Mount Pleasant’s city commissioners are urging people to vote yes on Proposal 1 in the August 5 election.
The state-wide proposal would remove personal property taxes from businesses and replace the lost revenue with state funding in a use tax.
The current personal property tax places a tax on items they have already purchased and paid a six percent sales tax on. Items that can be taxed include heavy machinery, refrigerators and other items that depreciate in value over time. Proposal 1 would not increase taxes on residents, according to a Detroit Free Press article supporting the ballot initiative.
City Commissioner Matthew Sous said the city has been planning to take a big hit in the budget with the repeal of the personal property tax. However, Proposal 1 would replace the lost revenue for the city.
“A big reason we support Proposal 1 is if it’s passed, the state can have what it wants by phasing out the personal property tax but it can be done by not affecting local communities,” Sous said.
Proposal 1 would create an agency separate from the state government to levy a use tax. The money from that tax would then be distributed to the local governments around the state.
Michigan is one of the few states left in the Midwest with a personal property tax. Other states have done similar measures. Mount Pleasant is one city on a list of 17 that have created resolutions to support Proposal 1. Other cities include Frankenmuth, Kalamazoo, Grayling and Madison Heights.
City Commissioners approved the resolution supporting Propsoal 1 at their June 9 meeting.
“The City of (Mount) Pleasant City Commission… expresses its strong support of Proposal 1 to eliminate the unfair double tax and strengthen our communities,” according to the resolution available on the city website.
City Manager Nancy Ridley said the city would lose around $600,000 in revenue without the personal property tax. Proposal 1 would replace that money with the levied tax.
“We’re interested so that city revenues can remain stable, yet eliminate what is looked at as a disincentive for businesses to expand in Michigan,” Ridley said. “It’s really about the impact on businesses and the impact on the local government. We wouldn’t get any replacement revenue. We would have to find a way to increase other revenues or reduce services by $600,000.”
Check back with cm-life.com for more stories on the Aug. 5 ballot proposals.