State Legislature
8:02 am
Fri May 11, 2012

Michigan Senate votes to phase out industrial tax

The Michigan Senate has voted to phase out an industrial tax that’s a big revenue generator for school districts and local governments. Republicans amended their original plan to make sure much

of that money for local services and education would be replaced.

State Senate Majority Richardville says if money from the state falls below a certain level, communities could return to taxing industrial property.   

“It’s kind of a poison pill, as we call it in legislative jargon, where, if we don’t keep our promises than the whole program disappears, so it forces the state government to say we will keep you at the level we say it will,” Richardville says.

Richardville acknowledges there’s no way to guarantee schools and local governments won’t see some reductions. The money for the replacement would come from the sunset of other tax breaks.

Republicans say Michigan’s tax on business and industrial property is unique in the Midwest and drives investment elsewhere.

The Senate rejected efforts by Democrats to link the tax phase-out to job creation targets.