Posts Tagged ‘personal property tax’
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the provision that if the ballot proposal does not pass, both the tax reform and the local reimbursement reform are repealed.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.
Antrim County Commissioner, Mike Crawford (left) preparing to speak about the PPT reform after Lt. Gov. Brian Calley (right)
Antrim County Commissioner, Mike Crawford
MAC was invited to a special briefing in the Lt. Governor’s office to discuss his new plan for PPT Replacement. MAC’s position on PPT Repeal has remained the same, we will support the repeal if we get full reimbursement through a guaranteed revenue source. Lt. Governor Calley has heard our request and come up with a plan that may get counties 80% guaranteed reimbursement, but with the potential for additional reimbursement through a combination of a dedicated revenue source not subject to legislative appropriation and a special assessment to cover police, fire, and ambulatory services.
The basics of the repeal remain the same as they were when the bills passed out of the Senate. All commercial and industrial personal property with a taxable value of $40,000 or less would be exempt from the tax beginning in 2014. A new category of industrial personal property would be created to avoid giving certain industries, like wind turbines, the exemption. This new category is called Eligible Manufacturing Personal Property. The PPT exemptions for this category would be as follows:
* All new personal property bought after 12/31/2011 will be exempt as of 12/31/2015
* All personal property that is 10 years old would be exempt as of 12/31/2015 and continue each year until all the property is either new or 10 years old to achieve full exemption.
The reimbursement plan, although it meets some of our stated criteria, is not ideal. MAC has been assured by the Lt. Governor that for those counties who have more than 2.5% of their property taxes coming from personal property tax, their reimbursement cannot go below 80% of their PPT loss. Those less dependent on PPT (defined as having PPT revenue less than 2.5% of total property tax revenue) will not see any reimbursement. This revenue would come from utilizing a portion of the State’s use tax. This use tax money would be assessed by a new state-wide authority with broad powers and be distributed by the same entity, thus avoiding the legislature and the appropriations process. We are likely to have significant concerns over the power being granted to the authority, but we are still evaluating the proposal.
Counties would be able to make up more losses by placing a special Essential Services Assessment on industrial real property but only at a rate needed to replace 100% of lost PPT revenue that otherwise would have funded police and ambulance services from the County General Fund.
On the surface this proposal appears slightly better than the version that passed out of the Senate, but we still need time to evaluate it. We need to be especially careful that the lame duck legislature gets this right. When talking with your legislators, please reiterate the fact that the Senate passed version does not provide a good solution,and that the Lt. Governor’s new proposal needs to be fully vetted and any concerns rectified before action is taken.
This alert is an overview of what the plan is, but specific formulas for reimbursement or calculations have not yet been provided. As we learn more about the proposal and the impact it will have on counties, we will update you.
You can find more on the subject and how it will affect local government from these articles:
Hello MAC Members and followers, and welcome to the new blog of the Michigan Association of Counties.
Today felt like an appropriate day to launch our new blog seeing as it is such a crucial day to our nation. Government, from local up to federal, has such an impact on our daily lives, and it is an amazing opportunity to take part in the decisions that are made through the ability to vote.
Here at MAC, we are continuing to fight for the interests of county government and their residents. As we head into lame duck, MAC will be working on your behalf for favorable outcomes to issues as important as personal property tax, indigent defense, labor issues, court reform and PILT. You can follow the progress on these issues and more on our Facebook page
, twitter feed
, and website
It is our hope that this blog will be an additional source to keep our members and followers informed and up-to-date on what we are up to. So stay tuned! There is way more to come!
Thank you for following, and happy voting!