LANSING – Leading business groups have begun pouring money into a committee that will aid efforts to pass the proposal on the upcoming August ballot earmarking a portion of the state’s use tax revenues to local governments as a partial replacement for revenues they will lose as part of the related reduction in the personal property tax.

Passage of the proposal is mandatory for the changes to the personal property tax to remain in effect. Under a series of laws enacted in 2012, businesses would see the tax on industrial personal property phased out between 2016 and 2022, with local governments receiving replacement of 80 percent of the revenue they lose, provided the lost revenue equals at least 2.3 percent of a local government’s total property tax revenues.

The tax on commercial and utility personal property would remain, although starting this year businesses with less than $40,000 in total commercial or industrial personal property in any one jurisdiction no longer have to pay personal property tax to that jurisdiction.

To pay for these changes, voters at the August 5 primary will have to approve earmarking between one-sixth and one-quarter of use tax revenues to a new authority that would allocate them to eligible local governments.

There has been little talk about the pending ballot proposal, but also a sense of some unease among supporters. It is a complicated proposal, and the worry is that if any kind of an organized opposition emerges, it could be in trouble.

Supporters formed the ballot question committee Michigan Citizens for Safe and Secure Communities last year and now are beginning to put money into it. The Michigan Manufacturers Association, the major supporter of the PPT changes, has not surprisingly led the way with $351,698 in contributions through December 31.

Consumers Energy and the Michigan Chamber of Commerce also have contributed so far.

Kelly Rossman-McKinney, spokesperson for the effort, said the campaign committee is in its early stages and at this point no decision has been made on how active a campaign the committee will wage.

Supporters are not expecting much organized opposition, Ms. Rossman-McKinney said.

“But there are no guarantees,” she said. “The bottom line is you want to be ready.”

Local government groups took a neutral position on the legislation, but as Gongwer News Service has previously reported, they have been negotiating with the administration of Governor Rick Snyder to ensure 100 percent replacement of lost revenue, not 80 percent.

As written, the law only allows local governments to impose a special assessment enabling them to replace 100 percent of funding for public safety services.

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