In a recent column I shared my concern that the public will not understand a proposal that will be on the August 5 ballot. I do not believe that the publicity many of us are receiving provides enough information to help us make a decision.
Last week I received a copy of the CRC Memorandum, a publication by the Citizens Research Council of Michigan. By contrast, this document which is very well done and complete is probably more information that most of us can grasp. If you wish to read it in its entirety, it is posted on the Greenville Public Schools website. I will attempt to provide an accurate summary of the article as I understand it, but I do not pretend this is complete.
One of the long-standing goals of the state’s business community has been to eliminate personal property from the property tax base. Those advocating this change believe that the personal property tax (PPT) is a disincentive on investment that results in decreased return on business investment, discourages business expansions and job creation.
The effort of state policymakers to enact PPT reforms has been hampered by the need to address the replacement of significant existing local government revenue generated by the tax. However, through two rounds of legislative decision-making in both 2012 and 2014, the state legislature and the Governor succeeded in enacting reforms that bring significant personal property tax relief to Michigan businesses. At issue is the fact that this also causes a loss in revenue for local governments. A compromise was reached among state policymakers, local government associations, and business representatives. Public Act 80 of 2014 redirects a portion of the state’s current use tax to create a new local tax.
The revenues of this new tax would be distributed to local governments as reimbursement for lost PPT revenues. Both the levying of the new tax and the reimbursement of revenues to local governments would be the responsibility of a new special authority created under Public Act 86 of 2014.
We are being asked to vote on this because Public Act 80 requires a statewide vote of the electorate to approve the conversion of a portion of the state’s use tax to this new local tax and includes the specific summary language to be used on the August ballot. According to the article in the CRC Memorandum, “If the ballot question is approved by voters, the personal property tax reforms will go forward, with local revenue reimbursement implemented as prescribed in the 2014 legislation. If the measure fails, all provisions of the personal property tax reforms will be repealed effective for tax year 2015, meaning that all businesses would once again be subject to any relevant tax levies on personal property.”
As I understand it, this would mean that funds the schools would lose because of tax code changes would be replaced. It would not mean there would be additional funds for schools.
I am not prepared to advocate for a position at this time nor do I see that as my role. For those who wish much more information, please see the school district website. It is my hope that enough discussion can be encouraged that voters can make a decision on the August 5 ballot.
Janet Ralph is president of the Greenville Public Schools Board of Education.