Which organization uses the CPI to cap annual increases in taxable value?

The correct answer is that the State of Michigan uses the Consumer Price Index (CPI) to cap annual increases in taxable value. This practice is rooted in the principles established under Proposal A, which was enacted in 1994. Proposal A was designed to limit the growth rate of property taxes and ensure more predictable valuation increases for property owners. The law specifically states that the taxable value of property can increase by no more than the CPI or 5%, whichever is less, in any given year. This cap is intended to protect property owners from significant annual spikes in their property tax assessments while allowing for gradual growth in property tax revenue.

The other options pertain to different organizations or functions that do not have the authority to implement or enforce the cap on taxable value increases based on the CPI. The Department of Labor focuses on labor standards and workforce conditions, the Board of Equalization handles local assessments and equalization matters, while the Property Tax Commission primarily oversees issues related to property tax appeals and related administrative functions. None of these entities have the direct role of using the CPI to cap property value increases, which is specifically assigned to the State of Michigan as part of property tax legislation.