Chamber supports PPT ballot question

May 28, 2014

LUDINGTON — At its May 15 meeting, the Ludington & Scottville Area Chamber of Commerce Board of Directors voted in support of the August 2014 ballot question to dedicate revenues to local units of government in order to provide reimbursement of personal property tax revenues.

Legislation to begin phase-out of Michigan’s business personal property tax was recently signed into law by Gov. Rick Snyder. The legislation will implement a small business exemption beginning in 2014, as well as a manufacturing equipment exemption generally beginning in 2016.

“Our local governmental units rely on the personal property tax as a source of operating revenue,” said Kathy Maclean, president/CEO of the chamber. “The Ludington & Scottville Area Chamber of Commerce has been a strong advocate for eliminating the personal property tax in a responsible manner that recognizes the need for adequate revenue replacement options for local governments.”

Maclean said as part of this legislative package, two sources of revenue were statutorily identified in order to substantially reimburse local governments for revenue forgone from the exemptions:


  • Dedicating the pool of money that will be realized to the state once tax credits from the Michigan Business Tax expire (this money is currently considered an “appropriation” that, once expired, presents a net positive stream of revenue to the State of Michigan.) This revenue stream would flow through the Use Tax Act (although there would be no change in amount or rate of Use Tax charged to, and collected from, Michigan taxpayers for this effort.) The money would be distributed to local governments through a Metropolitan Authority.

  • An Essential Services Assessment that could be levied only on those businesses with manufacturing equipment who chose to take personal property tax relief in order to re-coup part of the cost of providing police, fire, ambulance, and jail services.

“The legislation reimburses local governments and schools for 100% of their personal property foregone from this reform,” Maclean said. “This 100% reimbursement has now prompted local government associations (municipal, county, townships) to wholeheartedly endorse this proposal and a broad coalition that includes business groups, local governments, schools, and first responders, has joined together in strong support of this plan.

“Allowing the stream of use tax revenue (first bullet above) to be dedicated to local governments does require approval of a majority of electors at the August 2014 statewide election before it could take effect. If voters fail to approve this ballot question, the personal property tax relief will fail to go into effect. The impact on our local governmental units would be devastating.”

The City of Scottville would lose close to $40,000 annually, Scottville City Manager Amy Williams said. “That would be quite a hit to our general fund. We would definitely need to re-evaluate our budget and make cuts to essential services.”

The City of Ludington stands to lose about $589,000 in revenue.

“This amounts to about 11% of our general fund revenues and would require the city to eliminate services and/or personnel,” said Ludington City Manager John Shay.


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