Nov 27 A coalition of Michigan cities, counties
and school districts on Tuesday raised red flags over a proposal
by state officials to reduce drastically over 10 years the
personal property tax revenue they collect from certain
Republican Governor Rick Snyder's administration unveiled a
plan to exempt manufacturers' personal property, such as
machinery, gradually from the tax, while allowing for the
replacement of some of the lost revenue for local governments.
The aim is to make Michigan more hospitable to industrial
companies so they will create jobs in the state.
"Reducing this unfair burden on job providers will attract
investment and expand local tax bases," said Michigan Lieutenant
Governor Brian Calley in a statement.
The tax raises about $470 million a year for members of the
"Replace Don't Erase" coalition, made up of the Michigan
Municipal League, along with county, school board and other
groups, according to Samantha Harkins, state affairs director at
the municipal league.
Under the governor's plan, the state would tap its 6 percent
use tax to make up for some of the lost revenue, while local
governments could also levy a so-called essential services
assessment on manufacturers that were subject to the personal
property tax to pay for police, fire and ambulance services that
had been funded by the tax. Lost revenue for the state's school
aid fund and for school debt payments would be fully reimbursed,
according to the statement.
But channeling use tax revenue to local governments would
have to be approved by voters in a state-wide election, possibly
in 2014, state officials said. Local voters would have to
approve the essential services assessments, according to
In a letter on Tuesday to Calley, the coalition said it
wants "replacement revenue by a consistent, reliable source."
Specifically, the coalition said if voters reject the plan
for replacement revenue from the use tax, the reduction in
personal property tax revenue should be shelved.
While the Snyder administration is pushing to get the tax
plan passed during the current lame-duck legislative session,
which ends next month, Harkins said the coalition wants more
time, noting the plan would not take effect until January 2014.