This morning, the House Tax Policy once again took testimony on HB 5059, which would allow local units of government to ask the voters to approved a per-drink tax of up to 50 cents. Rep. Marie Donigan (D-Royal Oak), sponsor of the bill, testified about the challenges that locals are facing and how Royal Oak will be laying off police and fire and building officials and other workers. She reiterated that this would be a local decision.
The liquor industry said that this is an unfair tax on an already-high taxed industry. They said that Michigan will be uncompetitive with other states, and they said that they will have to pass this on to their customers. They argued that businesses in these communities will see less customers and they argued that it will result in higher costs because they will have to work out how to remit the taxes.
I testified last on the bill and reminded the committee members that this is a matter of local control. I also reminded the committee members that locals are hurting and, in addition to layoffs and efficiencies, locals have had to ask for tax increases. Grand Rapids, Wyoming and Kentwood residents just approved increases, showing their support for local government. I also told the committee that residents are happy to pay taxes, but visitors should also have to pay for local police and fire services. It is not fair for residents to have higher taxes to support public safety and community services for visitors.
The Chair of the committee did not say if or when the bill will receive a vote.
Andy Schor is the Assistant Director of State Affairs for the Michigan Municipal League. Contact him at (517) 908-0300 or by email.
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