The Michigan Association of Counties (M.A.C.) would like to thank the Snyder administration and key legislators in the House and Senate for their new approach to personal property tax (PPT) reforms.  Today the House and Senate introduced legislation that will provide for 100% reimbursement to counties stemming from local revenue losses associated with the reform of PPT. The proposed legislation will make several clarifications to the law and amend the August ballot proposal language to increase budget stability for local communities and assist businesses in creating more jobs. “We are glad the administration recognizes the value counties provide to Michigan residents, and we are eager to partner with the legislature to spur economic growth by supporting this tax reform,” said M.A.C. Director of Governmental Affairs, Deena Bosworth. “Replacement of this local revenue source is key to providing good communities where businesses and residents can thrive.” These changes still require a vote of the people in the August primary, but retain the provision that if the ballot proposal does not pass, both the tax reform and the local reimbursement reform are repealed. M.A.C. looks forward to working with the legislature to ensure local communities are provided with stable revenue while continuing to support the growth of Michigan’s economy.  

HB 6022, 6024, 6025, 6026, and SB 1065-1071 Personal Property Tax (PPT) On the last day of the lame duck session, Lt. Governor Calley and MAC reached an agreement on the PPT package of bills that would tie bar the entire PPT repeal to the passage of the use tax vote in 2014. This move, along with the inclusion of jails in the essential services assessment and the movement of the minimum threshold for 80% reimbursement from the state, brought MAC to a neutral position on the bills. Although the package is not perfect, the Lt. Governor and the House and Senate have agreed to keep working throughout the next legislative session to address any unanswered questions and unfinished issues. This package represents a significant improvement over all other options on the table. It has been our goal to achieve the most comprehensive and reliable replacement revenue source for our counties. The other option on the table was complete elimination of new personal property tax for new purchases starting Jan. 1, 2013 without any reimbursement plan. This would have left counties at a negotiating disadvantage with little incentive for the other interest groups to negotiate reimbursement proposals. All counties in Michigan will be eligible to assess an essential services assessment and 63 of Michigan’s counties will be eligible for reimbursement from the diversion of the state’s use tax. SB 1021 and 1022, HB 5367 Payment In Lieu of Tax (PILT) SB 1021 and SB 1022, sponsored by Sens. Casperson (R-Delta County) and Booher (R-Osceola County) respectively, are on their way to the Governor for a signature. The bills increase state payment in lieu of taxes (PILT) obligations to counties according to inflation. In addition, they would allow counties to apply fees and penalties against the state if PILT payments are late or are not fully paid. In all, the bills would increase PILT payments to local units of government by about $9.7 million. MAC thanks Sens. Casperson and Booher, along with Rep. Frank Foster (R-Emmet County), the Governor, and all of the Northern Senators and Representatives for their hard work on this issue. Additionally, HB 5367, sponsored by Representative Chuck Moss (R-Oakland County), is on its way to the Governor for a signature. The bill provides supplemental appropriations in the amount of $2.6 million to fully fund the state’s PILT obligation for the current year. Special thanks to Representative Moss, Senators Casperson and Booher, and the Governor for getting this done for counties.

PPT is headed to the House floor for a vote this morning, with a new proposal from house republicans that would exempt all new personal property from January 1, 2013, on, with no reimbursement.  This would mean a virtual phase-out, with NO reimbursement to local governments. This is an URGENT call to action.  Please call your state representative to slow this down and not rush this through lame duck. Click here to find contact information for your legislators. You can reference the Legislative Update from 12-7-12 for more details on the current PPT proposal, on MAC’s website under “resources” then “publications”.