In Michigan, specifically Lansing, your “coolness factor” can depend on whether you are Austin, Chicago, West-or-East Coast bound after graduation. If you aren’t – good luck explaining why; especially to your date.
It’s hard to retain Michigan youth in the state if “moving-out” is a part of their Plan A throughout college. Though, you probably can’t blame them (I always sympathize with the weather argument). But the truth is – we have failed to attract businesses and investors for decades now, thus leaving Michigan with little or no appeal for millennials. Our lawmakers, ‘ill-advisedly’, have been very slow to react, act and deliver. But, the winds of change have started to blow in the right direction.
Many young aspiring entrepreneurs didn’t realize until very recently that our ideas, if grown into successful Michigan businesses, were subjected to “Personal Property Tax” (PPT). However, on August 5th, via public referendum, Proposal 1 was passed and above mentioned PPT has now been allowed to phase out.
What is PPT?
In a nut-shell – if our businesses included any property such as machines, equipment, furniture, and tools, we were paying annual property taxes on them. These taxes were collected at local levels and were allocated back to city governments, townships, counties and school districts. Some feared, cutting-off such revenue-generating practices could affect our local communities – especially police and fire – Fair enough! Many believed PPT was a hurdle in attracting manufacturing investments, out-of-state businesses and startups in Michigan – Rightly so!
What’s the compromise?
Bipartisan legislature has drafted a road map to fully replace revenue for local communities while PPT is on the way out. Recently inked legislations by Gov. Snyder ensures an establishment of a fund to reimburse for lost revenues to local governments. These annual state appropriations will be further funded by expiring MBT (Michigan Business Tax) tax credits.
It would be naïve to expect drastic changes in our state’s business and entrepreneurial activity right away. But my optimism relies heavily on Anderson Economic Group’s policy report, which suggest that changes in tax structure “could result in a 1.5% – 3.5% increase in investment and consumption by businesses and 20,000 to 45,000 additional jobs in state”.
The good news, we will no longer be the only Great Lakes state (besides Indiana) that continues to tax business property even if depreciates in value. Oh, and – we might also be able to stay here and still be considered – ‘cool’.