Fouts: Elimination of tax will have 'disastrous effect'

By Amy Lange
Fox 2 News

WARREN, Mich. (WJBK) -- "It's going to have a disastrous effect upon cities because all of the cities are going to face the possibility of financial ruin, bankruptcy and probably an emergency manager," said Warren Mayor Jim Fouts.

He said his city stands to lose too much with the legislature's elimination of the personal property tax on business machinery and equipment.  Cities, especially industrial cities, have relied on the revenue for decades.

"They're placing the burden on cities.  They're placing the burden on mayors such as myself, and they're eliminating the personal property tax, which really affects cities with an industrial tax base," Fouts said.

Cities such as Warren, Sterling Heights and Detroit, which Fouts said stands to lose $50 million in 2016.  Warren, he said, stands to lose $10 million that year and the recent millages there for library, roads, police and fire will be wiped out.

"I don't call that a tax shift.  I call it a shaft and it's a shaft on the average taxpayer," said Fouts.

The mayor said there is just no way city services would not be impacted like snow removal, garbage pickup and even police and fire.

Fouts said he'll have to go before a metro authority appointed by the governor to get money back for police and fire all because of the actions of the lame duck legislature.

"They're going to create jobs for emergency managers, but cities are going to have to lay off personnel.  They're going to have to lay off a lot of important people."

The mayor, a former government teacher, said he's never seen anything quite like it.

"Goes against transparency in government.  It goes against openness in government.  It's really a shameful legislative body."