Kicking cities while they’re down

Michigan Republicans passed a budget last year that gives businesses $1.6 billion dollars in tax breaks, paid for by slashing school funding and raising taxes on over half of Michiganders. Now, they are about to hand them another half billion dollars by phasing out the personal property tax (PPT).

It’s generally agreed that the PPT is not a particularly smart tax. It forces companies to pay taxes on equipment that they purchase which has the effect of encouraging them NOT to make capital investments that can help them thrive and grow.

However, here’s the rub: getting rid of it will take nearly half a billion dollars out of city budgets, many of which are largely dependent upon this tax. If you think the problem with bankrupt cities and Emergency Managers is bad now, this will make it worse.

Have a look at this chart from the Michigan Municipal League’s Replace Don’t Erase website…