Proposal 1: Can you trust it?

A news conference regarding Proposal 1 was held on July 31, 2014 at HME Incorporated.

WYOMING, Mich. (WOOD) — Wyoming’s HME Incorporated, one of the county’s top manufacturers of fire engines, is in a unique situation.

They’re burdened by the Michigan Personal Property Tax – a controversial levy that taxes businesses annually on factory equipment and other items used to run their business.

“It’s hard to grow a business… it’s hard to keep business growing in Michigan when we have that,” said HME’s CFO Todd Grasman.

But HME also relies on the beneficiaries of that tax – local government – to buy their product.

“You can’t just take the tax away and not fund it,” Grasman said.

Thursday, the group pushing for the passage of Proposal 1 used HME as a backdrop for their latest efforts to gather support for Tuesday’s primary election.

Proposal 1 has been promoted as the perfect solution to the PPT problem.

The measure, which has bi-partisan support in the legislature and is backed by both business and government leaders, does away with the tax while shifting another levy, known as the state use tax, to replace the lost PPT revenue.

While the PPT would go away with the passage of Proposal 1, businesses would still pick up part of the bill.

A special assessment would be levied on larger businesses to cover about 20 percent of what they pay for the PPT.

In addition, a number of business tax credits would be allowed to expire over the next few years.

While it sounds simple enough, confusing ballot language and mistrust in government could keep the PPT in place.

At least that’s what some 24 Hour News 8 viewers said in their comments online.

So 24 Hour News 8 went one-on-one with Proposal 1 supporter and State Rep. Tom Hooker to get some answers.

“I am, you know, one that’s very skeptical myself,” said the Byron Center Republican. “But I’ve studied this backwards and forwards and I believe that it is probably the best answer that could have been in place.”

So how do voters know the use tax, which is collected on things like out-of-state purchases and vehicle leases, will actually go to local governments?

“It will be guaranteed,” Hooker said. “It is statutory… it’s in place to protect those. So the money will get to the locals as it’s needed.”

A five-member tax authority, appointed by the governor, will oversee the user tax collection and distribution.

Perhaps the biggest selling point for voters is the promise that taxes won’t go up.

But that use tax seems like a tempting target to revenue-hungry politicians.

So why should voters trust those politicians not to raise the use tax?

“It’s actually constitutional,” Hooker said. “The only way that can happen is by a vote of the people.”

The guarantee is even on the ballot.

“Right in the law itself that voters are voting on, it says this cannot go above what currently is in place,” Hooker said. “So it’s good as you can guarantee it.”

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