The state Senate voted today to phase out a tax on most industrial and business property in Michigan.
The tax is a big revenue generator for school districts and local governments. But Senate Republicans amended their original plan so it now provides some assurances it won’t force big cuts to education and other services.
State Senate Majority Richardville says if money from the state falls below a certain level, communities could return to taxing industrial property.
“It’s kind of a poison pill, as we call it in legislative jargon, where, if we don’t keep our promises than the whole program disappears, so it forces the state government to say we will keep you at the level we say it will,” he says.
Richardville acknowledges there’s no way to guarantee schools and local governments won’t see some reductions. He says the tax on industrial equipment, in particular, is so unique it drives investment elsewhere.
“Other states in the Midwest and, in fact, around the country don’t do that and so, in order to be competitive, we have to eliminate this,” he says.
Republicans rejected efforts by Democrats like state Senator Steve Bieda to link the rollback to job creation targets.
“If these tax breaks are meant to create jobs, then we should be making sure that jobs are created,” Bieda says.
Democrats say the rollback is part of a pattern in Lansing of shifting the tax burden from businesses to individuals.
The package now goes to the state House.