MPPS

Local leaders support eliminating Michigan’s Personal Property Tax if funds are replaced, but distrust state follow-through

November 2012

Click here to learn more about Michigan local leaders recent views on the state's system of funding local governments.

2012: As state lawmakers consider reform and partial elimination of Michigan’s Personal Property Tax (PPT), this report presents local government leaders’ assessments of the PPT and its impact on their jurisdictions, as well as their views on potential reforms. The findings are based on statewide surveys of local government leaders in the Spring 2012 wave of the Michigan Public Policy Survey (MPPS).

Key findings

  • Among all jurisdictions that report receiving Personal Property Tax (PPT) revenue, 51% report that the funds are important for their budgets. This increases to 83% among the state’s largest jurisdictions, as well as 84% of its counties and 85% of its cities.
  • Local officials believe the PPT is difficult to administer (42% agree vs. 24% disagree), yet more think the PPT revenues are worth the costs of administration (46% vs. 30%).
  • Nearly three-quarters (74%) of affected local leaders would support elimination of the PPT if the state were to replace the revenues in full. However, this support drops sharply if the state were to provide less than full replacement funding. Even if the state were to replace most of the revenue, just 44% would support elimination of the PPT under those circumstances.
  • Distrust of the state may be a factor in concerns about PPT reform. In the absence of a constitutional guarantee, more than two-thirds (67%) of local leaders would not trust the state to follow through on commitments it might make to replace lost PPT revenues, while just 13% would trust the state government.
    • Levels of distrust are highest in the state’s largest juris- dictions, where 86% of leaders would not trust the state to follow through on commitments it might make. By comparison, 63% of leaders in the smallest jurisdictions also would not trust the state to follow through.
  • If the PPT is eliminated in whole or in part, over two-thirds (68%) of local leaders would want replacement revenue to be collected and retained at the local level, while just 12% would prefer it to be collected by the state and redistributed to local governments.