Conversation Continues on New Personal Property Tax System

The League co-hosted a webinar this afternoon with Howard Heideman from Treasury’s Office of Revenue and Tax Analysis as a continuation of our effort to provide information and greater access to Treasury as communities move through the initial phases of implementing the state’s new personal property tax system.  More than 125 members registered for today’s presentation, which follows along with meetings held earlier this summer in Muskegon and Marquette.

See below for the full webinar and referenced documents. In addition, please visit Treasury’s Personal Property Tax Reimbursements web page for more details.

A special thank you to Howard and to Treasurer Khouri for their partnership and assistance in this outreach effort!

Personal Property Tax Implementation Webinar from Michigan Municipal League on Vimeo.

Documents referenced in webinar:

Excel:
2016 PPT Reimbursement Draft – Example City

MS Word:
Form 5429 Example With Instructions

Form 5403 Expired Tax Exemptions – Example With Instructions

 

Chris Hackbarth is the League’s director of state affairs. He can be reached at 517-908-0304and chackbarth@mml.org.

Personal Property Tax Implementation Takes Center Stage

PPT training in Marquette on Wednesday, Aug. 10, 2016.

PPT training in Marquette on Wednesday, Aug. 10, 2016.

Based upon the significant level of questions from municipalities across the state with this initial phase of implementation of the new personal property tax system, the League reached out to Treasury and we are coordinating with the Department to provide opportunities for municipalities to hear from Treasury’s personal property tax staff through a few regional “office hours” style meetings.

The first of these meetings was held in July in Muskegon with an second event held today in Marquette.  Dozens of communities in these regions with a significant industrial/manufacturing personal property tax base, were able to send management and finance staff to participate in these events and talk directly with Treasury staff to get answers to their questions as this new system is being implemented.

Treasury staff provided an overview presentation on the status of implementation of the new law (Personal Property Tax Update 2016 Reimbursement Slides JJune 28 2016), discussed the relevant timelines they are working with according to the new law, reviewed the forms that have been (and are being) developed, discussed the role of the Essential Services Assessment as part of the overall reimbursement process, provided answers to some of the most commonly asked questions (PPT.FAQs_-_LCSSR_Essential_Services_Distribution_Calculation_529232_7), and walked the meeting attendees through some various examples for calculating PPT loss and estimating reimbursement (all subject to change depending on the actual revenues available this fall that the reimbursements will be drawn from).

Acknowledging the questions the Department continues to receive on the new process, Treasury has stated that they will continue to accept Form 5448 from any community that wishes to submit their information through the end of August.

The League appreciates Treasury’s willingness to participate in these events and we will continue to work with the Department to offer additional opportunities for municipalities to meet in person and have their questions and concerns addressed.

Chris Hackbarth is the League’s director of state affairs. He can be reached at 517-908-0304and chackbarth@mml.org.

League, MAC and MTA Issue Joint Statement on Data Center Abatement Proposals

The Michigan House Tax Policy Committee today is reviewing legislative proposals regarding what’s known as the data center issue and the Michigan Municipal League along with other organizations have distributed a joint statement regarding the legislation.

The biggest concern from the League’s perspective is ensuring that local communities continue to have the ability to establish local control on both existing and future abatement requests, like we have for other economic development abatement tools. One proposal being shopped by the existing data center industry would eliminate the current language providing local involvement in future data center investments. The League and other local government groups are opposed to this effort. We feel it is appropriate to maintain local involvement in any decision on whether to abate taxes as an economic development tool.

Here is the full statement on this issue by the League, the Michigan Association of Counties (MAC) and the Michigan Townships Association (MTA):

As the representatives of local government in Michigan, our organizations ― which are responsible for delivering the daily services Michigan residents count on ― wish to clarify our position on the various legislative proposals being discussed for the data center industry, especially those surrounding exemptions for personal property.

Local governments welcome economic development/job creation in this state and our goal is to continue to partner with the state.

If the Legislature and administration believe exemptions for existing firms and their existing equipment in a broad-based personal property exemption framework are necessary, we recommend the exemption for current equipment follow the recently adopted system for small taxpayers and manufacturers, allowing the local units to be fully reimbursed for the reductions to their tax base.

In our view, though, a blanket, state-ordered exemption would be counterproductive, given the existing economic development tools available to reduce/abate personal property for business, including data centers.

Absent a reimbursement mechanism, language similar to what the House and Senate are considering, which allows for a local unit to approve/deny a request for an abatement of data center personal property, is vital. Allowing local governments to be involved in this way ensures they are able to evaluate the local budget costs against the benefits of proposed exemptions, just as they do with all other economic development decisions.

Adoption of one of these approaches will protect existing local government budgets and preserve the role of the local unit in these critical local economic development decisions.
Thank you for your consideration. We welcome the opportunity to discuss further should you have any questions.

– Chris Hackbarth, Director of State Affairs for the Michigan Municipal League
– Judy Allen, Director of Government Relations for the Michigan Townships Association
– Steve Currie, Deputy Director for the Michigan Association of Counties

Posted by Matt Bach on behalf of Chris Hackbarth. For more information contact Hackbarth at chackbarth@mml.org and 517-908-0304.

Treasury Distributing First Major PPT Reimbursements

Most Michigan Municipal League member cities have received Personal Property Tax (PPT) distribution checks in the mail in the past week. These reimbursement checks are the first amounts cities are receiving for operating mills under the PPT reform voters approved in a statewide referendum in August of 2014 and are being distributed by the Local Community Stabilization Authority (LCSA), which is a new creation under the Act.

As one of the first implementation phases under the new law, cities with a positive small taxpayer exemption loss are eligible to be reimbursed for their 2014 and 2015 personal property tax loss from millage not used to pay debt.  On October 20, 2015, Treasury certified a partial distribution of $15,736,006 to 214 cities. This distribution reflects 100 percent reimbursement of 2014 and 2015 operating millage less amounts reimbursed to TIF plans for city millage and amounts previously reimbursed to cities under the Act for debt loss.

In addition to this 100% reimbursement, the LCSA also has an additional $3,463,994 available to distribute to these eligible cities. Once all other data related to each city’s 2014 and 2015 debt loss is compiled, these additional dollars will be certified by Treasury to the LCSA for distribution. This additional distribution to cities stems from the design of the proration formula contained in the new law and represents payment in excess of 100 percent reimbursement. This extra payment will be finalized and distributed by early December of this year.

Chris Hackbarth is the League’s director of state affairs. He can be reached at 517-908-0304and chackbarth@mml.org.

 

 

Treasury Provides Updated PPT Reimbursement Form

This afternoon Treasury provided the updated Form 5192, for claiming small taxpayer exemption personal property loss reimbursement for a millage levied in July 2015 used to pay debt.  Reimbursement requests are due to Treasury by August 14, 2015.

The form is available at: http://www.michigan.gov/documents/taxes/5192__07-15_fillable_July_2015_494424_7.pdf

with a link to the form available on Treasury’s main Personal Property Tax page: http://www.michigan.gov/taxes/0,4676,7-238-43535_53197-316719–,00.html

Please contact Treasury’s Office of Revenue and Tax Analysis at 517-373-2697 with any questions.

Chris Hackbarth is the League’s director of state affairs. He can be reached at 517-908-0304and chackbarth@mml.org.

Voters Overwhelmingly Approve Proposal 1; HUGE Victory for Michigan Communities!

The League was part of the coalition for Michigan Strong & Safe Communities, which actively supported Proposal 1.

The League was part of the coalition for Michigan Citizens for Strong & Safe Communities, which actively supported Proposal 1.

A huge thank you goes out to all the Michigan Municipal League member communities and supporters backing Proposal 1 on Tuesday’s primary ballot. The measure, which completes the plan to phase out personal property taxes that businesses pay, passed with 69 percent of the voters in support, according to preliminary results reported by mlive.com and the Detroit News with 99 percent of the precincts reporting.

Proposal 1 represented a considerable amount of negotiations and work by League staff and our members. We thank our many members who have publicly supported this proposal by passing resolutions encouraging a YES vote, doing media interviews, participating in news events and writing letters to their local newspapers. Read this article by the League’s Samantha Harkins about this history of this issue and why the League supported this measure.

“What this really means for us is stability,” Harkins, the League’s director of state affairs, told reporter Paul Egan of the Detroit Free Press for an article about Proposal 1’s passage.

Here’s an excerpt from a Michigan Public Radio piece by Jake Neher about voters approving Proposal 1. This report also includes comments by Harkins:

Communities depend on revenue from the tax to pay for things like police, fire, and roads. (Governor) Snyder says the proposal ensures they will be fully compensated for any lost revenue.

Local government groups say they agree. “I think, from the local government level, it really provides certainty for us in a way that the failure of Proposal 1 certainly would not have created that certainty,” said (Harkins). “And we’ve had a lot of uncertainty in the last decade.”

Also in the “good news for communities” category, MIRS News is reporting that 80 percent of the “new money asks” in local ballot proposals were approved by voters. That 80 percent passage rate is consistent with the results from the past several elections. Here’s a chart by MIRS that shows the local ballot proposal results by community.

Matt Bach is director of media relations for the Michigan Municipal League. He can be reached at mbach@mml.org and (734) 669-6317.

Please VOTE YES on Proposal 1 in the August 5, 2014 Primary Election

Please vote in Tuesday’s Aug. 5, 2014, primary election. On your ballot you may have a lot of things or just a few things to consider, but one of the most important issues for Michigan’s communities is Proposal 1. The League is in support of Proposal 1 and encourages our members to vote YES on Proposal 1.

This proposal represents a considerable amount of negotiations and work by League staff and our members. We thank our many members who have publicly supported this proposal by passing resolutions encouraging a YES vote, doing media interviews, participating in news events and writing letters to their local newspapers. Read this article by the League’s Samantha Harkins about this history of this issue and why the League is in support of Proposal 1.

So what happens if Proposal 1 fails?

A new community impact calculator by the Strong and Safe Communities YESon1 shows the potential losses communities could sustain if Proposal 1 is defeated and the Legislature decides to eliminate the personal property tax without any funding replacement for local municipalities. All you need to do is go to the calculator and follow the step by step instructions to see the impact on your community. For example, in Flint, if Proposal 1 fails and the PPT is eliminated without replacement that is the equivalent funding of 54 police officers, or 71 firefighters, or 464,746 meals on wheels for seniors.

Here are some details from the Strong and Safe Communities coalition about this:

A “NO” Vote on Proposal 1 and failure to pass Proposal 1 would hurt Michigan communities and Michigan small businesses. It would mean:

  • Michigan communities lose by having to go back to depending on an unreliable revenue stream for essential services like fire, police, ambulances, jails, and schools – plus other valuable local community services, including senior centers, parks and libraries.
  • Michigan businesses lose by having to go back to paying the antiquated unfair double tax that keeps them from investing and creating jobs.
  • Many community leaders across the state fear that if Proposal 1 fails in August, the legislature could still eliminate the PPT, but not reimburse local communities for that lost revenue.

Matt Bach is director of media relations for the Michigan Municipal League. He can be reached at mbach@mml.org.

 

Michigan Communities Urge Residents to Vote YES on Proposal 1; Pass Resolutions in Support

Proposal 1 Press Conference Oakland County June 2014 Brooks Patterson Barry Brickner (16)-edited-smallMore than a dozen Michigan cities and villages have approved resolutions urging residents to vote YES on Proposal 1 Aug. 5. The Michigan Municipal League is part of the vote YES on Proposal 1 Michigan Citizens for Strong and Safe Communities coalition and is encouraging our member communities to adopt a resolution. The League is then sharing the resolutions with the local media and public and those press releases can be viewed here.

We want to thank these communities for passing resolutions in support of Proposal 1: Cedar Springs, Frankenmuth, Fremont, Grayling, Hartford, Madison Heights, Mattawan, Middleville, Mt. Pleasant, Northville, Norton Shores, Pleasant Ridge, Three Oaks, Walker and Yale. If your community is not on this list but passed a resolution please email me at mbach@mml.org. We also want to thank our many members who have participated in local press conferences and editorial board meetings in support of Proposal 1.

The passage of Proposal 1 on the Aug. 5 statewide primary ballot is the final step toward completing comprehensive reform to the state’s personal property tax (PPT) – an effort the Michigan Municipal League has been heavily involved in for the last few years.

Farmington Hills Mayor Barry Brickner urges residents to vote YES on Proposal 1 during a recent Oakland County news conference.

Farmington Hills Mayor Barry Brickner urges residents to vote YES on Proposal 1 during a recent Oakland County news conference.

The PPT is a tax on business equipment that communities have relied on for years to provide essential services, such as police and fire protection, schools, libraries, ambulances, jails and roads. The League has maintained that if this tax is eliminated there must be full replacement of the revenue for local governments. Proposal 1 provides the revenue replacement and it does so without raising taxes.

Additional information:

Go here for a sample resolution. It’s important to note that it is legal for local government bodies to approve resolutions in support of ballot issues as long as no public tax dollars are expended. So resolutions are OK.

Go here to sign up to support the coalition and receive regular campaign updates.

– Send a letter to your local newspaper in support of Proposal 1. View sample letters here.

Go here to view additional photos from the recent vote YES on Proposal 1 news conference in Oakland County.

Matt Bach is director of media relations for the Michigan Municipal League. He can be reached at (734) 669-6317 and mbach@mml.org.

A list of communities that have approved resolutions urging residents to vote YES on Proposal 1.

A list of communities that have approved resolutions urging residents to vote YES on Proposal 1.