Tom's Corner: Prop 1 and voter confusion

Updated: Thursday, July 31, 2014
Tom's Corner: Prop 1 and voter confusion story image

In five days Michigan will vote on a proposal that a remarkable cross-section of supporters say the state needs to survive in this increasingly competitive world.

 

It's called Proposal 1, and would repeal Michigan’s Personal Property Tax, an annual tax on business equipment that is widely viewed as a disincentive for businesses thinking about investing in new equipment.

 

Prop 1 is being sold as a win-win deal. It gets support from democrats and republicans alike. More than $8-million has been spent to support it and not a single dollar spent to defeat it.

 

But, in tonight’s Tom’s Corner, Tom Van Howe says it could all come down to two words: Voter confusion.

 

I don’t know who writes these things, but here’s what the ballot says: “Approval or disapproval of amendatory act to reduce state use tax and replace with a local community stabilization share to modernize the tax system to help small businesses grow and create jobs.”

 

Then it goes on for another 120 words to create a world of confusion that makes it clear that the average voter is going to have to rely on blind faith to say yes to this. As a result, that may not happen.

 

And that would be a shame. A shame because of two things. First, this whole thing could have been handled in Lansing by the people we elect and pay to make such decisions. And second, all the other Great Lakes states have long since dropped the personal property tax, the PPT, as an encouragement for their business communities to invest in new equipment and create new jobs.

 

It's easy to understand why businesses get frustrated with the PPT. They go out, buy new stuff, pay the normal sales tax and then pay an annual property tax for the foreseeable future.

 

Its not an incentive for investment, and not exactly a lure to other businesses thinking about moving to Michigan.

 

Here’s where reasonable suspicion might settle in. When you stop collecting a tax, it leaves a hole in the budget.

 

According to an article today in Bridge Magazine, the PPT generated $884-million a couple of years ago. That's money communities have grown to rely on.

 

But, if you dump the tax, how do you fill the hole?

 

The powers that be assure us it will be filled by reapportioning the money the state takes in from its “use” tax. Fine. But where does the money come from to replace the money we’re borrowing from Peter to pay Paul?

 

Not being an economist or an accountant, I tend to rely on headwinds and intuition to tell me how to vote on something like this. With so many businesses and governmental bodies saying “yes,” I start leaning that way too.

 

But then there’s this comment from state Representative Rose Mary Robinson, a democrat from the Detroit area. In an article from WDET at Wayne State University, she says all the talk about different ways to make up lost revenue is hollow. She says Prop 1 will wind up hurting the little guy who rarely has much of a voice in such matters.

 

"People might not agree with me,” Robinson says, “I just want them to look at the issue. And if they do agree with me, vote no. But if they feel it really is in the interest of small business to do it this way and forget those who are going to suffer when there’s a shortfall in the general fund, then that’s their choice.”

 

Hmmm.

 

Then there’s the promise of all those new jobs. Thousands of them. Tim Skubick, the political writer from the Grand Rapids Press and M-Live, wrote a few days ago, “There is no organized opposition to Prop 1 unless you call voter confusion an enemy to contend with.”

 

And he wondered if you can get voters to sit still long enough to digest and understand all this. “The old adage may apply here,” he wrote. “when in doubt the voters vote no.”

 

We’ll find out in five days when 10 to 15 percent of registered voters will turn out to make this decision for all the rest.

 

And if they do, in fact, say “no,” the whole thing will, at some point in the not-so-distant future, fall back into the laps of our elected government, where it probably should have been handled in the first place.

 

In this corner, I’m Tom Van Howe.

 

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