Traverse City Record-Eagle

Opinion

July 13, 2014

Forum: Vote 'yes' on Prop 1 on Aug. 5

The range and depth of support for Proposal 1 on the Aug. 5 statewide ballot is impressive. Rarely does a statewide ballot proposal have such broad support from across Michigan — north to south, east to west — across political divides, and across a wide variety of organizations, from business to labor to local government to public safety.

Proposal 1 does not raise taxes and it does not involve a constitutional amendment.

The proposal asks voters to approve changes to the way local governments are reimbursed for providing important local services, including police, fire, jails, ambulances, schools, libraries and roads. Those services are currently supported by unstable, unreliable Personal Property Tax (PPT) revenues paid by local small businesses and manufacturers.

Proposal 1 would keep in place PPT reforms approved by the Michigan Legislature with strong bipartisan support. Those reforms end Michigan’s unfair, antiquated double tax on local small businesses and change the way local manufacturers are taxed on equipment.

Small businesses across Michigan have literally paid the price for this uncompetitive tax. Patrick Curry is the owner and president of Endurance Carbide, a third-generation family company founded in Saginaw in 1942. The company has paid the unfair tax every single year since 1966 on a Landis External Grinder — nearly a half-century of taxation on a single piece of equipment.

The Personal Property Tax siphons money that businesses could instead invest in growing their business and creating jobs in northern Michigan.

Most neighboring states don’t tax business equipment, which puts Michigan at a competitive disadvantage. Eliminating the Personal Property Tax is expected to create up to 15,000 jobs and $450 million in new business investment.

But Proposal 1 does not simply benefit business.

Proposal 1 creates a reliable system for funding local services by eliminating corporate tax breaks and establishing a statewide Essential Services Assessment paid by manufacturers receiving a Personal Property Tax reduction. There would be no tax increases on anyone.

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