Michigan Homeowners Face Making Up Deficits Caused by Tax Cut Plan
Local Governments Scramble for Reply to Proposed Personal Property Tax Cut
September 25, 2011
By: Dave Rogers
We don't need all those stinking cities, villages and townships, says Michigan Senate Majority Leader Randy Richardville.
Local government leaders already are frothing at the mouth over Gov. Rick Snyder's idea to eliminate about $1.2 billion in personal property taxes.
Now comes Sen. Richardville to rub salt in the wound and say to local governments in effect: "why don't some of you just put yourselves out of existence so we can cut more taxes?"
Richardville's actual words were: "I think we're going to have to step back and take a look and say maybe we don't need quite as many cities, quite as many villages, quite as many townships, at least not in the same structure as they are today."
This definitely will not be a popular idea. We recall a study in Saginaw County several decades ago that broached the idea of local government consolidation. It was so controversial the report was never publicly released.
The Guv already has cut businesses a billion and a half dollars in slack with the flat tax approved by the Legislature, shifting more costs to local governments and homeowners.
All this without any mention of what should be the real bottom line -- more and better jobs.
Critics assert elimination of the personal property tax would adversely impact most local government services as we know them. Cities, counties, townships, libraries, police-fire, schools -- all would be decimated.
Now homeowners may take up the cry as they begin to realize where the increasing burden of financing will fall: on their homes!
To be fair, Lt. Gov. Brian Calley is holding meetings to explore how to replace Personal Property Tax revenues. But all involved conclude he has few options other than residential taxes.
Surveys by Michigan Public Radio and a statement by Dan Gilmartin, of the Michigan Municipal League, confirm the opinion that local governments will be direly impacted.
"Scrapping the Personal Property Tax without guaranteeing replacement funds for services and for schools would harm public school students, counties, libraries, and police and fire protection across the state," says Gilmartin.
School districts would be severely hit as well.
Cutting the Personal Property Tax without replacing those revenues to local governments and services "would impact the schools by over $300-million," said Stan Kogut Superintendent of the Ingahm County Intermediate School Board.
"It would be the final blow for all public libraries across the state," asserted Christine Berro, past president of the Michigan Library Association.
"I would be devastating to the ability of police departments across the state to provide safety," George Basar, past-president of the Michigan Association of Chiefs of Police said.
Richard Notte, Mayor of Sterling Heights said that city would lose $9.2-million with the elimination of Personal Property Tax.
And Dave Weisenberg with Michigan Professional Fire Fighters Union, invoked memories of firefighter contributions during the 9-11 crisis, complaining that fawning politicians are going "to forget us tomorrow."
Deena Bosworth of the Michigan Association of Counties, comments:
"We are very happy with having a very stable revenue source. Personal Property Tax is not something that gets filtered through the state. And, so, therefore our communities can rely on that funding without threats of cuts from the legislature, without broken promises from things they're supposed to fund. And, so our focus is a guaranteed revenue replacement."
Local officials are wary of promises from the legislature. Many of them feel the lawmakers in Lansing have reneged on promises to share money in the past. Many local governments just went through tough budgeting decisions due to cuts to revenue sharing from the state.
Karen Dunigan, the mayor of Jackson, told a reporter earlier this year:
"If they are going to take it away, (personal property taxes) they should find a way to replace and not on the backs of the local taxpayers. They are asking all the local communities to bail out Lansing. We cannot building a community economically if they keep taking our money."
Some officials say the only way to guarantee revenue is through a constitutional amendment or perhaps a binding supreme court decision. They cite numerous unfulfilled funding promises.
Sara Wurfel, the governor's press secretary, says:
"The Lieutenant Governor is definitely spearheading the work from this end. And he's actually (involved in) ongoing work with a variety of stakeholders including our legislative partners to again explore all the issues and potential options and solutions."
Richardville says he thinks local governments and schools can be weaned off the tax revenue. He says phasing out the tax will give local governments enough time to find new ways to save money.
He admits that local governments have done just about everything to cut costs internally. But his next step is to cut the units that deliver services, a move that will not be in the best interest of Michigan or its taxpayers.
Dave Rogers is a former editorial writer for the Bay City Times and a widely read,
respected journalist/writer in and around Bay City.
(Contact Dave Via Email at email@example.com)
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