Business community wins with passage of Proposal 1

Posted by on August 6, 2014

The business community scored a big win Tuesday night, with Michigan voters approving Proposal 1, thus ensuring the elimination of the industrial personal property tax.

With 98 percent of precincts reporting statewide as of early Wednesday morning, the proposal passed 69-31.

Proposal 1’s passage also ensures approval of a plan supporters say will allow local communities to continue to receive the revenue the tax generated.

Tuesday’s win was never a sure thing, despite there being no organized opposition. The group Michigan Citizens for Strong and Safe Communities, primarily backed by big business, shelled out about $7 million to secure the victory.

The proposal, which sought to create the funding stream for local communities following the repeal of the state’s industrial personal property tax, was widely endorsed by business, labor and local government groups.

But voters have a history of opposing confusing ballot measures that deal with tax issues; this one was written by lawmakers and contained nonspecific phrases like “modernize the tax system” and “help small businesses grow.”

The ballot language never mentioned the phrase “personal property tax.”

Supporters tried to boil it down to a simple message: This will help small businesses grow jobs and this is not a tax increase. Many of the ads featured business owners and pieces of factory equipment purchased decades ago on which  they were still forced to pay personal property tax.

No matter how often that sentiment was expressed in countless television and radio ads and mailers, some just didn’t buy it.

Warren Mayor Jim Fouts was perhaps the most notable and vocal opponent of the proposal.

“This is a con job,” Fouts said on WKAR’s “Off the Record” last weekend. “This is a hoax designed to con the citizens of Michigan into voting for something that’s really primarily going to benefit one group and that’s the industrial manufacturers.”

Fouts took issue with the mailers from Michigan Citizens for Strong and Safe Communities that claimed the proposal is geared toward helping small businesses. It will actually benefit large corporations more, he said. And that was clear to him, when the campaign finance filings showed that of the more than $8.3 million raised to support Proposal 1, $2 million came from Ford Motor Co., $500,000 from General Motors Co. and $250,000 from Chrysler Group LLC. The Michigan Manufacturers Association also kicked in more than $2.8 million.

Fouts said he also didn’t trust state officials to send the replacement revenue back to municipalities like his city of Warren.

Samantha Harkins, director of state affairs for the Michigan Municipal League, said although the proposal was not perfect, she supported it, because if it failed, municipalities might have ended up with a worse deal later on.

Source: http://www.crainsdetroit.com/mobile/article/20140805/NEWS/140809927/business-community-wins-with-passage-of-proposal-1

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