Legislature passes bills to make up for Battle Creek revenue shortfall

Battle Creek City manager Rebecca Fleury.

BATTLE CREEK, Mich. — Legislation that would rectify a $2.4 million shortfall to the City of Battle Creek is heading to Governor Rick Snyder, and waiting to be signed into law.

State Senator Mike Nofs sponsored Senate bills #1222 and #1223. The measures would resolve a recently-identified deficiency in the formula to reimburse communities for revenue lost when the industrial personal property tax was eliminated. Senator Nofs says the formula inadvertently shorted the Battle Creek Tax Increment Finance Authority District and the Downtown Development Authority approximately $2.4 million per year, combined.

The industrial tax was for heavy equipment such as stamping presses, welders, heavy construction machines and similar equipment used by businesses to make their products.

“Since the PPT was tied to the value of equipment, it was a disincentive for investment and upgrades, and both the business community and local governments viewed the tax as detrimental,” said Nofs, R-Battle Creek.

Nofs sponsored legislation in 2014 that phased out the PPT. To make sure local governments remained intact, a formula was developed to reimburse communities.

“The calculations are complicated,” says Nofs, “and these types of problems may arise. When they do, it is our responsibility to make sure we tweak the formula to keep our promise. That is what these bills do.”

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