Michigan’s personal property tax should be eliminated without replacement. It is a burdensome tax that directly discourages one of the things that Michigan needs most: business investment.

The personal property tax requires business owners to put a value to all of its equipment — from paper clips to industrial presses — and pay annual taxes on it. Considering that this equipment helps keep Michigan residents employed, eliminating this tax will encourage business growth.

It also contains some natural complexities. It becomes difficult for businesses to put a value on a number of pieces of their equipment, and likewise difficult for assessors to verify. It becomes especially difficult for businesses with mobile equipment — such as contractors with heavy machinery — to count. One contractor, Joe Dunigan of Dunigan Brothers, testified before the Michigan Legislature earlier this year that personal property taxes could double depending on where his jobs were being done at the end of the year. “It forces us to play a game we shouldn’t be playing,” he remarked in a phone interview.

Thankfully, the tax is not all that large — at least in state government terms. It raises around $1.3 billion annually and secures it to local property tax jurisdictions that are fortunate enough to have decent amount of business investment. Considering that Michigan governments at all levels raise $14 billion from property taxes, eliminating the personal property tax would be about a 10 percent cut in tax revenue.

Property taxes aren’t the only source of income for Michigan’s government schools and localities. Districts also get chunks of guaranteed revenue from state income and business taxes. Cities, villages and townships also get pieces of sales taxes revenue. These two pieces of revenue are doing quite well — year-to-date figures show the taxes higher than last year by 3 to 16 percent. While eliminating the personal property tax will drop local government revenue, they may also receive higher income from other tax sources due to business and employment expansion.

Finally, the state government is already assisting local governments in becoming more efficient in their services. As part of the current state budget, schools and local governments will receive extra money for following practices intended to make them more transparent and less expensive. The newly enacted bill that caps government insurance premiums or requires 20 percent premium sharing will also help to cut expenses in local governments. While any savings will accrue to those governments, the state can let businesses benefit from the moves by eliminating the personal property tax.

Some local governments have higher proportions of their revenue from this tax, and legislators may want to make up for that in the appropriations process if it decides to eliminate the tax. But legislators should really consider the net effects of the state’s fiscal situation when eliminating the personal property tax. It may be ripe for elimination without replacement.

A proposed "right-to-teach" bill has been introduced in the Michigan Senate by Sens. Arlan Meekhof, Phil Pavlov and Randy Richardville. Unfortunately, the bill may backfire because it focuses too much on the MEA.  

A broad right-to-work law, in which all employees throughout the state would have the freedom to choose for themselves whether to support a union, would clearly be best for Michigan. Still, there is an entirely reasonable case to be made for starting with teachers in the public schools: Teachers are professionals, and their craft is especially ill-suited to industrial unionism. The need for reform in public education is especially pressing.

This rationale applies if right-to-teach is just what the name implies: right-to-work for public school teachers. As submitted, the bill fails to protect all public school teachers, however. Instead, it applies only to public school unions with more than 50,000 members (presumably in the state). That would mean the Michigan Education Association — and nobody else.

The impulse to single out the MEA is understandable; the state's largest school employee union is arguably the most powerful lobbying group in Michigan, and through its targeted recall campaigns, it has set itself up as the nemesis of the current legislative majority. Its complicated and cozy relationship with the health insurance administrator MESSA has added to the cost of school employee health care benefits, a substantial financial burden for many Michigan school districts.

But as submitted, the "right-to-teach" bill looks too much like political payback. In fact, by continuing to allow forced union dues in public education, the bill leaves the MEA with an out: shed just enough local school unions to get under the 50,000-member threshhold. The teachers union wouldn't necessarily need to become smaller in practical terms — just restructure things to avoid the 50,000-member limit. Locals could be affiliated under a nominally independent group that just happens to be staffed with old MEA people. Access to MESSA-brokered health insurance could also be used to keep the "breakaway" group in line. Or the NEA might try to set up a second affiliate in Michigan and transfer locals there. Moreover, the bill would provide no relief to teachers or schoolchildren in what might be the most dysfunctional school district in the nation: Detroit, where teachers are represented by an affiliate of the American Federation of Teachers.

The Senate majority would do better to stand on the principle that workers should not be forced to financially support a union that they do not agree with and that might not serve their best interests. If the senators want to start with teachers, that's defensible, but starting with a particular union — even one as problematic as the MEA — looks too much like partisan politics and creates ways for the MEA to wriggle free.