Fouts appeals ruling on machinery tax

Ursula Watson
The Detroit News

Warren – — Mayor James Fouts filed an appeal Tuesday of a ruling by the Michigan Court of Claims that threw out his lawsuit against the ballot initiative that eliminated the state’s personal property tax.

The elimination of the personal property tax applies to office equipment and industrial machinery — an important chunk of Warren’s budget.

Fouts said the passage of Proposal 1 could spell financial disaster for communities across the state.

“I think I have a fiduciary duty to challenge this because it is going to devastate our financial stability,” Fouts said Wednesday. “It is going to cost the voters, the city of Warren, $10.6 million in 2016.”

Fouts added that big manufacturers bought the election for their benefit, and the taxpayers will pay with a tax increase to make up the $500 million lost in revenues.

After voters handily passed Proposal 1 on Aug. 5, Fouts filed a lawsuit with the Court of Claims, arguing the ballot initiative’s wording was “confusing” and “blatantly unlawful and fraudulent.”

But in a Dec. 11 ruling, Judge Deborah Servitto said she didn’t find the wording misleading.

“I was absolutely appalled by the judge’s decision,” Fouts said. “She denied not only myself but all the voters in Michigan a day in court to resolve this.”

The mayor said he paid $400 of his own money to file the appeal.

Repeal of the tax had broad support among Democrats and Republicans in the Legislature. The measure passed with 69 percent of voters supporting it.

In August, Gov. Rick Snyder’s office said the proposal “surpassed the scrutiny of lawyers (and) numerous and diverse stakeholder groups.”

“The bottom line is that this is a bipartisan proposal that creates a system that is fairer, doesn’t penalize companies for investing in the state and protects communities by providing them a stable revenue source to help provide essential services — all without raising taxes for Michiganders,” Sara Wurfel, the governor's spokeswoman, said at the time.

(313) 222-2613