Skip to comments.Analysis: Local Governments Wrong to Call Foul On Property Tax Reform
Posted on 05/15/2012 8:53:59 PM PDT by MichCapCon
Local governments are crying poverty over a proposal that would make the state more attractive for businesses a plan to phase out the states tax on business equipment.
Theyre also raising the alarm that theyll have to raise taxes on local property owners to make up for lost revenue if the bill passes. School districts, counties, cities and townships should be applauding the states approach instead of fighting it.
Local governments complain that the revenue from the tax will not be replaced, meaning less revenue for strained their budgets. But the specific proposal actually replaces property tax revenue for local governments by expiring certain tax credit programs. It also mandates adjusted state assistance to compensate for governments that have a high proportion of their revenues from the tax on business equipment.
Further concern about lost revenue is mitigated by a phase-out of the tax instead of instant elimination.
The state estimates that businesses will only have their taxes lowered by $80 million in the first three years of the bill far less than the increases in state transfers to local governments and schools expected in this years budget.
Because of the long phase-out of the tax, the revenue changes from removing this tax will be dwarfed by macroeconomic changes. The states economy has been improving over the past year and will be expected to continue to do so.
As to the threat of local units raising overall property taxes if the bill passes, local government boards are already making good on that threat without the bill even passing. For instance, schools are asking to increase local property taxes by $540 million this year alone.
While nearly every government has made some moves to lower expenses in the past decade, most have failed to make substantial reforms to the ever-increasing costs of the compensation packages offered to government employees. Participating in 80-20 reforms, benchmarking retirement packages, and paying attention to paid leave and salary schedules are all worth exploring before raising taxes.
All told, bringing benefits in balance would save governments $5.7 billion far greater than the fiscal impact of personal property tax elimination.
According to the huffington post Michigan ranks 26th in education. They also state that America ranks 25th out of 34 countries worldwide. Three quarters of my property taxes go to public schools in my local area. I think that they can cut the failing schools budgets and fund the local unions that take 9 guys to plant a tree in my town. The tree could been planted for $100 by a local company. It disgust me when I see several hundred thousand dollars worth of equipment pull up to plant a simple tree. They can take their tax increases and stuff it. The public ruling class has enslaved the citizens long enough.
same down here in Ohio. The local school boards are waging war against struggling property owners. We have told them no resoundingly twice now so now they’re coming at us with a “special election” held in August in order to supress opposition turnout. They’re sacking the town.
I wish that the founders had placed in the constitution a prohibition on Property Taxes. That one type of tax has made every property “owner” an instant “renter” from the Government.
And without looking at my last years property tax bill I believe that well over half of it went directly to the County school system.
If the purpose of the government is the protection of it’s citizens then there is no reason to have a government union. So I say get rid of all the controlling government unions.
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