Michigan's Proposal One Passes By Wide Margin

Aug 6, 2014

Business and local government groups are applauding Michigan voters' decision to get rid of a tax on business equipment.  

Michigan will phase out an unpopular tax on business equipment. Voters overwhelmingly approved Proposal 1 on the primary ballot Tuesday.

Gov. Rick Snyder says the proposal was a win-win for businesses and local governments, which collect the tax.

"One, it'll make us more competitive in terms of our businesses, which will lead to job creation." Snyder told reporters Tuesday. "Secondly, it's going to help our local governments to have a more stable, better source of revenue. And third, it doesn't cost our taxpayers a dime."

Communities depend on revenue from the tax to pay for things like police, fire, and roads. Snyder says the proposal ensures they will be fully compensated for any lost revenue.

Local government groups say they agree.  "I think, from the local government level, it really provides certainty for us in a way that the failure of Proposal 1 certainly would not have created that certainty," said Samantha Harkins with the Michigan Municipal League.  "And we've had a lot of uncertainty in the last decade."

The complicated ballot question overcame confusion about what it would do, as well as distrust in Lansing, to win a landslide victory. Harkins says the fact that it was a primary election with low voter turnout may have helped Proposal 1's chances.

"People who take the time to vote in primary elections are generally more educated and probably did their homework on Prop 1, perhaps more than would have been the case in a general election," she said.

Some local officials say they do not trust the state to keep its promise to compensate them for lost revenue without raising taxes.