ST. JOSEPH — If the state Legislature votes to phase out the personal property tax, local governments and schools will receive replacement revenue — at least in part.

That’s what Sen. John Proos, R-St. Joseph, told Berrien County Commissioners last week. But he stopped short of promising a constitutional guarantee for replacement revenue.

Many legislators, including Proos, argue the tax slows business growth. The PPT is levied on equipment and machinery in the state.

“In Michigan, if you buy a tool, you get a tax bill. In Indiana, you get a tax credit,” said Proos, explaining that bills setting into motion the phasing out of the PPT should be introduced this month.

The Berrien County Board approved a resolution in March urging legislators and Gov. Rick Snyder to support a Constitutional amendment to guarantee replacement revenue if the PPT is phased out.

Proos said that is unlikely and the legislature is shooting for replacing 90 to 95 percent of the PPT revenue.

Berrien County Administrator Bill Wolf said if the proposed legislation goes through, the county would lose about $300,000 a year.

But the phaseout would continue over the years, meaning more revenue cuts ahead for counties and municipalities.

Commissioners expressed some disappointment the Legislature couldn’t guarantee a replacement.

“No guarantee of a replacement is a tough pill to swallow,” Commissioner Bob Wooley said.

Debating road funding

Proos also told commissioners the state’s 2012-2013 budget should be completed by early June, but an area of debate in the budgeting process is the issue of funding Michigan’s crumbling road system.
Gov. Snyder is pushing a gas tax and vehicle registration cost hike, but Proos said it is not popular among many legislators.
Proos has introduced a bill that would fund roads by guaranteeing that gas and diesel tax revenue could only be used for transportation. Of the state’s 6 percent fuel tax, 20 percent goes to the general fund. Proos’ plan calls for that 20 percent to go into the state’s trunk line fund that is used to match federal transportation grant funding.
“What we pay at the pump should go to roads. That’s the purpose,” Proos said.