And like many of you, I had barely even thought of looking into this Proposal 1 ballot initiative that Michiganders will vote on this August 5th. I’d heard some talk about it, and we even aired a few political ads on WSGW supporting this measure.
It wasn’t until The Morning Team Show’s Charlie Rood decided to make the Proposal 1 question as our weekly web poll vote that I thought I should look into this thing.
Proposal 1 is an initiative written by the state legislature, and it’s received heavy backing by Republican Governor Snyder, Republican and Democratic leaders, The Michigan Chamber of Commerce, the Michigan Association of Counties, Michigan Municipal League and Michigan Townships Association, unions, and by several local business and community leaders, like the Saginaw and Midland Chambers of Commerce.
On top of all of the wide-range of support I just mentioned, The Detroit Free Press (hardly a bastion of conservationism) announced its enthusiasm for Proposal 1, saying both businesses and municipalities–and ultimately the state–will benefit.
So, what is Proposal 1?
In a nutshell, it’s a horribly-written, mind-numbing initiative written by the state legislature, asking voters to approve an elimination of the Personal Property Tax on businesses across the state. Backers of the proposal say corporations and small businesses are stuck with having to pay for a “double tax,” in that businesses not only pay the sales tax for equipment, but they must also pay this Personal Property Tax on the equipment each year.
Local municipalities count on the money generated by the PPT, and so in order to still get money, the state legislature has created a replacement tax in the ballot initiative. The replacement tax would divert some of the state’s use taxes back to the local governments. A use tax is where items that come into the state are taxed, like telecommunications, hotels, rentals and leases, and anything else that enters the state not subjected to sales taxes.
Anyway, with the PPT reduction, the state legislature is saying the funds will be offset by diverting the use taxes back to local communities.
So, it’s a win-win for businesses, who no longer have to pay for the PPT, and for municipalities, who really aren’t losing any money in the long run.
Or so the supporters of this convoluted and shady ballot initiative want us to believe.
While there’s no organized opposition to this initiative, it seems like many Michiganders across the political spectrum aren’t as trustworthy of those in power who are touting this as an economic panacea.
Polls show Proposal 1 garnering just 31% support, and a whopping 47% not sure what to make of the whole thing.
For me, when you have supposed pro-business leaders, combined with strong Republican and Democratic leadership support, I become suspicious.
Like with the fight against the nationwide movement to enact Common Core Education Standards, many Americans aren’t comfortable whenever government and big business work hand-in-hand. I think ever since the Wall Street bailouts, Americans just aren’t as excited to trust corporations, and their benefactors in state and federal governments. This is where Tea Party and Occupy Wall Street advocates actually do see eye-to-eye.
Proposal 1 will, among other things, establish some kind of nebulous Local Community Stabilization Authority, which the proposal says will have the job of divvying up the use taxes to local communities.
Who comprises of this “Authority?” What kinds of oversight does Proposal 1 provide to ensure this “Authority” is on the up-and-up. How much will it cost to run this “Authority?”
I don’t like the sound of that.
Secondly, I want firm numbers and guarantees that local municipalities will not lose money if this proposal passes.
I haven’t been able to receive those numbers.
I don’t like the sound of that, either.
And I’m also not a big fan of blackmail. State legislators have told local communities that if this proposal fails, the legislature may just end up passing its own bill to end Personal Property Tax without ever providing a replacement tax.
No wonder municipal leaders are backing this! Although, I really wonder if state legislators would have the guts to do that.
Finally, the House Fiscal Agency says the money from the use tax that will supposedly make-up for the loss of the PPT means there will be LESS money for other essential services! That means spending for Medicaid, corrections, public and community colleges and transportation spending will all suffer.
Well, isn’t that wonderful!
I’m sorry, but this Proposal 1 just seems like another scheme where a connected corporations get tax breaks, and we’re left wondering how to pay for their breaks. And how many times am I going to hear the tired and tried mantra that more tax cuts will lead to more jobs.
As Warren Mayor James Fouts wrote in his scathing attack on Proposal One:
It has been our experience that businesses choose to locate and invest in communities for a variety of reasons, only one of which is low taxes. Qualified workers, excellent transportation, reliable infrastructure, dependable public services, quality schools and desirable neighborhoods are all important ingredients.
The double-tax argument backers of Proposal 1 say is unfair is perhaps a legitimate debate, but there has to better a way to address that issue.
From my perspective, Proposal 1 is just another giveaway to the connected. They’re getting the benefits, while Michigan loses-out on developing an educated and quality workforce, along with dependable infrastructure and public services.
Proposal 1 is just another way for the connected to win while the rest of us lose.