Michigan's Personal Property Tax!



"Replace Don't Erase" is a call to action to the state Legislature to fully replace the personal property tax with revenues that would continue to go to local communities for essential local services. The effort to reform the personal property tax has been ongoing in the Michigan Legislature for many months and a package of bills was approved in the Michigan Legislature on Dec. 13, 2012 and now await signing by Governor Snyder. Go here to read a Michigan Municipal League blog post about the package of bills approved during the lame duck session of the Michigan Legislature.

Earlier Status Updates:


Read the letter from the Coalition to Lawmakers, sent Dec 11, 2012

The Senate Finance Committee has posted to hear testimony on Wednesday morning on House Bills 6022, 6024-26, which create the reimbursement scheme for personal property tax repeal as outlined in the Lt. Governor's plan. CONTACT YOUR LEGISLATORS! Without full, guaranteed replacement, state Legislature should not pass what's being considered!! Read the latest update from Samantha Harkins.

Latest News, 12/3/2012:

The Replace Don't Erase Coalition hosted a media roundtable on the personal property tax issue last week. The roundtable was timed to take place immediately after a roundtable in the same subject held by the Lt. Gov. We had about 10 media members attend and much of the coverage so far has been favorable to cities and coalition members. The Michigan Municipal League's Lansing staff is working extremely hard at making sure all questions are answered as the ppt bills move through Lansing. A conference call with league members about the latest on the ppt also took place Monday.

11/27/2012: A letter was sent by the Replace Don’t Erase Coalition to Lt. Gov. Brian Calley outlining the concerns of a new Personal Property Tax Reform proposal. The letter states the Coalition is supportive of a solution as long as it provides replacement revenue by a consistent, reliable source. Read the letter.

SFA Analysis

Progress has been made in the effort to reform the state's business personal property tax. Thanks to the leadership of Lieutenant Gov. Brian Calley, we believe the new proposal presented in concept for the 2012 Lame Duck session of the Legislature is a significant improvement over Senate Bills 1065-1072. However, serious concerns over these bills were raised in a recent Senate Fiscal Agency (SFA). All of the concerns in the SFA analysis echo issues we have raised for the past year.

But the new proposal released in mid-November of 2012 is still very much in concept form. And there are still many significant issues that must be resolved in this brief Lame Duck session before we can take a position on it or even ask our members what they would like us to do. We have communicated our concerns to the Lieutenant Governor in writing.

We remain hopeful that these issues can be resolved and that we can reach agreement on a package that reforms a tax that is bad for the Michigan businesses that pay it and for those of us in local government who must administer it. However, we will withhold judgment on the proposal until we are certain it will not lead to automatic property tax increases for local citizens in hundreds of communities across the state, will not result in more massive cuts to public safety and other essential services, and assures assures replacement of the local revenues being taken from local communities and local schools.

As the SFA analysis notes, Senate bills 1065-1072 do threaten local taxpayers and local services because they do not require the Legislature to repay one dime to the local communities and local schools that would be cut. In addition, as the SFA notes, the current Senate bills do not contain one penny the Legislature could use to repay local communities and schools.

It appears we are making progress thanks to the efforts of the Lieutenant Governor. However, the Lame Duck Legislature has only a few business weeks left. Many controversial and complex issues are pending action, including this one. It's not good enough to just get this done. It must be done right. If we rush something into law in a Lame Duck environment that results in automatic local property tax increases for hundreds of local school districts and that results in massive cuts to public safety and other essential local services, we will have done far more harm than good. We are pretty certain no one in the Legislature wants to vote for automatic local property tax increases on their constituents and no one in the Legislature wants to take hundreds of millions of dollars in local revenues away from the communities they represent without being assured the funds are replaced. That's our goal too.

PPT Elimination Will Trigger Automatic Local Property Tax Increases


Local Municipality Reliance on PPT By % and $$
County Reliance on PPT By %
County Reliance on PPT By $$

If the Legislature eliminates PPT revenues without assuring full replacement of the funds: Homeowners in more than 400 local Michigan school districts face automatic property tax increases. Hundreds of local communities face more cuts to police and fire protection, safe drinking water, libraries, parks, road repairs, and more. If the Legislature does not settle the issue in its lame duck session after the Nov. 6 elections, the 97th Legislature that convenes next year likely will. Don’t rely on a promise from Lansing that revenues might be replaced – full replacement must be guaranteed.

This issue affects all levels and types of government including schools, libraries, counties, cities, villages and townships. Organizations representing these local government units and the services that stand to lose the most, have banded together to bring attention to this issue. 


Issue Summary
Talking Points

Twitter hashtag: #replaceppt

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