Local government and business groups have begun a campaign to convince voters to adopt a complicated question on the August ballot.
It would repeal and replace an unpopular portion of Michigan's personal property tax (PPT), which requires companies to pay taxes on certain business equipment. State lawmakers last month voted overwhelmingly - and with bipartisan support - to put the question on the August ballot.
But that tax generates revenue local governments depend on to provide basic services. So the proposal also seeks to reimburse communities for any lost money.
"The end result is pretty straightforward," said Tim Dye, a spokesperson for the coalition of groups pushing for the proposal. "We have tax reform that helps Michigan businesses and makes our state more competitive, and we have funding sources that are now more stable for our local communities. It's a win-win."
The state would give communities a larger portion of the revenue it generates from a tax it levies on out-of-state purchases to help reimburse them for the PPT repeal. State officials say they also expect to use money from expiring tax credits to help make up for any lost revenue.
Some critics worry communities could still see cuts under the proposal. But local government groups such as the Michigan Municipal League are urging voters to approve the measure in August.