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Eliminate personal property tax, make Michigan more competitive

From The Detroit News

July 28, 2014

By Maureen Krauss

I hear it in every state the Detroit Regional Chamber travels to: “Get rid of the personal property tax — then let’s talk.” That’s the reaction from potential investors across the country as they consider moving their operations and jobs to Michigan. Those same site selectors will be keenly aware of how Michigan residents vote on Proposal 1 on Aug. 5.

A “yes” vote on Proposal 1 is a game-changer. It removes the outdated tax known as the personal property tax and makes Michigan more competitive in attracting jobs and investment. With Michigan’s reinvention well underway, taking that comeback to the next level requires attracting more investment from outside the state.

Unfortunately, when businesses consider locating in Michigan, they have to face paying the PPT on equipment they use to do business, every single year, on the very same piece of equipment.

So that advanced manufacturing equipment they purchase to produce high-tech automotive parts or medical devices could cost them the same tax, year after year, for decades. That’s not exactly a welcome mat.

The PPT also impacts businesses and communities across Michigan.

Businesses here pay that cost, putting them at a tremendous disadvantage when their competitors in neighboring states don’t have to.

That’s money that could be used to expand and create jobs. At the same time, Michigan’s local communities have struggled for years with the unpredictable revenue fluctuations the PPT produces.

The positives of voting “yes” on Proposal 1 are overwhelming.

■ It eliminates the PPT and will allow businesses to create thousands of new jobs in Michigan and bring in millions of dollars in additional investment.

■ It stabilizes local communities by providing funding for 100 percent of the estimated PPT revenue lost for important local services like police, fire, schools, jails and libraries.

■ Proposal 1 is not a tax increase. It is paid for by eliminating special corporate tax breaks that the Michigan Legislature has already voted to end, and by establishing a statewide Essential Services Assessment paid only by manufacturers receiving a PPT reduction.

Currently, Proposal 1 has broad statewide support. The Detroit Regional Chamber is part of the Michigan Citizens for Strong and Safe Communities, a bipartisan coalition supporting Proposal 1, which includes tens of thousands of members representing police, fire, education, local government, small business, labor and agriculture groups.

Eliminating the personal property tax with a “yes” vote on Proposal 1 is the next step in Michigan’s comeback — and a win for the entire state. It also sends a message to those investors across the country: Michigan is open for business.

Maureen Krauss is vice president of economic development for business attraction for the Detroit Regional Chamber.