Michigan Gov. Rick Snyder has had astonishing success at getting the legislature to remake state government in little more than a year. Now he's turning to his next priority: essentially repealing the state's personal property tax. This may be a tax cut too far, at least as the governor's proposal is structured.
The name of the tax is misleading: It has nothing to do with the average family's possessions, but with business property. The governor believes that the way to attract desperately needed jobs to the state is to slash business taxes.
Last year, Michigan's corporate income tax was cut by more than two-thirds. Repealing the personal property tax is seen as the second phase. This time, the cure may be worse than the disease.
Most of the revenue from this tax goes to local governments, most of which are in bad shape financially. Cities and townships statewide have been hit hard by a combination of a sharp drop in property values, lingering effects of the recession, and massive cuts in revenue sharing. Governments have slashed services to the bone; a few face insolvency.
The tax package before the Legislature would replace only about four-fifths of the revenue municipalities would lose. That's unacceptable.
Making it easier for businesses to buy equipment and make capital investments is sensible. But the communities they serve must be made whole.
Governor Snyder is right that 21st century businesses need a better state tax structure. But expanding businesses also care about infrastructure and quality-of-life issues, including decent roads, trash pickup, and other vital public services.
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