Press Release

FOR IMMEDIATE RELEASE
November 16, 2011

CONTACT: Matt Bach
Dir. of Communications
Michigan Municipal League
(734) 669-6317 or mbach@mml.org

AEG Report Confirms Financial Devastation to Michigan Communities if PPT is Eliminated

LANSING, Michigan – A report issued today by the Anderson Economic Group (AEG) about the Michigan Personal Property Tax affirms what the Michigan Municipal League has been telling legislators, the media and our citizens for months:

Eliminating the personal property tax without replacing the revenues would financially devastate local communities across Michigan—from small, rural communities to our largest commerce centers that serve as regional engines for the state’s economy.

In addition, erasing the tax without replacing it would also cause significant harm just short of total financial devastation to hundreds more local governments and school districts.

While municipal officials would agree that the personal property tax (PPT) is far from a perfect tax, the fact is that it is now one of the most stable sources of funding for local governments. It makes up more than 50 percent of the taxable value of some Michigan communities. The increasing importance of this tax is why the League and a coalition of other organizations launched the “Replace Don’t Erase” campaign regarding this issue.

The AEG report states that PPT makes up about 2.7 percent of “non-school local government revenue” and just over one percent of revenue for schools.

However, when looking at just Michigan cities, the PPT represents about 11 percent of the taxable value of the average city in Michigan. This is significant because most of the state’s jobs are in Michigan’s metropolitan areas–namely cities.

“We appreciate AEG confirming that some of our largest and most populous cities would be drastically impacted by the elimination of the PPT. Our cities are the economic driver of Michigan and eliminating one of the most stable funding sources to those cities would most certainly result in cuts in the services our residents want–police and fire protection, water and sewer service, and roads and garbage collection, just to name a few,” said Dan Gilmartin, CEO and Executive Director of the Michigan Municipal League. “People won’t want to live in communities that can no longer afford those vital services. We should be talking about ways to make our communities stronger, not about tax cuts that will continue to push our educated workforce to other states.”

In the past decade, local governments in Michigan have already seen revenue sharing cut by more than $4 billion by the governor and legislature.

The League has been advocating for the full replacement of the personal property tax for months and has joined a coalition of other organizations regarding this issue. View the official “Replace Don’t Erase” webpage here; read a fact sheet about the PPT tax; and go here to view information about the coalition member organizations. To obtain data showing how much tax revenue each community in your coverage area stands to lose, contact Matt Bach at the Michigan Municipal League at mbach@mml.org or 734-669-6317 (cell: 810-874-1073).

Michigan Municipal League advocates on behalf of its member communities in Lansing, Washington D.C., and the courts; provides educational opportunities for elected and appointed municipal officials; and assists municipal leaders in administering services to their communities through League programs and services.

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