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Wyoming City Manager's Blog - Personal Property Tax | News

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Wyoming City Manager's Blog - Personal Property Tax
News, Politics
Wyoming City Manager's Blog - Personal Property Tax

From: http://www.ci.wyoming.mi.us

Over the coming months, you are going to hear a lot of municipal officials talk about the Personal Property Tax (PPT) paid  by the business community.  The PPT is a tax businesses pay on furnishings and equipment that is equivalent to our millage rate.  The business community sees this tax as a disincentive to invest in new furnishings and equipment, while the local government community, City’s, School’s, County’s, and any entity collecting millage, is dependent on the PPT for operations.  For the City of Wyoming, this tax accounts for approximately $3,000,000 in total revenue, and with the current changes proposed by the legislature, it proposes to reduce that amount to approximately $1,800,000.  In other words, a loss of approximately $1,200,000 in revenue across all funds. 

Legislators are once again insisting that a reduction in the PPT  will create jobs and improve the overall economic climate.  They are pointing to the recent elimination of the Michigan Business Tax, with that transfer of taxation to the retirees, as evidence that this works.  However, they also fail to note that the State remains nearly $8 billion under the Headlee limitation, which is equivalent to the highest rate of taxation per individual in Michigan.  In other words, residents of Michigan today collectively pay $8 billion dollars less in taxes than they did in 1978.  Using the theory that our legislators are utilizing to support the elimination of the PPT, this would indicate that Michigan should have never experienced the economic decline we had in recent years.  In this case, lower taxes did not equal more jobs. 

In essence, the elimination or reduction of this tax will force local governments to again seek additional funding from you, the resident. This funding would impact all areas of service, as it is directly tied to police, fire, parks, roads, leaves, sidewalk snowplowing, and other services.    Now some of you will say, “why do you always ask for more?, just live without it.”  This is also possible, but not without further reductions in service.   As mentioned in my blog last week, there is concern regarding public safety staffing and funding, these types of reductions are exactly the reason changes in staffing and funding have taken place. 

Last year alone we can identify over $3,000,000 in lost revenue from the State, because of their decision to fund other services at the State level. This is over 1.5 mills of lost revenue that residents are now making up with the 1.25 mill public safety levy.  These have not been, or are they now, one-time reductions, these reductions compound year by year. 

With this additional reduction being proposed by the legislature in the PPT, City residents will now pay nearly $5,000,000 more in taxes to the City to support the same level of service.  At the same time, the business community will see tremendous reductions in tax burdens and the State will continue to operate utilizing funding that was once dedicated to communities for local services.  However, we still have no guarantee of more jobs or more business investment. 

My issue with this blog is not to complain about these changes; my desire is to make sure you, as a resident, are aware of the issues that affect the way we deliver service.  These types of changes have significant impact to not only the City operation but, also you personally, whether through lower service levels or additional tax requests.  My preference would be to deliver more and  improved service every year however, when faced with these types of changes this is an admirable goal, but not a realistic one. One Legislator this week identified this proposed reduction as a “leap of faith” that we will all be better off with lower business taxes.  I want to make sure you are ready for this “leap of faith”.

News, Politics