Wayne
County Taxpayers Association Position Paper
Proposal
1
APPROVAL
OR DISAPPROVAL OF AMENDATORY ACT TO REDUCE STATE USE TAX AND REPLACE WITH A
LOCAL COMMUNITY STABILIZATION SHARE TO MODERNIZE THE TAX SYSTEM TO HELP SMALL
BUSINESSES GROW AND CREATE JOBS
The
amendatory act adopted by the Legislature would:
1.
Reduce the state use tax and replace with a local community stabilization share
of the tax for the purpose of modernizing the tax system to help small
businesses grow and create jobs in Michigan.
2.
Require Local Community Stabilization Authority to provide revenue to local
governments dedicated for local
purposes, including police safety, fire protection, and ambulance emergency
services.
3.
Increase portion of state use tax dedicated for aid to local school districts.
4.
Prohibit Authority from increasing taxes.
5.
Prohibit total use tax rate from exceeding existing constitutional 6%
limitation. Should this law be approved?
************(*
I want to
state that the Personal Property Tax is a horrible tax and a burden to business
and employment. If I were to say to the average taxpayer that their stove,
refrigerator, washer, dryer and any other appliance or furniture were all subject
to personal property tax for 10 years after purchase with a reduction each year
for depreciation, we would have a revolt.
Anyone
wishing to understand how the tax works and its effects can go to Personal
Property Tax Reform in Michigan The Fiscal and Economic Impact of SB 1065-SB
1072, Anderson EconomicGroup http://
This is not
just an elimination of the Personal Property Tax for some small businesses. It
is about much more. It is my estimation
that it was not necessary to place anything on the ballot to allow the
reduction of that tax. Everything they needed is presently included in the
State Constitution as defined in the Headlee Amendment.
Article IX Michigan Constitution
§ 25 Voter approval of increased local taxes; prohibitions;
emergency conditions;
repayment of bonded indebtedness guaranteed; implementation of
section.
Sec. 25. Property taxes and other local taxes and state
taxation and spending may not
be increased above the limitations specified herein without direct voter
approval. The state is prohibited
from requiring any new or expanded activities by local governments without full
state financing, from reducing the proportion of state spending in the form of
aid to local governments, or from shifting the tax burden to local government.
A provision for emergency
conditions is established and the repayment of voter
approved bonded indebtedness is guaranteed.
Implementation of this section is specified in Sections
26 through 34, inclusive, of this Article.
§ 26 Limitation on taxes; revenue limit; refunding or
transferring excess revenues;
exceptions to revenue limitation; adjustment of state revenue and
spending limits.
Sec. 26. There is hereby established a limit on the
total amount of taxes which may be
imposed by the legislature in any fiscal year on the taxpayers
of this state. This limit shall not
be changed without approval of the majority of the
qualified electors voting thereon, as
provided for in Article 12 of the Constitutio n……. If responsibility for funding a
program or programs is transferred from one level of government to another, as
a consequence of constitutional amendment, the state revenue and spending
limits may be adjusted to accommodate such change, provided that the total
revenue authorized for
collection by
both state and local governments does not exceed that amount which would have
been authorized
without such change.
§ 29 State financing of activities or services required of local
government by state
law.
Sec. 29. The state is hereby prohibited from reducing the state financed
proportion of the
necessary costs
of any existing activity or service required of units of Local Government by
state law. A new
activity or service or an increase in the level of any activity or service
beyond
that required by
existing law shall not be required by the legislature or any state agency of
units of Local
Government, unless a state appropriation is made and disbursed of Local
Government for any necessary increased costs. The provision of this section
shall not apply to costs incurred pursuant to Article VI, Section 18 to pay the
unit.
There are 10
Senate Bills connected to this proposal. Nowhere in the ballot language is a
Personal Property Tax mentioned specifically. The bills range from SB821
through SB830. For brevity and simplification I will address SB822 which must
be passed for most of the others to take effect.
.
We start our problem with the establishment of yet another Authority which would be granted enormous power. Since this new Authority would not be elected by the voters, there would be no true accountability but they would have the responsibility of handling a huge amount of our money.
We start our problem with the establishment of yet another Authority which would be granted enormous power. Since this new Authority would not be elected by the voters, there would be no true accountability but they would have the responsibility of handling a huge amount of our money.
“BEGINNING
ON OCTOBER 1, 2015, THE SPECIFIC TAX LEVIED UNDER SUBSECTION (1) INCLUDES BOTH
A STATE SHARE TAX LEVIED BY THIS STATE AND A LOCAL COMMUNITY STABILIZATION
SHARE TAX AUTHORIZED BY THE AMENDATORY ACT THAT ADDED SECTION 2C AND LEVIED BY
THE
AUTHORITY,
WHICH REPLACES THE REDUCED STATE SHARE AT THE FOLLOWING RATES IN EACH OF THE
FOLLOWING STATE FISCAL YEARS”
Legislation then goes on to define
the state’s portion of “THE LOCAL COMMUNITY
STABILIZATION
SHARE TAX RATE TO BE LEVIED BY THE AUTHORITY IS THAT RATE CALCULATED BY THE
DEPARTMENT OF TREASURY ON BEHALF OF THE
AUTHORITY…
THE STATE SHARE TAX RATE IS THAT RATE DETERMINED BY SUBTRACTING THE LOCAL
COMMUNITY STABILIZATION SHARE TAX RATE FROM 6%.”
The state
then declares the revenue portion from 2015-2016 through 2029 without knowing
the accuracy of the amount listed. They will also be committing future
legislatures to a dollar amount.
This
Authority would be granted an enormous responsibility. That cannot be good for
taxpayers. The line in the proposal that
limits the used/sales tax to 6% does not address the expansion of the sales tax
to, for example, internet purchases or fines or penalties for failure to
comply. It does not address other things that they may choose to include as
taxable by the sales tax which they seem to think they have the authority to
adjust.
Whatever your
feelings on taxes, this proposal does not give the taxpayer more security. The
language does not reflect the full nature of the outcome if it passes. If you have concerns, I will be glad to
forward copies of the bills. Please feel
free to contact me with any questions or comments. wctaxpayers@comcast.net .
313-278-8383.
The Wayne County Taxpayer Association suggests vote NO on
Proposal 1
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