Banking & Finance, Government, and Nonprofits

Local governments call for timeout on tax cut for businesses

December 6, 2012
Print
Text Size:
A A

The Grand Valley Metro Council joined a growing list of public entities that are calling for state House lawmakers to take a deep breath, leisurely grab a cup of coffee or two –– the de-caffeinated variety preferably –– and then delay their votes on a package of bills that would eliminate most of the Personal Property Tax.

On Wednesday, the House Tax Policy Committee approved the bills that would lift commercial and industrial office furniture and equipment from the tax roll, which means local governments would lose a portion of the revenue to fund police and fire services. The repeal legislation doesn’t affect the PPT that the state’s utilities pay.

Once the bills emerged from the committee, the word was votes would be taken in the House soon on the legislation, possibly as early as today. The state Senate approved a similar repeal package in May. A stickler for cities, townships and counties is a replacement revenue source hasn’t been carved in stone, and the revenue loss would begin in about a year.

“The bills are complicated, but they’ve moved quickly. Ask your representative to delay (the vote),” said GVMC Executive Director John Weiss to board members. “There are major holes in the legislation.”

The speed with how quickly the House bills have moved has surprised many, especially in a lame-duck session. Weiss said he and officials from Kent and Ottawa counties and the city of Grand Rapids have spent many hours working on replacement revenue ideas and have talked with Lt. Gov. Brian Calley about making sure the governments are kept whole as part of any legislative effort to repeal the PPT.

“We’ve put in a lot of work and a lot of effort and came up with a solid proposal. I’m afraid if this goes through, we’re going to be left picking up the pieces,” said Daryl Delabbio, Kent County’s administrator and controller.

Calley appeared before the council in July and told members then that he didn’t know how the state would replace the lost revenue if the tax is repealed.

“I’ve long stopped trying to predict what the Legislature will do on this. I want to re-assure you that we’re committed to negotiating your situation,” he said then.

But late last month, Calley and Republican leaders unveiled their plan to wipe out the PPT and link some of the replacement revenue to a tax shift that would require statewide voter approval in 2014. Local officials are concerned that voters may reject the tax shift and governments may be left without adequate replacement revenue.

“Nobody really understands what the consequences of this are,” said Ottawa County Administrator Al Vanderberg.

“We can’t find anyone in the state who can estimate what the impacts will be,” said Weiss. “Villages aren’t even included in the legislation that we can find. They haven’t had the time to look at the local impacts.”

PPT revenue accounts for 9 percent to 17 percent of all the tax revenue that 13 cities and townships received in Kent County in 2010. For Kent County, that income was worth 10 percent of all county revenue that year.

The Metro Council has joined the Michigan Municipal League, the Michigan Association of Counties and other municipalities across the state in a push to get a vote on the bills delayed.

“We need to find out how this impacts us,” said Weiss. “Right now, it’s a moving target.”

Recent Articles by David Czurak

Editor's Picks

Comments powered by Disqus