MI: Oakland County added to bill eliminating transit tax opt out option

A last minute change to a House bill eliminating opt out allowances for transit tax votes in Wayne County would expand the legislation to also eliminate opt outs in Oakland County communities.

A bill substituted on the House floor Tuesday evening changed the population threshold for those counties eligible for the change from 1.5 million people — Wayne County's population — to 1.1 million people — Oakland County's population — and eliminated a five-year cap on potential millages. Instead, the transit authority calling for a vote on a transit millage would set the duration at the time it went before voters.

Oakland County voters have not used the law creating a transit tax authority because of its allowances for opt out communities. Instead, Democratic leaders including County Executive Dave Coulter worked around the law in 2022 to pass a countywide millage that would be administered by the county, not a transit authority.

In 2022, Oakland County voters approved a 0.95-mill, 10-year property tax proposal aimed at connecting the county's regional transportation system and ending the ability of local communities to opt out of it. Voters approved it 57%-43%.

Oakland County's adoption of a countywide millage in 2022 came amid objections of elected leaders in the northern and Oakland County opt-out communities, calling the effort a "tax grab" and "theft."

The inclusion of Oakland County in the legislative opt out elimination provides the county with the ability to run transit through an authority in the future, when the county's transit millage expires in 2032 or earlier, said Dave Woodward, chairman for the Oakland County Board of Commissioners. The ability to move the millage to an authority would allow the county to take it off of its overall millage tally. A county's taxing capacity generally is capped at a certain ceiling and its proximity to that cap can sometimes be used to determine its bond rating.

Woodward, a Royal Oak Democrat, said the legislation passed Tuesday by the House would not affect Oakland County's top-tier AAA bond rating.

"This is just a tool that counties can use to best secure a path for transit in their local communities," Woodward said. "In the short term, it doesn’t change anything in Oakland County. I’m a firm believer that all tools should be made available to optimize decision making in the future.”

Both Woodward and state Rep. Alabas Farhat, D- Dearborn, denied the bill would be used to advance a regional transit system, noting a separate law, the Regional Transit Authority Act, is used for regional taxes. A 2016 effort to pass a $4.6 billion regional transit tax for Wayne, Oakland and Macomb counties failed by one percentage point.

Macomb County has adopted a transit tax at the county as well; Macomb County Executive Mark Hackel did not return a message inquiring whether the county also was seeking inclusion in the opt out elimination legislation.

Farhat's legislation, as initially introduced, would require the 17 Wayne County communities that currently opt out from the SMART bus system to participate in a vote with the rest of the county the next time the millage comes up for a vote. Currently, the millage rests at about 1 mill and will come up for a countywide renewal vote in 2026.

"Right now, we have a patchwork of transit systems in Wayne County," Farhat said. "That's causing real problems for residents to get around."

The 17 communities are unlikely to overcome the general support from the rest of the county in an election, making it likely that those communities — some of which have opted out for nearly 40 years — would be opted into the tax and transit service.

Among the largest communities in the county that have opted out are Livonia, Canton Township, Northville and Detroit, which has its own bus system.

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