Michigan Votes Forum

Introduced in the House on February 18, 2003, to exempt a business from paying personal property tax (property tax on capital equipment) if all its business related property, including that of affiliates elsewhere in the state, is valued less than $7,500 as measured by its state equalized value, which is approximately half of the market value. The state would be required to reimburse local governments and the school aid fund for any revenue they do not collect as a result of this exemption. The so-called “personal property tax” is assessed on the tools and capital equipment used by a business, and is levied in the same manner as regular real estate property taxes

The vote was 59 in favor, 46 opposed and 4 not voting

(House Roll Call 342 at House Journal 42)

Click here to view bill details.

Rep. Meisner, having reserved the right to explain his protest against the passage of the bill, made the following statement: "Mr. Speaker and members of the House: I voted against HB 4234 because I think it is irresponsible to pile on tax credits at a time when our state budget is in structural imbalance. Irresponsible tax breaks of the previous administration has contributed to the mess we are in now. Foregone tax revenue is not monopoly funny money. It's real money that is needed to provide funding for core state responsibilities, including education, revenue sharing for public safety and infrastructure repair and expansion."

Rep. Jamnick, having reserved the right to explain her protest against the passage of the bill, made the following statement: "Mr. Speaker and members of the House: I voted against HB 4234. Having been a local treasurer before coming to Lansing, collecting the smaller personal property is difficult and sometimes impossible. Many of these businesses start on shoestring and have a difficult time establishing themselves. A more appropriate taxable value would have been $2500. The loss to our governmental entities would have been more manageable in these difficult financial times in our State."

Reps. Hopgood and Dennis, having reserved the right to explain their protest against the passage of the bill, made the following statement: "Mr. Speaker and members of the House: I voted no on House Bill 4234 because the bill would cause job losses across the state as government is forced to lay off more workers. As introduced, the Department of Treasury estimated HB 4234 could cost up to $125 million: $56 million from the School Aid Fund, and the rest from local governments. The cost of the current version is considerably lower, but still much more than the state, counties, and cities can afford right now. Even holding local governments harmless from the cost of HB 4234 simply shifts the burden to the state, which is already facing a billion dollar deficit. Although supporters would argue that the bill will create at least as much job growth in the private sector, the Department of Treasury pointed out that a $7,500 exemption will mean an average tax savings of $390 - hardly enough to hire additional staff, or truly spur long-term economic growth. Furthermore, this version is probably unconstitutional, because the state cannot create two different classes of personal property differentiated only by their value. Why should a business with $7500 worth of personal property pay no tax while a business with $8000 worth of property must pay tax on the entire amount? For all these reasons, I voted no on House Bill 4234."

Rep. Kolb, having reserved the right to explain his protest against the passage of the bill, made the following statement: "Mr. Speaker and members of the House: I voted no on House Bill 4234 because the bill would cause job losses across the state as local governments are forced to lay off more workers. As introduced, the Department of Treasury estimated HB 4234 could cost up to $125 million: $56 million from the School Aid Fund, and the rest from local governments. The cost of the current version is considerably lower, but still much more than the state, counties, and cities can afford right now. Even holding local governments harmless from the cost of HB 4234 simply shifts the burden to the state, which is already facing a billion dollar deficit. Although supporters would argue that the bill will create at least as much job growth in the private sector, the Department of Treasury pointed out that a $7,500 exemption will mean an average tax savings of $390 ­ hardly enough to hire additional staff, or truly spur long-term economic growth. Furthermore, this version is probably unconstitutional, because the state cannot create two different classes of personal property differentiated only by their value. Why should a business with $7500 worth of personal property pay no tax while a business with $8000 worth of property must pay tax on the entire amount? For all these reasons, I voted no on House Bill 4234."