If you throw in the $1.9 billion from the SBT, we are now talking $3.6 billion dollars in tax cuts. But don't worry, Dick will figure out a plan "after the election".
Republican gubernatorial candidate Dick DeVos' assertion that he'd eliminate personal property taxes on businesses dropped a $1.7-billion bomb on the fractious election-year issue of taxes and state spending.
DeVos' remarks during Tuesday's debate with Gov. Jennifer Granholm furthered his support for a drastic overhaul of business taxes, compared to Granholm's more measured approach.
He also piqued concern among schools and local governments, which rely on personal property taxes.
Personal property taxes will generate $760 million for schools statewide and $916 million for local cities and townships this fiscal year. The taxes are based on business assets and equipment, including heavy industrial machinery, and are collected by local governments.
"Michigan cities are operating with a fiscal noose around our neck. Eliminating the personal property tax would be like kicking the chair out," said Summer Minnick, lobbyist for the Michigan Municipal League.
When Dick has control of the legislature, then he will tell you what he will do. You can trust him, can't you? Just because he stands to benefit a great deal from all these cuts doesn't mean a thing. Really.
The Republican businessman doesn't yet have a plan for how he would make up the $1.75 billion lost, campaign spokesman John Truscott said. He'd have to work that out with lawmakers, possibly as part of a larger restructuring of the state's main corporate tax.
Just figure it all out later. No need to be concerned. It's not like Republicans have a track record of giving big tax cuts to the rich and passing the bill on to you or anything.
DeVos already is on record supporting the repeal of the Single Business Tax by the end of 2007. That tax brings in $1.9 billion annually. DeVos has said he'd replace about half of the SBT revenue with a business tax but has not said what that tax would look like or what he would cut to make up for the rest.
Granholm has said the state needs to replace all of the $1.9 billion or face deep cuts to education, health care and other services.
"His proposal to replace only half of the SBT would force deep cuts in health care and education, would be kicking grandparents off of health care, would force us to ... (open) the doors of prisons," said Jenna Gent of the Granholm campaign. "Eliminating an additional corporate tax is only going to make that hole deeper."
But Dick said he was going to spend more money on public safety and education. How can he make all these cuts and keep those promises?
Cities are getting nervous about the answer to that question. A big percentage of their budget is now on the chopping block. Midland...
As examples, Minnick said the tax brings in about $6.5 million for the city of Midland, or about 18 percent of its budget. In some Wayne County communities, the tax accounts for 20 percent to 35 percent of local budgets.
and Wayne...
City of Wayne finance director Tim McCurley said his city's personal property tax brings in $14 million -- 42% of the city's general budget -- and $7 million for Wayne-Westland Community Schools.
The percentage is unusually high in Wayne because the small city has two large Ford Motor Co. plants with a large amount of taxable machinery.
"Even if you replaced 90% of it, you're still talking about cutting $400,000," McCurley said. "For us to cut that much, you're talking police, fire, public safety."
... and Hillsdale...
"The City of Hillsdale’s personal property taxes represent 54 percent of our tax roll," said Deb Sikorski, city assessor.
"Losses would look like $8,297,264 for all taxing entities (school, county, city). The loss to the city alone would be $2,359,218 in operating dollars."
Even good 'ol Brooks Patterson is taking issue with this idea.
Patterson said Wednesday he supports DeVos' effort to cut taxes, but said the personal property tax could not be eliminated.
"There are some communities where it makes up 40% to 50% of their budget," he said.
Well, Brooks, he told you he was going to "overhaul state government". Did you think he was kidding?
Everyone just settle down. There are plenty of people on Medicaid and other forms of assistance that Dick can eliminate first before he gets around to asking for more money from you. Not like those folks are going to show up in emergency rooms and raise your insurance costs. And, there is plenty of stuff we can sell off first. Just look at all that park land and water sitting there for the taking.
But don't get too comfortable. There is a big bill to be paid, and the money has to come from somewhere.
I'm sure that Dick will ask his friends to chip in. Aren't you?