Proposed Legislation Would Allow Locals to Implement "Rain Tax"

Date: May 01, 2018

Republican sponsored legislation in the state Senate would empower local units of government to set up a “storm-water utility” with the power to assess fees on citizens and businesses.

NFIB opposed Senate Bill 756 when it came before the Senate Natural Resources Committee telling the Committee that the bill seeks to do an end run around past court decisions that have ruled against these various local”’fee” attempts. Courts have ruled that the fees are nothing more than local taxes imposed without a vote of the citizens within the taxing jurisdiction.

The Michigan Supreme Court ruled in 1998 that an attempt by the City of Lansing to impose a storm-water management fee was an unconstitutional tax. In 2013, the Michigan Court of Appeals ruled the City of Jackson’s storm-water ‘fee’ was an illegal tax because a public vote was not taken on the issue and it violated the Headlee Amendment. In the case of the 2011 City of Jackson storm-water tax attempt, one small business owner was assessed $6,700 in the first year.

Empowering local governments to subvert the constitutional and proper process for raising taxes, by disguising taxes as fees, undoes the hard work that the legislature and governor have done to improve Michigan’s business climate. Companies considering expanding or locating to Michigan will be discouraged by this kind of local conduct and companies already in Michigan will avoid those localities.

Related Content: News | State | Michigan | State | Tax Help | Taxes

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