Wayne Mayor Abdul Haidous, Andy Schor and Sterling Heights Mayor Richard Notte testify.
LANSING, Michigan - The Senate Finance Committee held the first of several hearings on SB 34, elimination of the Personal Property Tax. The League had several members interested in coming to Lansing to testify. After hearing from the sponsor’s office telling us that the agenda was packed and many of our members may not have time to testify, though, several members decided to come to a future meeting. We were informed by the sponsor’s office that they plan to have about 4 more meetings on this bill and on SB 1 (legislation to repeal the Michigan Business Tax).
Sen. Mike Nofs (R-Battle Creek), who sponsored SB 34, testified that the personal property tax is disliked by just about everyone and that it is bad for businesses. He said that he would like to find a replacement for locals and school, who will lose approximately $1 billion in revenues, and that SB 34 was introduced to get the conversation going. He said he is open to several options that could be discussed, including a phase out or only eliminating new personal property taxes.
Knowing that several Mayors came from far away, Chair Jack Brandenburg (R-Harrison Twp) allowed the League and its members to testify next (thank you to the Chair!). I testified that there needs to be replacement revenues in order for the League to support SB 34, and that without those revenues we are adamantly opposed and it would be devastating to our communities and residents. Mayor Richard Notte of Sterling Heights and Mayor Abdul Haidous of Wayne testified to how this elimination in addition to revenue sharing cuts have hurt their communities and the necessary services that they offer (police, fire, plowing, etc). Mayor Notte finished his comments by saying, “This bill will simply bust our balls!”
Sen. Jansen (R-Grand Rapids) suggested that SB 34 would save money in administrative costs. To that, Mayor Haidous responded that repeal would save the 10% in administrative costs, but the other 90% would still be problematic. Sen. Bieda (D-Warren) asked about the idea of eliminating new personal property taxes, and I responded that many local governments can do that now under PA 328 on a case-by-case basis. Sen. Proos (R-St Joseph) suggested looking to see how other states have phased out the tax and using them as a model. Representing the City of Alma, City Manager Phil Moore testified that without the personal property tax, things like industrial wind farms would not be approved in communities because the residents only accept industrial property for the personal property taxes they generate.
Other folks testified as well. The Michigan Chamber of Commerce testified in support of SB 34, but said that the MBT repeal was their real focus and that they want the personal property tax and the MBT done separately. The Taxpayer Alliance testified that citizens are paying more and that these taxes should be eliminated and not replaced so citizens can pay less. The Mackinac Center testified that these taxes should be eliminated and that they have a list of reform recommendations to replace the money (which includes eliminating revenue sharing!).
While several Senators and those testifying indicated that they are in favor of replacement for the personal property tax for locals and replacement for the MBT, the Chair indicated that his preference is for no replacement. But he said he is open to committee discussions and to reviewing what the Governor proposes. He also said that due to the complexities of both bills, there will be several more hearings.
If you haven’t already contacted your Senator and the members of the Senate Finance Committee, please do so. If you would like to testify on this bill at future hearings, please contact Summer Minnick at (517) 908-0301 or sminnick@mml.org.
Andy Schor is the Assistant Director of State Affairs for the Michigan Municipal League. Contact him at (517) 908-0300 or by email at aschor@mml.org.
