8/4/14 - While there are a variety of state legislative and local millage requests on Tuesdayâs primary ballot, one issue every voter will have an opportunity to decide is Proposal 1. The proposal, which would make permanent a gradual $500 million cut in taxes on business machinery and equipment, is supported by a wide range of groups from the Howell and Brighton chambers of commerce to the Michigan Municipal League. Manufacturers, automakers and others have also spent more than $7 million promoting Proposal 1. But for many voters, thereâs still confusion as to exactly what the referendum would do and who it would benefit. Susan Demas is the editor and publisher of Inside Michigan Politics and was a guest Sunday on WHMIâs Viewpoint. She says much of the confusion stems from the language used in the ballot proposal, which was crafted directly by the legislature and not vetted through the normal process. Prop 1 asks voters to endorse a complicated funding mechanism designed to ensure local governments and schools are fully reimbursed as taxes are slashed on businesses' machines and furniture. If the measure is defeated, the tax cuts will be halted. But Demas says the concern is that the lame-duck legislature would then enact a similar cut that wouldnât contain any mechanism to replace municipalities lost revenue. Critics of Proposal 1 say it unfairly makes vulnerable the funding that many municipalities need to fund services like police and fire. Supporters say the tax it eliminates is an impediment to business growth and that the revenue it generated for communities will be replaced through a combination of letting various tax breaks expire and shifting revenue from other portions of the budget. You can hear the full interview with Demas through the link below. (JK)
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