employment or population forecasts are not achieved or if more real property becomes tax exempt, this tax base increase will be reduced.
Because the employment forecasts show steady growth to the year 2015 and population forecasts will decline to 2015, the tax base growth will be slow for the first 10 years and increase more rapidly thereafter. Property value forecasts, shown in Table III-16, indicate the residential and non-residential components of the tax base by five-year intervals to 2015.