LANSING – Some local governments would not receive full reimbursement from the revenues lost as a result of phasing out portions of the personal property tax under legislation pending in the Michigan House, but the chair of the House Tax Policy Committee said Monday he anticipates fixing the problem without difficulty.

When the bills flew out of the Senate in a matter of days after their introduction, the message from supporters was that the legislation would ensure 100 percent revenue replacement to all communities with one exception in how a part of the phase-out affects townships.

But David Zin of the Senate Fiscal Agency said the SFA is preparing a revised analysis of SB 821 , SB 822 , SB 823 , SB 824 , SB 825 , SB 826 , SB 827 , SB 828 , SB 829 and SB 830 that shows under the current language, starting in 2018, some communities would receive less revenue than what they lost from the PPT changes (and some would receive more).

The issue is that part of the reimbursement starting in 2018 is based on a communities share of total real property tax value instead personal property taxable value. That will create some situations – described as relatively small in the totality of Michigan’s 1,800 some cities, villages, townships and counties – where some communities would not get all their revenue back and some would get more than what they lost.

“Who’s a winner or loser is going to depend on their relative shares of their personal property to their real property,” Zin said. “The ones that have a lot of personal property relative to their real property, those will be the ones that are more likely to lose.”

The issue was not raising alarms among local government groups.

“Honestly, I think it was an oversight, and they’re going to fix it,” said Deena Bosworth of the Michigan Association of Counties. “I’m not concerned.”

Bosworth said Lt. Governor Brian Calley’s office has assured her the issue can be fixed. Apparently the language was a holdover from the 2012 plan to reimburse local governments for 80 percent of revenues lost, she said.

Rep. Jeff Farrington (R-Utica), chair of the House Tax Policy Committee, which has hearings scheduled for Tuesday and Wednesday on the legislation, said the language would be corrected.

“From what I’ve heard, it’s more the exception than the rule,” he said of the number of communities affected. “But either way it’s something we’re looking to fix.”

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