No guaranteed replacement for funding lost with PPT elimination
This week, the Senate Finance Committee began hearing testimony on SB 1065-1072, a package of bills that would eliminate the personal property tax (PPT) on industrial equipment collected by local governments.
Under the legislation, the tax would be phased out beginning in 2016 through 2021, eliminating more than $470 million in taxes per year. Legislators are counting on expiring business tax credits to make up for the lost revenue. Businesses with industrial or commercial property values at less than $40,000 would be exempt from the law.
While business organizations are thrilled with the elimination of what they consider a penalty on Michigan businesses, the tax would have a drastic financial impact on local governments and school districts that depend on the revenue. Those opposed to the bills are looking for a guarantee that there will be a full replacement of all lost personal property tax revenues.
The “Replace Don’t Erase” coalition opposes the bill and is pushing for constitutionally guaranteed replacement revenue. An EPIC-MRA poll shows that 70 percent of those responding oppose elimination of the tax and 58 percent would support a constitutional amendment that fully replaces funding to local governments and school districts.
Finance Committee Chair, Sen. Jack Brandenburg (R-Harrison Township) considers the legislation a job creator since supposedly it will bring business to Michigan. He plans on moving the bills out of his Committee next week.