Information about Ballot Proposal 14-1

On the August 5, 2014 primary ballot, you will see “Ballot Proposal 14-1, a referendum on public act 80 of 2014 which allocates use tax revenue for various local purposes.”

The Michigan Legislature voted to phase out or eliminate the personal property tax (PPT) on certain business equipment and to replace the lost PPT revenue to local governments, school districts, libraries and other entities by allocating part of the existing use tax to those entities. The Michigan Constitution requires a vote of the citizens to enact changes to the use tax, so the Michigan Legislature voted to place this proposal on the ballot.

Frequently Asked Questions About Ballot Proposal 14-1

Would this proposal raise taxes?

No. This referendum is not a tax increase.

How does this proposal protect local communities?

This proposal creates a stable funding stream for communities in Michigan to pay for police, fire, ambulance, jails, schools, roads, libraries, and other community services. 100 percent of the funding for community services will be returned directly to Michigan communities for these community services. This dedicated funding for community services is no longer subject to the uncertainty and instability of annual legislative appropriations or politics in Lansing.

Does this proposal amend the constitution?

No. This is not a constitutional amendment. The state constitution requires that this bold effort to reduce taxes by eliminating double taxation on Michigan businesses and stabilizing local funding be approved by a vote of the people—or else the tax cut will be repealed.

How will this proposal affect small business?

The proposal provides an immediate tax cut for small businesses. Small businesses stopped paying the double tax on personal property effective January 2014. If the proposal fails, small businesses would immediately go back to paying the double tax on equipment that businesses in many others states don’t have to pay.

How will this proposal affect manufacturing?

The proposal establishes a statewide Essential Services Assessment that is only paid for by manufacturers that receive a Personal Property Tax (PPT) reduction. Large and small manufacturing businesses will see the PPT phased out over time, beginning in 2016.

How is this funded?

It is paid for by eliminating special corporate tax breaks the Legislature had already voted to end, and by establishing a statewide Essential Services Assessment paid only by manufacturers receiving a personal property tax reduction. This proposal does not raise taxes for anybody.

5 Responses to “Information about Ballot Proposal 14-1”

  1. July 16, 2014 at 11:23 am #

    When Ohio Replaced this tax with a different business tax a few years ago, voters started getting requests for additional millage increases because the schools weren't being funded properly. The 100% funding does not detail what this is based on and does not account for additional funds needed due to population increases and the need for new school buildings.

    Jobs will mostly not be created. Small businesses do not typically pay enough ppt to hire even someone temporarily. Larger businesses will put this money into the business and who knows where it will go. Demand will be the major factor when deciding to hire new people.

  2. July 17, 2014 at 9:05 pm #

    Why not ADD the money from the corporate tax breaks to the use tax? Benton Harbor is on the verge of losing its public library, for heaven's sake; the road crews can't fill in the potholes; the teachers pay for classroom supplies. We should add taxes for local needs.

    • August 4, 2014 at 10:10 pm #

      Why not just raise the double taxation to make corporations pay for everything? I took macro and micro economics in college. The truth is that corporations do NOT pay taxes — they raise the price of their products to remain profitable. At some point, the tax burden would require them to become uncompetitive with their lower taxed rivals. When that day comes they would need to either continue to lose market share or move to a tax friendlier environment to remain competitive. Higher corporate taxation always = higher prices for goods and/or loss of jobs.

  3. July 21, 2014 at 5:27 pm #

    This is just another way to shift the burden of paying for our childrfens education from the state back onto our local communities, leaving local communities to find the funding { Raise local taxes }. Holding true to form for our governer who has already decreased funding for education by billions. Saving the state billions therefore giving the apperance that he knows how to manage state funding by saving billions. Throwing our chidrens education under the bus , leaving we the people to vote on shifting responsibility from state funding to local funding. We should be voting on ending Snyders defunding of our education system. Makes perfect sense to me.

    • August 4, 2014 at 4:26 pm #

      Not true. The 14-1 proposal, if passed, should provide continued funding to local communities. What remains unclear is what else at the state level will be cut because a portion of the use tax, previously allocated elsewhere, would not be earmarked for local communities.