Seal of Michigan Michigan

Michigan has a strong, constitutional tax and expenditure limit. Approved by citizen initiative in 1978, Article IX Subsection 26 of the Michigan State Constitution, known as the Headlee Amendment, indexed revenue growth to state personal income growth. Similar to the Hancock Amendment in Missouri, if Michigan tax revenue exceeds the revenue limit by more than 1%, lawmakers must refund the excess revenue to Michigan income taxpayers. Another hallmark of stringent TELs, the Headlee Amendment requires the revenue and spending limits be adjusted when devolving authority to local governments.

Interestingly, most of the Headlee Amendment’s provisions relate to local taxation. Like the state government, Michigan local governments are required to seek voter approval before creating new taxes or increasing current tax rates. Initially, a locality’s total taxable property was not allowed to increase by more than the rate of inflation. If total taxable property increased faster than the rate of inflation, the Headlee Amendment required property tax rates be adjusted back to inflation, also known as a “Headlee Rollback.”

Approved by voters in 1994, Proposal A overhauled a handful of the Headlee Amendment’s provisions. In addition to increasing the maximum allowable state sales tax rate, Proposal A also required the taxable value of individual parcels of property not grow faster than inflation. This is a significant shift from the original policy because individual taxable property could increase faster than inflation as long as the locality’s total taxable property did not. Finally, Proposal A also abolished so-called “Headlee Roll-ups.” If the value of total taxable property increased slower than inflation, localities were allowed to increase property tax rates so property tax revenues kept pace with inflation. Under Proposal A, localities were no longer allowed to increase property tax rates to match inflation, only “Headlee Rollbacks” were allowed. Proposal A reformed the Headlee Amendment into a stronger protection for individual property owners.

The base year represents the year the hypothetical Taxpayer's Bill of Rights (TABOR) would have been enacted. Selecting a base year changes how the state’s TABOR is calculated because the annual growth rates of inflation and population change depending on when TABOR is enacted.
  • Year Inflation-adjusted Actual Spending
    1992 26,302,976,520
    1993 26,716,487,460
    1994 28,316,142,600
    1995 36,378,041,840
    1996 39,099,207,380
    1997 36,455,891,980
    1998 41,221,555,790
    1999 42,525,871,850
    2000 42,462,418,160
    2001 44,706,103,900
    2002 46,039,119,260
    2003 44,262,668,010
    2004 41,994,020,770
    2005 41,309,247,110
    2006 41,544,878,490
    2007 41,179,453,000
    2008 40,761,337,070
    2009 37,520,769,180
    2010 36,174,534,890
    2011 35,859,779,940
    2012 36,502,892,960
    2013 36,313,883,710
    2014 37,641,550,550
    2015 38,720,157,240
    2016 39,354,478,870
    2017 39,559,981,510
    2018 40,800,856,680
    2019 42,432,419,890
    2020 40,321,878,560
    2021 40,800,713,880
    2022 39,735,000,000
*All spending figures are in inflation-adjusted 2022 dollars.