Personal Property Tax Changes Concerns Many Michigan Municipal Officials

Posted on March 6, 2013 by Dene Westbrook

Planned changes to the state’s personal property tax have many Michigan Municipal League member communities concerned, as reflected in recent articles posted this week. out of Jackson and the Observer & Eccentric out of Northville each posted stories recently outlining community leader concerns over the financial impact from proposed changes to Michigan’s personal property tax.

Here is part of what Albion City Manager Dan Bishop was quoted as saying on “Starting next year the personal property tax law will change so that businesses with less than $40,000 in assets will not pay the tax by fiscal year 2014. The tax will be phased out in anywhere from five to seven years. It’s a target that keeps moving.”

Under the headline “State lawmakers get earful from Northville, Plymouth leaders on elimination of personal property tax” here is a portion of the O&E article:

“Northville faces an estimated 2014 loss of $59,113 while Plymouth stands to lose $38,580 in PPT revenue, officials said. Those figures are net of state replacement money (which does not apply in Northville because of the PPT’s small effect on the overall tax base) and money from local assessments, subject to local votes, designed to replace PPT money that goes toward public safety purposes. We are really concerned when we see these numbers — you know in our situation 97 percent of the loss is going to be lost to the city under the current setup,” Northville Mayor Chris Johnson told State Rep. Kurt Heise, R-Plymouth Township, and state Sens. Patrick Colbeck, R-Canton Township, and Mike Kowall, R-White Lake Township, at the meeting. Northville has 429 parcels out of 471 being impacted by the change, which is about 91 percent of the businesses. This is a net loss of 97 percent of the revenue the tax generates.”

League staff is well aware of the concerns our members have over these proposed changes and continue to work with lawmakers on the issues. Stay tuned to this Inside 208 blog by Michigan Municipal League staff for regular updates on this topic.

To help calculate a the impact of the new personal property tax reform on our communities, the Michigan Department of Treasury has put together a spreadsheet that you can find here: PPT Plan Local Unit Worksheet 12 17 12.xls (40.50 kb).

For further reading check out recent Lansing State Journal and Detroit Free Press editorials about the uncertain future of municipal finances.

Matt Bach is director of media relations for the Michigan Municipal League. He can be reached at [email protected].

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