The Aug. 5 primary election date is rapidly approaching. I continue to get questions regarding Proposal 1. I am concerned that many of you say that you are not receiving the flyers that come to my house almost daily. You do not feel you have the information you need to cast your vote.
I wish I could be of more help. I do receive information from the Michigan Association of School Boards (MASB) and I will include some of that in this column. MASB is one of a number of organizations supporting this proposal. You can also use www.Proposal1Facts.com.
One question I can answer is “what is a use tax?” The use tax is the tax we are supposed to pay when we make purchases online from an out of state business. We are all familiar with the 6 percent sales that Michigan charges on purchases made here. The use tax is the way we pay that tax when we shop out of state. Sometimes we do this when we file our income taxes.
Another question has been why we are being asked to vote on this when it has been passed by the Legislature. MASB answers this be explaining there was concern that some governmental units that were in jeopardy of losing revenue when the bill passed to significantly cut personal property taxes on certain businesses in Michigan. So as part of the bargain, the cut in the personal property tax was tied to the passage of a future ballot initiative that would guarantee that the revenue lost to local units of government and schools would be replaced.
There are lots of claims being made about how passage of Prop 1 will affect not only schools, but business and local government. The following are some questions answered in a recent communication I received from MASB. I hope they will be helpful to those of you who are still undecided about how to vote.
1. Does Proposal 1 hurt schools? No, it in fact replaces money that could be lost to schools if the Legislature reduced the personal property tax without the passage of Proposal 1.
2. Does the proposal reduce the amount of money the State Constitution says schools should get from the use tax? No, the constitutional guarantee stays in place, and this takes additional use tax money and puts it under the Local Community Stabilization Authority for redistribution for lost revenue.
3. Does this increase taxes on voters? No, it shifts a portion of the use tax from a state levy to local levy, but does not change the rate. In fact, there are safeguards in the language that actually prohibit an increase in the rate.
4. Could this actually help school funding moving forward? Some argue that the personal property tax was a declining revenue stream and now the replacement revenue is tied to the use tax which is an increasing revenue stream. It really is too early to tell, but we do know schools should not lose any money.
5. Can we trust the Legislature to do what this says? By turning this over to the Local Community Stabilization Authority you really remove the Legislature from the distribution of these funds in the future and thus take away their ability to go back on the promise. Nothing is forever, but this is much more secure than just passing a piece of legislation.
Please remember that this proposal would affect not only schools, but all local units of governments. And please exercise your right to vote on Aug. 5.
Janet Ralph is president of the Greenville Public Schools Board of Education.