Strong Debate Over Tax Repeal

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The repeal of the personal property tax law has two clear arguments.

"Businesses clearly want to see us reduce those taxes so that they can invest in their companies and provide more jobs," Spokesman for Speaker of the House Ari Adler said. "We have municipalities and their organizations who want to protect that revenue source, so we're trying to strike a balance, and hopefully it all works out in the end."

It's an end many were hoping wouldn't come before this session ends, especially when there are still questions about replacement rates for the cities. Proposed changes include repealing the tax over a few years, and all the money for police, fire, and education would get fully reimbursed; while 80 percent of the money used for non-essential purposes would be reimbursed.

"I think we need to slow down," Representative Vicki Barnett (D - Farmington Hills), said. "The rest of my caucus members believe we need to slow down, and I indeed as a financial planner in my private life believe we need to slow down, especially in light of the fact there's a lot of moving parts, and we have no fiscal information."

Some have done their own research. Lansing Mayor Virg Bernero estimates it will cost the city $1 million.

"Our citizens expect certain services, and we cannot just keep taking hit after hit," Mayor Bernero said. "So, it would add to our woes. We'll make the tough decisions, it won't be pretty. We would make cut immediately."

While many businesses expressed interest in a repeal, the mayor said he hasn't gotten that impression locally.

"I talked with small businesses and medium sized businesses and big businesses like General Motors all the time, and this issue really hardly came up," Mayor Bernero said. "I don't hear from businesses demanding that this get done right now."

Supporters of the repeal argue it prevents jobs from being created, and when it comes to jobs, there's no time to waste.

"We certainly do not want to leave municipalities in a lerch without being able to afford some essential services, but at the same time we need to help them by providing some opportunities for expansion of companies in their area and more jobs for their residents," Adler said.

Some communities are less affected by the personal property tax. The Mayor Kalmin Smith of Grand Ledge said a repeal would be insignificant for the city, but he is concerned for larger communities.

The reimbursement money would come from the state "use" tax, and that would have to be approved in a state-wide vote in 2014.

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