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Supt. John Jarpe: Personal property tax needs a replacement

Published 11:45pm Wednesday, October 5, 2011

The Michigan Senate is considering Senate Bill 34.  This legislation would eliminate the Personal Property Tax, or PPT.  I can understand the desire to make our state and community more inviting to businesses.  I totally get it that a business would want to locate across the border in Indiana if the taxes in Michigan are too high.  However, this tax cut needs replacement revenue because of the shifted expenses that will result if the bill becomes law.
What is the PPT?  This is a tax on commercial equipment and furniture, industrial equipment and machines, and other business types of fixtures.  The money from the PPT is collected through tax millages from the state, local schools, and intermediate districts like Berrien RESA.  So, if there is no longer a PPT, and it doesn’t get replaced by some other revenue, school funds that have already been reduced, will be reduced some more.
In past years, the state School Aid Fund has made up the difference if local taxes could not provide enough funding.  However, increases in costs to the School Aid budget might not be covered.  As we have pointed out before, the Governor and legislature were quite willing to use the School Aid Fund to cover public schools and community colleges last spring.  This resulted in lower amounts for local districts.
In addition to operating millages, many school districts, like Brandywine, have debt millages that were approved by voters to do construction projects to keep our schools up-to-date.  We are most thankful to our community for that support.  The law states that those millages are written so that the pay-off rates must automatically increase if necessary, in order to make payments.  Of course, they can also be reduced, during strong economic times.   But, if a main source of tax revenue, like the PPT, is taken away and not replaced, the tax costs can get passed on to the other taxpayers.  In this case, that becomes the homeowner.
The estimated impact on the Brandywine Community Schools for the elimination of the PPT is about $65,000.  Taxes are not helpful to businesses, but cutting revenue to schools and legally forcing schools to pass along taxes to homeowners is not helpful, either.  If you have concerns, contact Senator John Proos or Representative Sharon Tyler.  Urge them to consider replacement revenues if they cut the PPT.

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  • mikea0815

    Dr. Jarpe makes the claim that PPT is a “main source of tax revenue” and then tells us that it amounts to $65,000 of a budget of between 11 to 12 million dollars. That seems hardly a “main source.” The personal property tax has for decades acted more or less as a somewhat confiscatory tax on local businesses. Why, in Brandywine’s case would it be necessary to replace $65,000? One would have to believe that there are items in their budget that would never be missed to account for that loss. Perhaps, in the case of other districts, it might be a different case. Is it REALLY necessary to replace the PPT? Hardly. As a people, we are already overtaxed. I realize that there are readers who will make the case that “reductions” have been made, and “its for the kids.” Really? Educational hiring has increased tenfold in the past thirty years nationally with no appreciable increase in student achievement. The same with educational spending. Further, the amount “promised” to Michigan schools is $6,700 per student. All schools will receive more than that this year. For those of us in the private sector-who incidentally pay those taxes-it is difficult to justify an increase in our tax burden currently. Many of us have had to suffer pay cuts, lay-offs, and in too many cases, job losses. Perhaps Dr. Jarpe would be better served to look at a $65,000 cost reduction, rather than asking us to find a way to pay more.

  • http://www.facebook.com/#!/kbtonkin Kevin Tonkin

    I would also add that property taxes is NOT a fair way to support our schools either especially when one can lose their property for the lack of tax payment. I believe it would be fairer to do a combination income tax and business tax so those who benefit from it the most can pay and those who can afford it most. A per child cost should be included into the formula somehow.

  • Username75

    What has made America, the great Economic powerhouse in the Past?
    We Killed Indians, and Stole their Land.
    We brought in Slaves to do Our Work for us.
    Then We thought that was Wrong, and made them Second class
    citizens.
    That created a cheap labor force, that had no economic Power,
    Civil rights, legal protections.
    If they got uppity, We just called the Klan to beat and Lynch them.
    The poor whites could blame them for all their economic inequities.
    That worked for awhile, till the Whites started to get Uppity, and started
    those Damn unions, which We had no problems, as long as We had
    good Republican Presidents willing to let the Armies to come in,
    and Kill them Off like we did the Indians.
    Then We got Weak Presidents like Teddy Roosevelt, who sided with
    the poor Whites over Our Job Creators.
    And the Satanic Unions destroyed it all creating not only better
    Conditions for the Poor, but creating a Middle class.
    thus almost destroying the Power of our true Americans, the
    monopolies, and Industrialists.
    It started to weaken the power of the Bankers, and then they had the Gall
    to Regulate Wall Street, and the Banks.
    Giving power not to the Job creators, but the People.
    Yes thats true to the Unwashed Masses.
    Today the Indians have their Casinos, while not many of them are left,
    and they don’t own much Property.
    The former slaves now have Civil Rights, Legal protections, and
    actually full citizenship, although they are trying to limit these.
    so How do We return to Greatness?
    Go get more Slaves, of Course, we could Hire Cruise ships, to go
    all over the World picking up slaves, bidding them off to Our job
    creators.
    We must first get rid of, Unemployment Insurance, Work mans compensation,
    and the Minimum Wage laws.
    In fact it would be good for the Job Creators, if We also got rid of Social
    Security, Disability Insurance, Medicare, and Medicaid.
    And start rebuilding Americas Greatness, not some pinko Commie state.

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