Taxes — August 7, 2014 at 4:27 pm

Warren Mayor Jim Fouts plans to sue to overturn Proposal 1: “Blatantly unlawful and fraudulent”


Warren Mayor Jim Fouts plans to file a lawsuit to overturn Proposal 1, approved by voters in Tuesday’s primary. The ballot initiative eliminates the Personal Property Tax which taxes businesses for equipment that they own, giving Michigan businesses a half billion dollar tax break on top of the $1 billion cut in corporate taxes passed in 2011.

Fouts said the lawsuit will contend that the wording of the ballot proposal violated state law. He called the wording “confusing,” “one-sided,” “prejudiced” and “blatantly unlawful and fraudulent,” in a news release today announcing that he has directed the city attorney to file the lawsuit Friday in the Michigan Court of Claims.

“State of Michigan law is crystal-clear prohibiting slanted ballot language for any proposal,” he said, adding that he was the only elected official in Michigan to oppose the question.

The language of the proposal didn’t actually even mention that this was a huge tax cut for businesses and is clearly slanted to encourage a yes vote:

More from Mayor Fouts:

Fouts said wording in the proposal was a “sales pitch appealing to all voters.” He cited such phrases as “helping small businesses grow and create jobs,” “modernize the tax system,” “police safety, fire protection, and ambulance emergency services,” “aid to local school districts” and “prohibiting the authority from increasing taxes”.

Fouts said the proposal purposely avoided using works like “tax cuts for large manufacturers” because that would have caused a “voter backlash” diminishing the chances for approval.

“But tax breaks for large manufacturers is the essence of the proposal with minimal tax breaks for small businesses,” Fouts said. “And state legislators conveniently left out the use tax increase in the proposal’s language.”

Fouts is also filing a complaint regarding state legislators sending our promotional materials for Proposal 1 at taxpayers expense, saying that they should reimburse the state for “that abuse”.

Godspeed, Mayor Fouts. I wish you well on this.

  • Don Handy

    Yea! When I voted against it, I thought it was weird that it mentioned the trickle-down economic promise of creating “new jobs.” I mean, are the companies going to be held liable, if they don’t? Unless the jobs are in ivory back-scratcher or yacht plants, this was an empty promise.

  • Jeff S.

    I don’t like Jim Fouts whatsoever. But he does have a point here.

  • BillW

    No doubt this will end up at the Michigan Supreme Court…so we’re doomed.

  • bryan

    The 5th bullet point says that there is a “constitutional 6% limitation” on the use tax. This is false.

    The Michigan constitution places a 6% limitation on the SALES tax, but says nothing about a limitation on the USE tax. The use tax is a separate tax, and the constitution speaks of them as separate taxes. The use tax RATE is the same as the sales tax rate, but that is not constitutionally mandated — it could be different, if the legislature chooses. The constitution only says that the use tax will get a 2% “additional rate” (starting in 1994). So the legislature can set the use tax to 6% and add the constitutionally mandated 2% “additional rate”, yielding an 8% use tax, without being in conflict with the constitution.

  • Votekeeper

    Let’s all work to support Mayor Fouts, and get our local communities to do likewise. It is sad that local governments were blackmailed into silence, or into nominal support of Prop 1, based on the real threat that the Teapublican legislature would go ahead and flat out repeal the PPT in the Shame Duck session, with no provision for making up the lost revenue. Only problem with this blackmail: the supposed revenue make-up from the use tax collected in the future is just a kiss and a promise.

  • Sharon Douglas

    So happy to hear this! The way they worded it on the ballot is SOOOO illegal I wondered how the heck it got on. And yes, it is a stupid way to tax something but the republicans have already given 27 or 29 tax breaks to big business in this State already causing us to lose over a billion in revenues. And like every other tax cut to ‘create jobs’ the tax cut is not contingent on job creation. And like the other tax cuts it WILL be made up on our backs. And, like the others, it really does not help the real ‘small business’ owners. It’s for the Big guys. Remember, in Congress they changed who they can refer to as ‘small’ business owners by changing on how many people own the business, not on how many employees it employs. So Koch Industries and WalMart can be called “Small Business Owners”. And those are who they are really referring to when they say they want to help small business owners. And look – only 2 words in caps!

    • Hah! I’m proud of you!

      Seriously, though, great comment. I hadn’t heard about the redefinition of “Small business”. Fer cryin’ out loud…


      Yep, Wall St and Hedge Fund managers helped redefine small business. A multi billion dollar hedge fund run by two is a small business now

  • Malmborg Implano

    As a local government employee, this law will affect me directly as it means having to work with severely reduced budgets and seriously greater odds of being laid off or reduced to part-time. But this is what voters chose. I don’t believe they didn’t know what they were voting for. I think that this is another demonstration that Michigan workers really want jobs and are willing to sacrifice our own interests in order to get them. I personally don’t think it’ll help any more than passing the “right to work” law or other concessions to employers has, but as always I hope that I’m wrong.