Metro Council hopes PPT march slows down

May 13, 2012
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A group put together by the Grand Valley Metro Council met recently with state Sens. Dave Hildenbrand and Mark Jansen and then with Lt. Gov. Brian Calley to discuss the fate of the personal property tax. All three are Republicans.

Kent County Administrator Daryl Delabbio said the meeting with Calley went better than the one with Hildenbrand and Jansen.

Ottawa County Administrator Al Vanderberg came away with a similar take on the get-togethers. “The governor’s office wants to work with us, and the Senate wants to work us over,” he said.

The state Senate approved a package of eight bills last week that would begin to phase out the tax on industrial and commercial equipment in a few years, without relief for utilities. But starting in January, SB 1070 would abate the tax on machinery that costs $40,000 or less. SB 1069, sponsored by Hildenbrand, a Lowell Republican, would provide an exemption that would begin Dec. 31, 2015, for eligible manufacturing equipment that was purchased after Dec. 31, 2011. The Senate sees the bills as an economic development incentive. The Grand Rapids Area Chamber of Commerce agrees, as it congratulated the Senate for the action it took last week.

Becky Bechler of Public Sector Consultants, which lobbies on behalf of the county, said the House is expected to propose some amendments to those bills this week.

“It went fast — record fast, and we were surprised by that,” said GVMC Executive Director John Weiss of how quickly the Senate moved on the package.

The concern the Metro Council has is how the state will replace the revenue local units get from the PPT once it is either reduced or eliminated and how much will be replaced. The PPT made up at least 9 percent of the total property-tax revenue 13 cities, townships and villages in Kent County received in 2010. Those figures came from the Michigan Department of Treasury that the Michigan Municipal League gathered.

The MML also reported the Grand Rapids Public Library collected $992,000 from the PPT in 2011, and the Kent County District Library captured $1.2 million.

The Michigan Association of Counties reported Kent County received $10.6 million in PPT revenue in 2010, which was 10 percent of its total property-tax receipts that year, while Ottawa County got $3.2 million or 9.4 percent of its total property tax from the PPT.

The Senate bills use expiring tax credits to replace the lost revenue, a move Gov. Rick Snyder favors. But the Michigan League for Human Services reported those credits would only replace about 60 percent of the $500 million municipalities, counties, schools and libraries would lose if the bills become law.

Weiss pointed out he doesn’t expect the state House to move as quickly on the PPT as the Senate has done, which will give the Metro Council more time to continue discussions. He also said Calley has agreed to be the featured speaker at the council’s next quarterly luncheon July 9 at the Prince Center on the campus of Calvin College.

Manufacturers, commercial firms and utilities pay the PPT.

On another key revenue matter, Scott Greenlee of the Michigan Transportation Team told the Metro Council there are 29 bills circulating in Lansing that would increase funding for roads and bridges. He said one proposal would hike the sales tax by a cent. But an analysis showed doing that would only raise $900,000 in a year, and the state needs from $1.2 billion to $1.5 billion annually. “When it comes to business growth, roads and bridges are pretty important,” he said.

Greenlee said he has met with about 100 people in West Michigan to get their ideas on what the state should do about infrastructure funding, and he plans to meet with a few hundred more over the coming months. “We are very interested in getting your thoughts and feedback. We’re trying to come up with the best possible solution,” he said. “The earliest anything would go into effect is fiscal year 2014.”

Those with the most to lose

Thirteen municipalities in Kent County relied heavily on the personal property tax in 2010. The state levy accounted for from 9 to nearly 17 percent of total property tax revenue.




Municipality

Ada Township
Byron Township
Cascade Township
Grand Rapids
Grandville
Kent City
Kentwood
Lowell
Rockford 
Sparta Township
Sparta Village
Walker
Wyoming

 


2010 Total
Property Tax
Revenue

$2,747,877
$613,525
$5,182,763
$39,531,406
$6,160,955
$165,658
$19,389,726
$1,836,751
$2,344,272
$425,325
$1,544,445
$1,386,511
$25,096,301

 

2010 Total
Personal
Property
Tax Revenue

$256,996
$62,145
$472,159
$3,637,592
$600,458
$19,345
$2,865,882
$175,887
$289,163
$46,838
$259,721
$184,327
$2,763,132

 

2010 Personal
Property Tax
as % of Total
Property Tax

9.35%
10.13%
9.11%
9.20%
9.75%
11.68%
14.78%
9.58%
12.33%
11.01%
16.82%
13.29%
11.01%

Source: Michigan Municipal League & Michigan Department of Treasury, May 2012

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