Should Michigan Voters Repeal Personal Property Tax (Proposal 1)?

[XLFD]

Unlike the year 2012 which had a half dozen statewide proposals in November, Michigan voters will only have one proposal on the ballot this year in the August primary:  to repeal the personal property tax paid by businesses and manufacturers.  Yesterday, the State Board of Canvassers labeled it as Proposal 1 in preparation of getting it ballot-ready. 

State lawmakers already have voted to repeal the tax.  But, by law, the issue still needs voter approval.  The measure includes wording and procedures that would reimburse cities for their lost personal property tax revenue with other state revenue.  Many Michigan communities rely on the tax revenues to pay for basic city services.

The personal property tax is paid only by businesses and manufacturers. It’s based on the value of their equipment and other assets.  For this reason, they are against it as is the Chamber of Commerce. 

Communities with a lot of businesses and factories currently rely heavily on this tax, though it can be a bureaucratic nightmare to manage, and deal with the inevitable requests for tax abatements by affected businesses and manufacturers.

[Willy]

Most folks who will vote against repealing the "business tax" do not realize that all taxes paid by businesses are just past on in the cost of their products or services. The public thinks they're not paying for it and of course will have no qualms about taxing someone else. This is the same scenario for locals raising taxes on non homestead property. I'm all for making tax burdens on everyone a little lighter especially businesses who hire locals. This has been the same story for years and that is Government agencies spending more money than they have so instead of cutting costs they raise the taxes. A perfect example is the million dollar marina addition which is hardly used. Wasted and squandered money that should have stayed in the public's pockets. I took the photo below during this years Memorial weekend and there are only 2 boats docked at the facility. One is the Harbor Patrol boat at the west end and a private fishing boat at the east end. Hardly enough revenue can made off these two boats to cover the additions expenses.

[XLFD]

The transient docks of the Ludington Municipal Marina are an excellent example of government waste on a grand scale.  Half of the million dollars came from the locals, the other half from the State to construct a seawall that ruined the appearance of the marina overall, and added these unused docks, when the marina's other transient docks remain mostly unused.  I could think of a lot of infrastructure projects that had needs at the time, but have been ignored, because Mayor Henderson wanted this so badly.  As this is a government owned facility, it will not be affected by the tax shift. 

The worse thing about wasting a million on this and having our State continue to subsidize our city marina since (last year's dredging, proposed dock replacement) was that it gave our city's marina a vast competitive advantage over our local private marinas, almost all of which predated the city marina, and incapable of getting financial help from the city or state, both government entities of whom take money from them in property taxes.  The state and city can't even play fair by honoring the promises they have made throughout the years to those they compete unfairly against.  Such unjust practices will likely lead to the end of private marinas as we know it, because they simply can't compete with those who can set the rules as they like it and get subsidies from the people via the State Waterways Commission.

[AQUAMAN]

Well said X. The unfair and unjust advantages are not just the obvious we see daily, it's a lot more. Like $50K fish cleaning stations, picnic pavilions with expensive vinyl coated tables, benches, and trash receptacles placed everywhere. Contracted fuel purchases for huge volumes of fuel sales. Charterboats that are illegal to dock there. All this and the public at large is not allowed to come use these as they are for paying customers/boaters only. Harbor View even has a Jacuzzi and pool to boot. How are local marina owners going to match all that?

[Willy]

Good points Aquaman and X. I remember X posting about trying to use the bathrooms at the City marina when he was walking with his daughter and the doors were locked  and remained locked unless you had a key which was only available to boat slip renters. The City Marina is not a "private" club. It belongs to the taxpayers and we cannot even use the bathrooms unless we rent a boat slip. They Use our money to build and maintain a marina and it's facilities then lock us out of it. 

[Jane]

Yes, I also think it is wrong that the restrooms are locked. They can use my tax money for themselves to build this but then I can't go take a bathroom break there. Total BS! They could just leave them unlocked and aim some cameras at the toilets like they do next door at the playground restrooms!

[Willy]

Jane, you have brought up a very good question. Are there cameras in the Marina bathrooms? If not, why not? And if they are there I wonder how many of those golden key holders know they are being peeped on?

[XLFD]

It's just inconceivable how the state has spent millions of our tax dollars on the Ludington Municipal Marina and the Harbor View Marina over the years to create this situation.  Where is the Chamber of Commerce in all this, and their supposed advocacy of the business community? 

Totally absent, while these marinas slowly kill off the private marinas in Ludington and elsewhere by being able to offer discount gas rates and state-subsidized infrastructure and improvements to the city marinas.  Would they be silent if our local gas stations were bled to insolvency by a municipal gas station or two that could sell gas under the rate which the other gas stations buy their gas? 

[AQUAMAN]

We could also ask the question of why only this private sector business type? Why not have publicly funded ice cream stands, hot dog stands, barbershops/hair salons, grocery stores, fudge shops, souvenir shops, bakery's, and much more. The level playing field in the marina business is far from level around Michigan! And all this comes right out of all our pockets in taxes!

[XLFD]

 Something I'm still trying to figure out, even with the Ballotpedia description of Prop 1 :

The taxes raised by the Personal Property Tax will be lost, this is a loss of tax revenue for localities, and the state will replace 100% of those revenues with Use Tax revenues.  They will do so by creating an authority for doling out the funds otherwise lost to communities.  It still seems unclear to me as to how they can do so in a fair manner.  Some communities have little or none personal property tax revenue, others are very dependent on it, but the underlying bases are somewhat fluid. 

From whom does the replacement tax revenue come from primarily?  Businesses are getting a tax break, most businesses and the chambers of commerce are for this, meaning that they believe this will work out as less taxes on their business, but wouldn't that mean that every individual in Michigan would now have a heavier tax burden?