THE TAX ATTIC with Jerry Coon

A look at eliminating Personal Property Tax 

Jerry Coon

Since being elected to the Rockford City Council last November, that position has enabled me to look at events and issues in an entirely new light. In addition to my running-a-business-in-the-Rockford-area point of view and my member-of-the-community-living-on-Longview Drive viewpoint, I now look at events and issues from the position of being a representative of the residents of Rockford. I feel that I am obligated to speak for all of us living in Rockford.

For example, our Michigan legislature has made a myriad of changes to our overall tax situation since Governor Snyder took office. All of us either are, or will be, affected by those changes. Some of these changes have negatively affected the funding for not only the Rockford Public Schools but also the City of Rockford. Reducing the funding for the schools could negatively affect the vitality of our public schools. Reducing the funding for the city could negatively affect the services provided to residents.

As the superintendent of Rockford Public Schools, Dr. Michael Shibler has fiercely defended the school’s funding to fight against any loss of vitality. As Rockford’s city manager, Michael Young is fighting daily to keep Rockford on an even keel. We are so very fortunate to have these two men leading these two organizations. They work day and night on our behalf. Of course, they have good people working on their staffs, but they set the tone of the organization. We all know people who have moved to the Rockford area because of our schools. It’s a known fact that people move to and visit this area when they encounter the charm of our downtown area. I submit the claim that the two are interdependent and if either suffers, they will both suffer. They suffer and our community as a whole suffers.

I believe an appropriate conclusion to reach is that any further reduction in funding from Michigan for either the schools or the city will have a detrimental effect on both, and that affects you and me.

That brings me to point of this lengthy discourse. There is a current discussion in Lansing regarding the elimination of the Personal Property Tax (PPT) with no plan for a replacement revenue stream. The PPT is paid only by businesses and only on the equipment they own. Action Tax Service owns equipment such as computers and furniture, so we pay the PPT. From a business owner aspect, I would like to see the PPT eliminated. It would save me some tax money. However, as a citizen of Rockford, should I want Action Tax Service to be relieved of paying the PPT? Let’s take a look at the whole picture and try to determine if eliminating the PPT with no plan in place to replace that revenue is really a good idea.

What percentage of Rockford’s total revenue comes from the PPT? How much money are we really talking about?

Rockford receives a total of $2,344,372 of revenue from Real Estate and Personal Property Tax. Of that amount, $289,163 or 12.33% comes from the PPT. The blunt fact is that by eliminating the PPT without a replacement source of revenue, the City of Rockford’s revenue will decrease by $289,163. There probably is not a city, village or township in the state of Michigan today that could lose 12.33% of its revenue without making drastic cuts.

I don’t want to unnecessarily alarm anyone, but what department or service would you like to see drastically cut? Rockford budgeted $396,700 for its fire department. How much of that can we afford to cut? It budgets $161,000 for park maintenance. It budgets $513,300 for public services.

Another important item in the budget is road maintenance. Around town lately, we have seen some badly needed roads receive some tender loving care. We budget $380,900 for maintaining those roads. We could certainly do without that maintenance for a short while, but how long would it take for our roads to completely fall apart?

Michael Young and the City Council would be making some very tough decisions should the Personal Property Tax be eliminated.

The public schools do not receive monies directly from the PPT, but those dollars go into the total fund from which the schools receive their allocated amounts. In the case of Rockford, it receives $7,046 for each student in the system. If the monies going into the total fund decrease, it is a certainty that the $7,046 will also decrease. How much further can the school’s funding be cut before the quality of education also begins to decrease? I hope we don’t find out what the figure is.

The legislature is being very shortsighted if they eliminate the Personal Property Tax without a replacement revenue stream in place. I do advocate e-mailing our local Representative Pete MacGregor and Senator Mark Jansen in this matter. If they wish to eliminate the PPT, they must also institute an alternative funding source. Without those funds coming from some source, the City of Rockford, the Rockford Public Schools and, consequently, you and I will suffer. This is Jerry Coon signing off.

Jerry Coon is an Enrolled Agent. He owns Action Tax Service in Rockford. Contact Jerry at

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