MARQUETTE - Michigan Lt. Gov. Brian Calley championed a tax reform proposal that will appear on the Aug. 5 primary ballot as a win-win for Michigan businesses and local governments during a public forum in Marquette Friday afternoon.
"We're trying to create a better environment for jobs in our state and at the same time provide a more stabile revenue stream for local government," Calley said as he addressed the gathering in the Bottum University Center's Peter White Lounge at Northern MIchigan University.
The proposal would slowly phase out Michigan's industrial personal property tax currently levied on small businesses and industrial machinery, replacing that lost revenue with a redistribution of Michigan's use tax. The personal property tax system is often criticized for being complicated and sometimes causing businesses to pay taxes twice on the same item.
Because the tax restructuring proposal requires the state to change its control over a revenue stream, Michigan's constitution requires the measure to be put to a statewide vote.
Currently, the 6 percent use tax is split, with 2 percent going to the School Aid Fund and the remaining 4 percent to the state's General Fund.
If approved, Calley said the proposal would only redistribute tax dollars from the 4 percent, leaving the School Aid Fund untouched.
The new tax system would also simplify the tax assessment of personal property, which currently could be assessed by a number of different municipalities and agencies. The new system would adopt a single assessment that would be used statewide, a measure Calley said could save time and money.
Calley also stressed the measure did not create new taxes and would not affect regular citizens.
A six-member panel representing business and governmental organizations attending the forum was largely in support of the proposal.
"This is a remarkable solution to a long-standing problem," said Mike Johnston, vice president of government affairs for the Michigan Manufacturers Association.
Johnston also lauded the widespread support the proposal has among governmental and business associations alike.
Samantha Harkins, director of state affairs for the Michigan Municipal League, said the proposal works so well because it keeps revenue streams intact for local government but also helps create a good climate for business.
"They don't operate separately," Harkins said of government and business, adding a good business climate helps make a community more livable.
Calley said the most important aspect of the proposal is that it would create jobs by eliminating an out-dated tax structure and bring Michigan more in line with competitors not only regionally but globally.
Paul Harvey, director of new business development and corporate secretary for Engineered Machined Products Inc. of Escanaba, said the new tax structure would help make his business more competitive in today's global economy.
"This will help us stay in MIchigan," Harvey said.
Jackie Stark can be reached at 906-228-2500, ext. 242. Her email address is firstname.lastname@example.org.