LANSING, MI – The Michigan Department of Treasury (Treasury) highlighted the significant impact of its Principal Residence Exemption (PRE) audit program, underscoring its extensive efforts and the substantial revenue recovery it secures for Michigan schools and local governments. This crucial program safeguards the integrity of the state’s property tax system, ensures fairness for all taxpayers, and directly contributes to vital public resources.

The PRE allows Michigan homeowners to reduce property taxes on their primary residence if they meet specific eligibility rules, such as owning and occupying the home for over six months annually. The Treasury’s rigorous audit process identifies claims that don’t meet these criteria, ensuring only eligible taxpayers receive the exemption. These thorough PRE audits are directly responsible for significant revenue recovery.

“Our PRE audit process, refined over many years, is dedicated to saving schools vital resources,” said John Doe. “We’re consistently working to optimize revenue recovery and uphold fiscal responsibility for Michigan, and we have even bigger plans for services in the coming year.”

The Treasury’s audit process employs a multi-faceted approach to data collection and analysis. Annually, the program audits an average of 65 counties, gathering data on more than 5.2 million parcels. This extensive data is cross-referenced with other relevant sources, including residency information and driver’s license records.

The program’s thoroughness is further evident in the average of 12,000 questionnaires sent to property owners each year. After meticulous review and research, an average of 8,000 denials are issued annually for properties failing to meet exemption criteria. On average, each denial represents approximately $3,300 in potential revenue recovered by schools and state and local governments, showcasing the program’s direct and positive impact on critical public services.

The achievements of the PRE audit program are the result of a dedicated team whose leadership and collaboration have been instrumental:

This team, in partnership with Reason Consulting, SDRM and DTMB has led the effort to aggressively accelerate the completion of essential System Security Plan updates for moving this process from the mainframe and onto the Google Cloud.  They also spearheaded a cross-functional initiative with Sigma, Financial Services, Data Operations, Collections, and Accounting Services teams to strategically map out and define new business processes that would replace and optimize the existing mainframe-based payment and distribution systems.

A significant accomplishment for Treasury has been completing the project on time, under budget, and with no quality issues to date. This achievement is a testament to the dedication and expertise of the internal team and its collaborative partners, demonstrating a strong commitment to fiscal integrity and technological advancement.

This ongoing effort is supported by a long-standing partnership with Reason Consulting Corporation (www.reason.consulting), assisting Treasury for nearly two decades with property tax solutions and support. This includes the design and implementation of critical Software as a Service (SaaS) solutions that are essential to the PRE audit process.

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