When state Senate Republicans unveiled a proposal two weeks ago to eliminate some portions of our state's personal property tax (PPT), there was some justifiable concern from local government officials.
The PPT is mainly distributed to local municipalities to help provide services to residents and any reduction of that revenue source could affect those services and programs.
That's why I scheduled a special town hall meeting in western Washtenaw County on April 30 so local officials could learn more about the proposal. I invited Lt. Gov. Brian Calley as my special guest to help explain the plan and answer questions.
Michigan's PPT is a tax that businesses pay on such items as machinery, furniture and other equipment. Since some neighboring states don’t levy a similar tax, many believe the PPT puts Michigan at a disadvantage for retaining and attracting additional jobs.
The Senate proposal recommends a "phase out" of the PPT over the next 10 years. In doing so, four different exemptions are used to gradually eliminate the state tax on commercial and industrial personal property.
It's a comprehensive plan to reduce the cost of doing business in Michigan, while helping locals retain 98 percent of their current budgets. Although I have not made a decision on how I will vote on the plan because it's still early in the process, one thing that is for certain is I will not vote for anything that does not properly replace lost revenue to our local cities, townships and villages. Our communities must still be able to provide services to residents.
The Legislature's top priority is to improve Michigan's economy, so we have a duty to consider any proposal that would potentially create more jobs. The PPT reform proposal must be considered in the Legislature in an open and transparent way.
It has always been my intention to find some type of replacement revenue if, in fact, the Legislature ever votes to reform the personal property tax. This is a huge issue for Michigan local governments and I will continue to seek input from my local elected officials as this issue moves through the legislative process.
Many people realize that our first priority is to make Michigan more conducive for job creation. To help in this process, Michigan should never punish small businesses for making long-term investments in our communities.
I'll also work to make sure local governments are not undermined. If PPT reforms take place, we must make them in a way that works for everyone.