2014 ballot proposals 

SMART millage, personal property tax, and more to be voted on

SMART Millage

The Suburban Mobility Authority for Regional Transportation (SMART) has managed to garner voter approval for taxes to support the tri-county bus system’s operations, but officials say an upcoming vote is of the utmost importance.

Without it, they say, the bus system could be forced into a struggle for survival.

The authority’s operating budget took a hit in recent years because of declining property values. That’s why SMART officials asked Oakland, Macomb, and Wayne counties to sign off on a ballot proposal that would ask voters if they’ll support a 1-mill tax to support the bus system’s operations. The proposal would represent a .41-mill increase from the current 0.59 millage rate levied for SMART’s operations. By contrast, Grand Rapids’ bus system levies a 3-mill tax on residents to support its system. (One mill property tax equals $1 for every $1,000 of taxable value. For an owner of a home with a market value of $100,000, a .41-mill increase would cost $21 more per year.) 

Transit advocates say an affirmative vote is necessary.

Joel Batterman, policy coordinator for Detroit-based faith group MOSES, says his organization would like to see a boost in funding that’s significant enough to restore the midday service into Detroit that was cut in 2011.

“But it’s crucial to approve the millage increase because right now SMART is running on fumes — property values have plummeted, which have already meant huge cutbacks, as well as increased bus fares.”

Batterman says the ballot proposal would cost $50 for the owner of a home with a $100,000 market value, “about the same as a tank of gas.”

“In transit, we get what we pay for,” he says of the region’s long-bemoaned public transportation infrastructure. “Right now, metro Detroit spends one-third the national average on public transit, so that’s what we get.” 

Megan Owens, executive director of Detroit-based Transportation Riders United, echoes the point, saying, “It’s important to remember that every day SMART takes tens of thousands of people to work, school, doctors, and more.”

“Many of those riders have no other way to get to their daily destinations,” she says. “Even without increased routes or service, it is essential to keep SMART rolling.” 

Since 2008, the bus system has lost almost $50 million in revenue. SMART’s general manager, John Hertel, told Metro Times previously that more than 80 percent of its fleet needs replacement.

“The federal government says that 500,000 miles is the most you should be able to get out of these buses,” he said earlier this year. “So … that’s what this money’s about, because the buses are on their last legs.” 

Hertel says SMART might go back to voters in the November general election if the ballot proposal fails in the primary. 

To Batterman, the ballot question voters will answer — whether or not to approve the SMART renewal and increase — comes with a more implicit statement: “You’re either for transit, or against it.” 

“Too many people are stranded without transportation already,” he says. “We don’t want more.”  

Wayne county-wide school tax boosts revenue, but some districts would fare better than others

Revenue for Wayne County school districts would increase under a so-called “regional enhancement” millage on the Aug. 5 ballot, but some may reap additional benefits over others.

The 2.0 millage (that’s $2 per $1,000 of taxable value), six-year tax would be collected by the Wayne RESA, the county’s intermediate school district. Supporters say it would generate an estimated $80 million per year. Under state law, the millage is the only additional tax school districts can pursue. The amount each district generates would fluctuate depending on taxable property values within its area. 

But because the monies would be disbursed on a per-pupil basis, some districts will receive more than others. The proposal has generated a rift in some wealthier districts. 

For instance, in Northville Public Schools, the 2.0 mill would generate about $5 million of revenue — but the district would only receive $2.83 million, according to district documents. So, for every $1 of tax revenue collected, Northville’s schools would receive about 56 cents. 

Conversely, Detroit Public Schools would fare better: The 2.0 millage would generate $14.7 million, The Detroit News recently reported. But the school would receive about $18.5 million, as it’s the largest district in the state, with nearly 49,000 students. 

The intermediate county district had to receive the approval of school boards representing at least 50 percent of the Wayne RESA’s roughly 213,000 students. Charter schools and the state-operated Education Achievement Authority were not included in the decision-making process. So, although some boards shot down the proposal, it still managed to land on the ballot.

The difference each district receives has generated a backlash, including a recent News editorial from one of Northville school’s trustees, Matthew Wilk. 

“This local tax doesn’t fund local schools; funds are collected based on property values and distributed based on pupil counts,” Wilk wrote. “As a result, districts that have attracted residents and businesses, increasing their tax base, will pay more; others that have often driven out development will pay less.” 

But Wayne RESA says the millage is needed because per-pupil foundation grants have plummeted in recent years. Schools could receive technology upgrades, reduced class sizes, and building repairs, the county district says.

Personal Property Tax fate in hands of voters

The way property taxes for businesses are assessed would be revamped under a statewide proposal before voters in the Aug. 5 primary election.

Proposal One seeks to phase out Michigan’s personal property tax (PPT), a move that would cost the state’s general fund anywhere from $300 million to $500 million, but intends to reimburse the forecasted losses. The PPT is assessed on business and commercial equipment and machinery, such as furniture or computers — basically anything not nailed into the ground. 

The legislature established a new independent authority that would reimburse local municipalities through a larger share of Michigan’s use tax, according to the Citizens Research Council (CRC), essentially a tax businesses pay on out-of state purchases. The move requires voter approval and would not increase taxes on residents. 

But numerous municipalities depend on the property tax to support day-to-day operations; for instance, the PPT made up 41.77 percent of Ecorse’s tax revenue, the non-partisan council says. So, to make up for the lost revenue, the state would allow certain business tax credits to expire which would be used to reimburse the losses to local governments.

The move to repeal the PPT, long-hated by the business community, began in 2012. As CRC says in its analysis of the proposal, “Advocates of a personal property tax repeal have pointed to what they see as the heavy disincentives on investment that arise from Michigan’s tax on commercial and industrial personal property. Because the tax is assessed on the taxable value of productive business assets such as business equipment and machinery, it is argued that the tax results in a decreased return on business investment, discouraging business expansions and the job creation that often comes with those expansions. 

“Some have also argued that it is unfair to tax businesses both at the point of sale (through the sales tax) when new personal property is first purchased and then again on an annual basis through the personal property tax levy.” 

If voters reject the proposal, it would quash efforts in the state Legislature, which crafted the proposed method to repeal the PPT and replace the subsequent lost revenue over a two-year period.

“[A] rejection of the ballot measure effectively repeals the entire set of reforms, essentially re-establishing the imposition of the personal property tax on businesses and canceling the need for the local reimbursement,” the CRC analysis says.

 

Click here to go back to the 2014 Wayne County executive election guide.

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