What Proposed Reforms to the Personal Property Tax Mean for House District 54

Friday, March 9, 2018

The governor recently announced as part of his fiscal year 2019 budget proposal a restructuring of how local revenue losses due to Personal Property Tax (PPT) reform are reimbursed. This reform changes the tier-3 personal property tax reimbursements, which are provided after all property tax recipients have been fully reimbursed, from a system based on estimated revenue loss to a system based on population. When compared to tax year 2017 the governor’s proposal for the PPT reimbursement allocates $15 million to fire protection grants, which is currently not part of the formula, meanwhile cities and counties as a whole are due for a small increase in PPT reimbursement ($1.2 and $0.6 million respectively). The proposal also decreases funding for townships, libraries, and community colleges as a whole (cuts of $0.4 million, $7.3 million and $2.9 million, respectively). These numbers are indicative of statewide effects from the PPT reform and are not indicative of what our district is to expect if this reform passes. Washtenaw Community College is expected to get $458,375 more in PPT reimbursements. The city of Ypsilanti is expected to get $275,696 more in PPT reimbursements, and the townships of Superior and Ypsilanti are expected to get $19,422 and $66,495 more in PPT reimbursements, respectively. Also, since libraries are considered a tier-2 municipality they are guaranteed 100 percent PPT reimbursement before tier-3 municipalities are given PPT reimbursements; thus, our community libraries would still be eligible for full reimbursement of their PPT losses under the Governor’s proposal as well.

Although I do not agree with the drastic decrease in funding for community libraries, the governor’s proposal for the new Personal Property Tax reimbursements is tremendously helpful for our community. While there is still a long way to go in this process, the governor’s proposal is a good start, and my House Democratic colleagues and I will fight at every step of the process to ensure the budget that passes is beneficial for our working families. I look forward to working with my colleagues to improve what I view as the weaker elements of this plan. If you have any questions about the governor’s proposal you can contact my office at (517)-373-1771.