Luxury Never Looked Like This

July 9, 2007
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"Buy me some peanuts and Cracker Jacks, but please forget that ridiculous tax."

It definitely should be "one, two, three strikes you're out" for the misguided luxury tax proposal state legislators are evidently seriously bantering around in Lansing these hot summer days. It's a scheme that bodes ill for business in Michigan

House Speaker Andy Dillon, D-RedfordTownship, is leading the charge along with the governor's office to raise $1.5 billion in new revenue to fill the projected deficit in the state's fund for the next fiscal year, which starts Oct. 1. Part of the proposal hikes the state's income tax. Another extends the 6-percent sales tax into not-so-brave new areas, including extra hits on tickets to sporting events, concerts, shows and movies, to name a few. The projections are anywhere from $100 million to $300 million that could be raised in revenues per year through luxury taxes on more than 700 categories of entertainment and recreation.

As lawmakers have crowed about how they "fixed" the current year budget woes without raising taxes (and many assail the idea of raising revenues in that way ever), they conveniently seem to overlook the continued reduction in state revenue-sharing payments to local units of government, in effect forcing those jurisdictions to cut programs, raise fees and make impossible budgeting decisions for the future. Communities are not going to receive funds they contributed to the state, and the local consequences are increasingly dire.

Now Lansing wants to continue to put the burden on residents and businesses at the local level, slapping an extra user fee on every possible recreational opportunity known to mankind, or so it seems. When the gates opened at then Old Kent Park in 1994, few of the excited fans flocking to the stands with their families to watch some inexpensive minor league baseball and enjoy a summer evening at the ballpark would envision the day when that experience would be categorized as a "luxury." Neither did the West Michigan Whitecaps' founders, who eschewed the lack of public funds from the state to finance and build a park with private means. They now find themselves joining the chorus of minor league operators and other entertainment venues throughout rightfully crying "foul (ball)."

Similar baseball efforts have been successful in other Michigan towns, including the Great Lakes Loons in Midland and the Lansing Lugnuts. These organizations, which are unabashed economic catalysts in their communities, can't afford to be in a position to increase ticket prices, which would impact their ability to reach out to families at every income level.

"We feel that to look to such a community-based industry (minor league baseball) to solve budget woes is probably looking in the wrong direction," said Lew Chamberlin, managing partner of the Whitecaps (as well as the sure-to-be impacted Berlin Raceway) and a member of the Convention and Arena Authority Board that operates venues that host concerts and shows whose audiences also would be gouged (and maybe encouraged to stay home) by the added tax.

Rick Hert, executive director of the West Michigan Tourist Association, also sees foreboding consequences to the proposed luxury tax, recently saying that such a move would negatively impact his industry, as well. A dampening of the tourism sector just as the state is attempting to give it added economic significance is unreasonable public policy.

State budget coffers are undergoing a massive overhaul, that's of little doubt. To plug the gaps by punishing elements of communities that improve the quality of life to such an unquestioned degree in this state is not the answer. Let's just say this corny pitch is way too high and outside.

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