A package of 10 bills was passed by the Michigan Senate and House of Representatives in March, which is intended to restore 100 percent of the revenue local governments and community colleges were set to lose due to phasing out the personal property tax (PPT). Washtenaw Community College previously estimated a loss of up to $1.6 million per year in tax revenue.
In 2012, the legislature passed a package to phase out the personal property tax, which is a tax on industrial equipment owned by businesses. The changes passed at that time would have only granted 80 percent replacement to local governments, and that is only if they were able to adopt essential service assessments. Community colleges would have seen up to an 80 percent replacement, but some estimates pegged the amount as low as 40 percent.
Recent changes to the phase-out of PPT were passed with the hope of gaining more widespread support by local governments, community colleges and other stakeholders. In order for the PPT phase-out to happen, a statewide Headlee Amendment vote on August 5 must be passed to authorize shifting Use Tax dollars to local governments. If voters do not pass the measure, then the PPT would not be phased out at this time.
Budget Amendment Calls for GED Funding
State Representative Adam Zemke (D-Ann Arbor) called for graduate equivalency degree (GED) funding during the State budget process in March. An amendment, introduced by Rep. Zemke, passed the House Appropriations Community College Subcommittee, which put a $100 placeholder in the budget while a full plan is being developed. A work group is being formed to write a program to encourage those taking their GED to enroll in higher education. The work group will consist of legislators, state policy staff and community college officials, and will be tasked with determining how many students the program will affect and how much the program will cost. Erin Schor, legislative director of the Michigan Community College Association, was called upon to comment on the proposal during the subcommittee hearing and expressed the association’s support as long as community colleges have a choice of whether to participate.
Rep. Zemke explained that the increased cost of GED testing, now $150, is too expensive for those most in need of the test. He hopes to benefit students and gain legislative support by pairing funding support with a requirement to enroll in a certificate, job training or degree program at a community college. The need to support students came from a conversation between Rep. Zemke and Washtenaw Community College Adult Transitions Manager, Bonnie Truhn, who expressed her concern over the new financial burden. After a lengthy conversation, the two concluded that the State should find a way to address the issue and assist students to ensure continued completion of GED testing. Passing of Rep. Zemke’s amendment was the first step in a lengthy budget process. The legislature is on recess for three weeks, which allows time for further development of program details. Following recess, a dollar value will be established and the amendment will have to pass through the full House Appropriations Committee, the full House of Representatives, and be agreed upon in conference committee with the State Senate.