Take Action Today!
All Michigan Municipal League members, please contact your legislators and Gov. Rick Snyder today. Urge them to replace, don't erase the personal property tax. It is only when our voices are raised together that we can be strong enough to have our message heard. Help make sure our future is in our hands.
The personal property tax is now one of the most important and stable sources of funds for local governments in Michigan. If ended, it must be totally replaced by a stable and constitutionally guaranteed source of funds.
The personal property tax makes up more than 50 percent of the taxable value of some Michigan communities. The average Michigan community gets about 11 percent of its revenues from the personal property tax.
Local government budgets across Michigan have been financially devastated in the past decade.
Declining real property values have drained hundreds of millions of dollars from local budgets as property tax revenues have plummeted.
In addition, the Legislature and Governor have repeatedly broken the state's promise to provide revenue sharing to local communities across Michigan. In the past decade or so, state lawmakers have cut more than $4 billion in revenue sharing to local communities, causing massive police and firefighter layoffs and cuts to other basic citizen services such as road repair and maintenance, lawn mowing for safety, snow plowing, and more across the state.
Local police and fire protection and other essential citizen services can’t absorb another $1.2 billion funding cut in light of reductions of revenue sharing.
To protect local Michigan citizens in their homes, businesses and neighborhoods, any personal property tax repeal must include a guaranteed full replacement of the funds.
The personal property tax is one of the most important and most stable sources of funds for local communities across Michigan. While it is difficult to administer for all parties, it is not subject to the annual political budget battles in Lansing.
Michigan is one of 43 states that levies some form of personal property tax.
Many of these states give local governments the authority to generate other funds (local sales, use or business taxes) if their state revenues are slashed. Michigan local governments do not have those local funding options.
Repealing the personal property tax — without replacing the revenues — would leave local Michigan governments with no way to pay for the local services citizens and businesses expect.
The personal property tax must be replaced with a stable source of funds that protect local citizens in their homes, businesses and neighborhoods … that enables local governments to pay for police and fire protection, clean drinking water, snow plowing in the winter, and more.
By “stable” we mean the funds must be constitutionally guaranteed for essential local government services only, similar to revenues generated by the personal property tax. They can’t be available for raids by the Legislature, like revenue sharing funds have been.
Other states have reformed their personal property taxes by fully replacing the funds directly or by giving local governments authority to replace the funds.
Replacement must be proportionate to the amount each community has lost.
Because communities’ reliance on personal property tax is extremely varied from city to city, you simply can’t keep them on equal footing by using any other formula, such as one based on population.
Replacement must be constitutionally guaranteed.
Most cities have bonds for TIF districts that are made up, in larger part, by the personal property tax from a business district. There would be a serious risk of locals defaulting on bonds. If in the future, communities want to bond for larger infrastructure improvements or capital projects, there is no way they’d be able to sell bonds based on a type of revenue sharing annual appropriation. Communities need stable revenue. Without a guaranteed replacement, infrastructure improvements across Michigan would be jeopardized.
Our community’s reliance on the personal property tax is increased due to revenue sharing cuts from Lansing.