Before breaking for the holidays, elected leaders in Lansing passed a series of bills intended to help businesses recover from the economic effects from COVID-19. It’s referred to as the Make it in Michigan plan and the main focus of the bills is to attract new business development to the state. So as to not to leave out existing businesses, one of the tools also given the green light by legislators was a significant personal property tax exemption that raises the exemption threshold from $80,000 to $180,000. While helpful to some businesses, the loss of some tax dollars will undoubtedly impact local governments—counties, townships, cities and villages. This group felt the brunt of cuts made during the Great Recession and felt, not so long ago, that they had finally climbed out of that financial hole. As local government agencies, they are the ones tasked with addressing road and utility needs, fielding well-equipped first responder teams and expanding recreational offerings—the important services that impact local residents’ daily lives.
Fortunately, lawmakers did move to allocate a $75 million reimbursement in the first year of the exemption starting in 2023 but there are no provisions beyond that.
Groups that represent municipalities, like the Michigan Association of Counties, Michigan Municipal League and Michigan Townships Association, have pledged to push lawmakers to permanently replace the funds so that local governments can have reliable funding for local services.
While Lansing’s efforts to assist existing businesses and attract new ones is laudable, their plan is severely lacking in forethought if investments in communities are eventually cut due to their inaction.