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Tecumseh, Michigan, is a vibrant community, situated 25 miles southwest of Ann Arbor, Michigan and 40 miles northwest of Toledo, Ohio. The city currently has a land area of approximately 5.4 square miles and a population of 8,651 (estimated as of July 2022).
The government is empowered to levy a property tax on both real and personal property located within its boundaries. The city has operated under the council-manager form of government since 1954. Policymaking and legislative authorities are vested in the governing council, a seven-member council including the mayor. The City Council is required to adopt a final budget prior to the start of the fiscal year to which it pertains.
While impacts of COVID-19 continue to affect the local economy, the City has experienced an improvement in the economic environment since 2020.
Following the national unemployment rate of 3.6%, Lenawee County as of June 30, 2023, was experiencing a 1.1% higher rate at 4.7%, but was .4% lower than last year at this time. This fiscal year showed a strong construction market with permits for 17 new residential units, three new industrial buildings, five building additions or improvements, and sales data indicating rising values.
The industrial business base within the City saw positive market forces, but both price and labor instability were cause for growing uncertainty. Kirchhoff Automotive, the City's largest employer, has seen continued demand and could increase capacity except for labor challenges. Additionally, changes in the automotive industry, led by electrification, have produced mixed results for local suppliers. The City continues to work with these businesses to offer any type of assistance it can.
Despite overall positive trends in property values, the growth in property tax revenues continues to be constrained by the Headlee Amendment (which limits the annual increase in the State Equalized Value of real property) and the provisions of Proposal A (which limits increases in taxable property values to 5% or the rate of inflation, whichever is less). For fiscal year 2023, the Michigan Department of Treasury accepted inflation rate for property tax purposes was 5%. Nevertheless, actual inflation rates remained above 5% for the first three quarters of the year. Taken together, these factors create a situation where growth in expenses has outpaced revenues. As of the end of the fiscal year inflation rates had slowed, but other cost pressures such as wages and benefits continue to impact the City budgets.*
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