Supporters trying to educate voters on Proposal 1
The wording on the ballot may not be clear to some voters.
It’s hard to find any organization firmly opposed to Proposal 1 on the Michigan Aug. 5 primary election ballot, but that does not mean it’s a shoo-in.
If it wins, the phase-out of the personal property tax on most industries will begin in 2016, and replacement revenue from other existing taxes will be assured for Michigan’s local governments, which have relied on the PPT for years to fund public services, particularly critical services such as police and fire protection.
But one key observer says the ballot language is very difficult to understand — “not user-friendly” — which may cause some voters to “default” to a “no” vote. That organization is the Detroit Free Press, which has editorialized in favor of Proposal 1, although in that editorial, it says it is “complicated” and some voters may think it would raise taxes, although it will not do so.
Here is the actual proposal as written on the Aug. 5 ballot:
“Approval or disapproval of amendatory act to reduce state use tax and replace with a local community stabilization share to modernize the tax system to help small businesses grow and create jobs:
The amendatory act adopted by the Legislature would:
1. Reduce the state use tax and replace with a local community stabilization share of the tax for the purpose of modernizing the tax system to help small businesses grow and create jobs in Michigan.
2. Require Local Community Stabilization Authority to provide revenue to local governments dedicated for local purposes, including police safety, fire protection, and ambulance emergency services.
3. Increase portion of state use tax dedicated for aid to local school districts.
4. Prohibit Authority from increasing taxes.
5. Prohibit total use tax rate from exceeding existing constitutional 6% limitation.
Should this law be approved?"
Fred Woodhams, a spokesperson for the Michigan Secretary of State’s office, said the ballot text “was written by the Legislature,” not by anyone in the SOS office.
The Business Journal asked Danielle Leek, a professor at Grand Valley State University and director of the Grand Valley Speech Lab in the School of Communications, to read the ballot language. She said that she did find it very confusing. “And it is a good example of why we need a law that requires ballot language to be as clear and understandable as possible.”
One of the most active organizations in support of Proposal 1 is the Michigan Municipal League.
“The ballot language might be confusing to some, and that’s why the focus of the ‘Vote YES on Proposal 1’ campaign has been to inform and educate voters about the Personal Property Tax, what this proposal will actually do and how it will benefit Michigan’s communities and businesses. Rarely have we seen a ballot proposal garner such wide-ranging support as Proposal 1 has received,” said Matt Bach, director of media relations for the Michigan Municipal League.
The campaign Bach refers to is the Michigan Citizens for Strong and Safe Communities, a coalition of business and local governments formed to promote passage of Proposal 1.
“Yeah, it is a little confusing,” conceded state Sen. Dave Hildenbrand, a Republican representing the 29th District in the southern part of Kent County, who has actively supported legislation to phase out the personal property tax on business since he was a state representative.
Hildenbrand said the concern is that “people are busy” and may not take the time to educate themselves on Proposal 1 before voting.
The Michigan Citizens for Strong and Safe Communities campaign will be using a variety of communications and promotional events to educate voters.
Coordinating the education campaign on behalf of the coalition are Tim Dye and Kelly Rossman of the Truscott Rossman public relations agency, a statewide firm with headquarters in Lansing. Among the events is an online contest to find the oldest taxed business equipment in Michigan. The contest kickoff was June 17 at Constructive Sheet Metal on South Division Avenue in Grand Rapids, led by Eric DeLong, Grand Rapids deputy city manager; John Weiss, Grand Valley Metro Council executive director; Rick Baker, Grand Rapids Chamber of Commerce president and CEO; and Tab DeJonge, an owner of Constructive Sheet Metal.
Michigan’s PPT is described by the coalition press release as “an antiquated, unfair tax on business equipment — and it never goes away. Businesses pay the tax every single year they own the equipment.” So members of the coalition are now scouring the state to find the oldest piece of taxed business equipment — a visual element they can show voters — “to drive home the fact that the PPT needs to be reformed. Proposal 1 would eliminate the tax and guarantee 100 percent reimbursement of estimated PPT funding lost for local services. It’s a win for local small businesses and a win for local governments.”
The heading on the home page of the coalition website (strongandsafecommunities.com) is: “Protect Our Communities & Help Small Businesses and Manufacturers Create Jobs Without Increasing Taxes.”
The PPT has been most onerous on manufacturing companies, which have been paying annual taxes on the value of their manufacturing equipment, some of which require millions of dollars of investment in the first place.
However, when the Legislature began the process of trying to pass legislation to end the PPT, it ran into objections from the state’s small governments, which demanded another source of revenue to replace it. Proposal 1 is calculated to do just that, and many local governments have actively joined the effort to get it passed.
Typical of that support around the state is a news release issued in mid-June by the village of Middleville and distributed by the coalition state-wide. It states:
“Stabilizing funding for local government services and helping local small businesses without raising taxes is a top priority for the Village of Middleville, which has endorsed Proposal 1 on the Aug. 5 statewide ballot.
‘A YES vote solves two major problems without raising taxes,’ said Middleville President Charles Pullen. ‘First, the proposal keeps in place the Michigan Legislature’s bipartisan work to end the antiquated, unfair double tax on personal property, which most neighboring states don’t have. And second, the proposal creates a stable, reliable funding system for Michigan communities to pay for police, fire, ambulances, jails, schools, libraries, roads and other important services.’
‘With this resolution, the Village of Middleville urges a YES vote on Proposal 1 to stabilize local communities and get rid of an unfair tax on our local small businesses — all without raising anyone's taxes,’ Pullen said.
The Village of Middleville joins an increasing number of Michigan businesses, local governments and public safety organizations approving resolutions in support of Proposal 1. AARP Michigan recently endorsed the proposal because it helps ensure Michigan communities can continue offering important services to seniors, including senior centers, health programs, assisted living facilities, public transportation, police and fire protection, and more.
The proposal guarantees replacement of 100 percent of estimated revenue lost for local services due to elimination of the antiquated, unfair tax on personal property.
‘Support continues to grow for Proposal 1 as voters learn more about it,’ said Tim Dye, spokesman for Michigan Citizens for Strong and Safe Communities.
The bipartisan coalition of tens of thousands of Michiganders from across the state is committed to eliminating the antiquated, unfair double tax on local small businesses while providing more stable funding for local services, including police, fire, ambulances, schools, jails, libraries and roads. Members include representatives from local government, small business, labor, education, law enforcement, and other state and local leaders.”
“Difficult to read as the ballot language is, people need to understand that this is not a tax increase but a transfer of state revenue to local government, schools and libraries. We believe that these funds can be used more effectively at the local level where voters tend to have more influence,” said Grand Rapids Mayor George Heartwell.