Personal Property Tax reform reflects mistrust between legislature, municipalities

Jul 10, 2014

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Citizens Research Council of Michigan

On August 5th, Michigan voters will head to the polls to select who goes on to represent each party in November’s general election. They’ll also be asked to vote on Proposal 1, which is the first step in what has been a long-fought effort to reform the state’s Personal Property Tax.

The tax, which businesses have long argued hinders growth, has also been a crucial source of revenue for many Michigan municipalities. But Proposal 1 seems to have few detractors with most business communities and local governments supporting its passage.

A recent report by the Citizens Research Council of Michigan, an independent, non-partisan research organization that analyzes public policy questions, took a deeper look at what effects Proposal 1 might have in the future. It turns out that, despite little opposition, reforming the Personal Property Tax does come with some costs.

Current State speaks with Eric Lupher, Citizens Research Council’s research director, to break down Proposal 1. He says the question for the voters is whether they want a half million dollars going to reimburse local governments for lost Personal Property Tax revenues or to be used for schools, roads and everything else that the government pays for.