Saline Mayor Gretchen Driskell has put her stamp on a multitude of
development and transportation projects during her seven terms in
office. This week she writes on why loitering is welcome in downtown Saline, the personal property tax, and mass transit coming to lower Michigan.
We Built It So They Would Come
Our city has historically been recognized as a pro-business community. We have purchased over 383 acres of farmland over the past 19 years and installed roads and water/sewer infrastructure to provide certified industrial parks with development-ready parcels. When a company looks at our community to invest and grow, we bring all the required players to the table so there will be a timely, successful outcome for us all.
It is with particular dread that we are following a proposal in Lansing to eliminate the personal property tax. In our community it would have a significant negative impact. It would eliminate 20% of our city operating budget and since we would be required to continue the bond payments on the business park infrastructure (almost 2 mills annually, some through 2024), our citywide services, infrastructure, and quality of life would be decimated.
Over the past decade, we have laid off over 10% of our workforce, not replaced other open positions, and stopped capital projects. We have outsourced, collaborated, and consolidated. We have gone to a defined contribution pension program and adjusted our health insurance to be competitive with the private sector.
We have been doing this because of what I call the perfect storm. The combination of Proposal A, which capped our ability to raise our taxes when the market was strong, cuts to statutory revenue sharing, which was designed to alleviate the negative impact of Proposal A, and the significant decrease in real property values has decimated budgets across our great state for the past ten years.
In Saline, a majority of the businesses in our parks are growing. They are expanding and investing in new equipment and employees. They are not moving away to another state because there is a personal property tax here. As a matter of fact, 43 states have personal property tax. Indiana and Ohio do not. To be clear, there is some talk of replacement of this revenue. However, there is no reliable revenue source identified and the revenue replacement would be appropriated at the state level. Our experience has been that this method of revenue generation ultimately is allocated to state operations and disappears over time and we are left with a tax shift to local government (our citizens). Our revenues have shrunk 7% due to this situation.
Personal property tax elimination will cause a loss of almost $1 million in revenue to the Saline school bond fund, which would cause the bond payments to be extended another 3 to 4 years. School operating revenue (foundation funds from the state) would decrease over $2 million. Would the state replace this? There would be a 9% decrease in our library operating budget. Elimination of this revenue source will take away 5% of the county budget, and 3% of the community college budget. Additionally, it would negatively impact downtown development authorities, the AATA, and the WISD. Countywide, across all organizations that receive personal property tax revenue, the total loss is estimated to be $43 million.
The legislature cut business taxes (which I fully supported) by $1.6 billion this spring. Now they are talking about another $1.2 billion cut, and this burden again would then be carried by locals. Let me be clear, I am not opposed to this cut if there is a fully funded guaranteed replacement. We have always worked with business to provide the best environment for their success; we know that this is imperative for a healthy community.
I urge you to be informed about how this proposal would affect your community. In Saline, we are having a town hall meeting on this subject on November 14th at 7pm at Liberty School. If this revenue is not replaced, communities across our state will be unable to provide the quality of life, infrastructure, and education system that talent and smart business wants and needs to locate and invest here.