Page 8- Supplement to The Michigan Daily - Sunday, November 2, 1980
The following are the main provisions
of the state's tax structure that will be
retained if the three property tax relief
proposals on the ballot are defeated:
" Property taxes, limited by the state
Constitution to 50 mills, are collected
and spent locally. The property tax rate
is set in "mills" and is different in each
area of the state. Most of the money
goes to schools and for the operating
expenses of townships, counties, and
* The state income tax rate is set by
the legislature at 4.6 percent. Some
cities impose income taxes..
* The state sales tax is con-
stitutionally set at 4 percent.
* The state legislature has the power
to impose taxes, but it is limited by a
constitutional provision for a balanced
budget, a state spending limit of 9.8
percent of the total personal income of
Michigan residents, and a requirement
that almost half of the state revenues go
Local property taxes are assessed in
the following manner:
" An assessor determines the market
value a piece of property, and the
state equalized valuation-or level of
property assessment-is set at one-half
of market value.
" Property taxes are charged at the
local millage rate. For example, if the
market value of a home is $60,000, its
assessed valuation is $30,000. If the
property tax rate is 25 mills, the
homeowner would pay $750-$25 for
each $1,000 of assessed value.
Tinder the state's current property
tax credit plan, a person would receive
an income tax credit of 60 percent of the
amount by which his or her property
tax exceeds 3.5 percent of the in-
According to the Headlee tax
limitation amendment-approved by
voter referendum in the 1978 elec-
tion-if the value of property within a
local unit of government rises faster
than the general price level, the millage
rate must be reduced to offset inflation.
Supplement to The Michigan Daily - Sunday, Noverm
Pursell, O'Reilly offer
2nd District voters
different political styles
A ~Proposal A's supporters say it will 1
provide property tax relief-and an
equal and quality education for all
students in the state. Its critics call it a
step toward socialism.
Proposal A-often called the
Smith/Bullard plan-would amend the
constitution to establish a statewide system of finan-
cing elementary and secondary school educationso
that it is not primarily dependent on local residential
It would provide many of the state's residents with
property tax relief and shift the financing of school
operating costs to increases in the state income tax and
business property taxes. Proposal A's greater reliance
on the income tax is considered more equitable than
the current tax structure by some people. People in-
communities that spend a lot of money on education
and those in communities with a substantial industrial
base would end up paying more for the education of
those students in poorer areas.
PROPOSAL A would:,
* Limit residential property tax rates to a maximum
* Limit property assessment increases to the rate of
* Exempt the first $25,000 in assessed property
valuation of people 65 years old or older. This figure
would be adjusted with the Consumer Price Index.
* Make local control of local school finances con-
* Give local governments the option to increase sup-
port to schools through a 1 percent income tax or a 7
mill school levy.
NEW STATE FUNDS to pay for the school system
would come from an increase in personal income tax or
a tax on commercial and industrial property not to ex-
ceed 30.5 mils. The specific financing plan will be left
to the legislature.
There will be a phase-in period of five years. During
that time, the plan would require the state to replace
lost revenue of any school district.
There is no property tax relief for renters. However,
legislation written for Proposal C that gives a $140 in-
come tax credit to renters would be enacted under
either Proposal A or Proposal C.
The plan's main proponents are its sponsors, State
Reps. Roy Smith (R-Ypsilanti) and Perry Bullard (D-
Ann Arbor). The Michigan Education Association and
the League of Women Voters also support Proposal A.
It was placed on the November ballot by citizen
The state's politicians heard cries for
a property tax cut and, with tax slasher
Robert Tisch at their heels, devised a
tax shift plan that would provide some
property tax relief without depleting
Proposal C-the Milliken-Legislative
I , r
Here's the first question in the tax cut
game: Do you want your property taxes
cut? Yes, the Michigan citizen answers.
Do you want your income taxes
raised? The Michigan citizen answers
Do you favor an increase in state
tax plan-would make up the money lost through local
property tax cuts by raising the state sales tax from 4
to 5.5 percent. The state would then reimburse local
governments for the loss in property tax revenue.
Nearly all Michigan taxpayers with incomes of less
than $50,000 would experience some tax relief-depen-
ding on personal income and the value of their home.
The estimated increase in sales tax for a household
with an income of $50,000 is $261. The averagae cut in
property taxes would be $350. In Ann Arbor, the
average property tax reduction would be $434.
PROPOSAL C would:
" Exempt the first $7,100 in assessed valuation of
residential property from property taxes.
" Increase the state sales tax from 4 percent to 5.5
* Exempt from property tax persons 65 years old or
more whose household income is less than $10,000 from
tax bills of up to $1,200.
" Give renters a $140 income tax credit.
" Phase out the sales or use tax on energy products
such as electricity, natural gas, and fuel oil by Jan. 1,
* Earmark lottery revenues for school aid and
establish a "rainy day fund." These two provisions
would write into the constitution what is already prac-
" Make adjustments to the 1978 Headlee tax
limitation amendment relating to limits on state spen-
ding and returning a fixed portion of revenues to local
All the property tax exemptions will be indexed to in-
The state legislature has already written nine pieces
of legislation that would implement the constitutional
amendment if it passes. It was placed on the ballot by
Critics of£ Proposal C say it replaces one regressive
tax, the property tax, with another regressive tax, the
sales tax. A tax is considered regressive when low-
income households spend a proportionally higher part
of their earnings on taxes.
sales tax? No, the Michigna citizen repeats.
That's an ad for the controversial Tisch tax cut
plan-Proposal D. What it doesn't tell you, and what its
critics don't hesitate to talk about, is that Tisch would
reduce state revenues by $2 billion.
Shiawassee County Drain Commissioner Robert
Tisch, the author of Proposal D, thinks high taxes are
supporting government waste. Proposal D's opponents
say it will do more than cut the "waste" out of gover-
nment. University President Harold Shapiro and Gov.
William Milliken say it would "devastate" the Univer-
sity and the state's economy.
Proposal D includes the following provisions:
* Property assessments would be reduced to 50 per-
cent of 1978 levels. Increases in assessments would be
limited to 2 percent per year.
" Property taxes would be eliminated for households
with incomes less than $5,000.
* Property taxes would be reduced by 75 percent for
households with incomes of $5,000 to $10,000 per year.
" Michigan homeowners over 62 years old would not
have to pay school millage.
* Most current property tax exemptions, except
those on schools and churches, would be removed.
* The state would be required to reimburse local
governments for their revenue losses.
" The legislature would be required to submit
proposals for new taxes to a referenda vote. A 60 per-
cent vote would be required for approval.
Many of the issues raised by the Tisch proposal
would be subject to court interpretation. Tisch, for
example, considers tuition a tax that would have to be
approved by voters. The University would probably
Support for Proposal D comes from many rural
Michigan residents, the Michigan Realtors'
Association, and most members of the Libertarian par-
ty. It was placed on the ballot by citizen petition.
While U.S. Congressman Carl
Pursell says he expects to carry all
three counties in his re-election bid
for the 2nd District seat, his
challenger, consumer advocate
Kathleen O'Reilly has targeted her
campaign on the large student
population in the diverse district
which includes parts of Wayne,
Washtenaw, and Monroe counties.
O'Reilly, the former head of the
Consumer Federation of America,
says she is "proud of being someone
who knows the inner trackings of
Congress." She cites her
Washington experience as a lobbyist
for consumer issues, such as
national health insurance, control of
oil prices, control of toxic substan-
ces, reduction of interest rates, and
strengthening of anti-trust laws.
THE 34-YEAR-OLD Democrat,
who has acquired a reputation as a
fast talker and thinker, says "It's
good to be back in Michigan where
people can think as fast as I can
talk." She is a graduate of
Marygrove College in Detroit and
the Georgetown University Law
"I can do so much more for you if I
can walk through the doors and vote
for you," she recently told a
gathering of the League of Women
voters. "Virtually every state gets
back more money than we do. I will
work for you in bringing home the
bacon as well as the issues."
IN HER campaign, O'Reilly built
a strong base of support among con-
sumer advocates, senior citizens,
students, and particularly women.
She has worked for the Equal Rights
Amendment and against credit
discrimination and balks at Pur-
sell's Women's Task Force, calling
it a "stall device."O'Reilly maintains
that Pursell's proposed Women's
Bill of Rights contains issues
already embodied by legislation."
THE CANDIDATE says she feels
energy is the most pressing issue
presently facing the nation. She ad-
vocates a "sound energy policy" of
of solar, wind, and geothermal
energy, as well as conservation, to
move away from (dependence on)
foreign oil so that we can become
self-sufficient and bring down in-
O'Reilly, who supports funding of
abortions for low-income women,
has repeatedly attacked Pursell for
what she calls his "inconsistency."
Pursell, who opposes abortion ex-
cept in the case of rape, incest or
danger to the health of the mother,
voted for the Hyde amendment
which prohibits, without exception,
funding for abortion.
"This district craves and deserves
leadership," O'Reilly said. "I'm
tired of seeing his finger up in the air
and testing the wind," she said of
Pursell's reputation as a bi-partisan
O'Reilly has been endorsed by the
United Auto Workers, the League of
Women Voters, and the local
National Organization for Women
ACCORDING to Rep. Pursell,
O'Reilly "would not be effective as a
legislator because she is so doc-
Now seeking a third term in the
House, Pursell is a life-long resident
of the district and has served on the
Washtenaw County Board of Com-
missioners and in the state Senate.
. He views O'Reilly's consumer-
oriented candidacy as outmoded and
has labelled her proposals "ob-
solete." He also says her criticism of
his tax reform bill is "irrespon-
Pursell, who says he likes to work
"both sides of the aisle" for a bi-
partisan effort, has sponsored a
$158.5 billion 5-year tax cut similar
to the Kemp/Roth plan-a 30 per-
cent tax cut over three years-and
expects that it will be debated in
Congress within the next six months.
DURING HIS four-week cam-
paign, Pursell focused on the issues
of inflation and unemployment. He
feels "inflation is the single greatest
concern of the people of the 2nd
District." A balanced budget, im-
proved productivity, responsible
wage and price controls, and the
curbing of "affluent appetites" are
necessary to restore the economy,
Pursell's campaign also em-
ber of the
vices, and La
out that as c
which he e
5,000 jobs th
against a pea
ports the Equ
ms of energy
wants to regu
dorsed by th
Five run for state court
QA:T heTects fA
* Q: What happens if more than one of supporters of that plan. Claims by some cent. In addition the University's Dear- state fu
the tax plans passes? that the entire state education system born and Flint campuses would be madev
A: The proposal that receives the would be wiped out are not necessarily eliminated. The contingency budget those u
largest majority would be enacted. realistic. Tisch correctly says that the was prepared as a political document to Q: H
Portions of the other one or two state would not destroy the state's fight Proposal D, and it is unlikely-but A:T
pfoposals that win a majority of tradition of support for higher possible-that the contingency budget Shiaw
votes-and don't conflict with changes education if the proposal passes. No would actually be adopted if Proposal D Robert
made under the first plan-would also one, however, knows much of the passes. tax an
be made part of the constitution. This system, if any, would be eliminated. The University would certainly lose cut pla
would be subject to judicial inter- The state prepared a contingency some of its money from the state, which raising
pretation. budget under Proposal D that cuts all accounts for just under 60 percent of the the cou
Q: How will the University be affec- state funding from 10 of 13 colleges and University's generalfund. The Univer- wouldI
by the three tax plans? universities, and reduces ap- sity might became a semi-private in- figures
A: No one knows what would happen propriations to the University of stitution. approve
under Proposal D, despite claims.that Michigan, Michigan St pf Ugiveity Jnder, Prposals A nd . C, the voters.
are being made by'both opponents'ant..apd'.Wayne, Stat$ ;iversityby, 50 per U.njversity. Xuld prppb4ly losesson % *_i i'
Lnds over time, but the changes
would not be as measurable as
nder Proposal D.
ow will tuition be affected?
The author of Proposal D,
see County Drain Commissioner-
Tisch, believes that tuition is a
d subject to a portion of his tax
n that shifts responsibility for
all taxes to voter referenda. If
arts find this to be true, tuition
have to be decreased to 1978
; any increase would have to be
ed by 60 percent of the state's
Continued from Page4)
significant delay." Noting that other
state appelate courts have backlogs of
years, Levin claimed that the Michigan
Supreme Court "would rank very well
Dearborn attorney Elizabeth Burch
promises to "represent the people who
get frustrated in court every day." Sin-
ce the Supreme Court creates and ad-
ministers all rules for state courts, she
is running on the idea that a practicing
lawyer has the basic experience to un-
derstand- where rules are going wrong.
"The justices are insulated by years of
being a judge," she says.
The University of Michigan graduate,
who served as a special assistant to the
state attorney general, emphasizes the
detrimental effect of the docket-
backlog. A Supreme Court backlog
"creates a problem in the entire legal
community," she said. "Opinions don't
have to be 40 pages long."
To deal with the 'backlog, Burch
suggests that a "family court" be
created to mediate domestic disputes.
This "court" would be administered by
support personnel rather than a trial
judge. She notes that it is necessary to
try "innovative rather than adversary
approaches to settlement of disputes."
Attorney Michael Hegarty said he
believes a major problem ihithehigh
court is the "morass of worrying about
administrative functions and
sometimes political functions." He sees
a need to "reduce to the basic sim-
plicity intended by the framers of the
In the revised version of the state
Constitution, court reform mandates
were set forth to simplify the judicial
system, and, according to Hegarty, the
number of court rules has since risen
from 58 to "literally thousands of court
rules and administrative orders with
the impact of rules.
"I am interested in restoring some
sort of normalcy," he said. "When the
legislature legislates and they come up
with a clear statute, the Supreme Court
is ... not there to impress upon it (the
statute) its own social theory or
Wayne County Circuit Court Judge
Joseph Sullivan said he is concerned
about excessive docket backlog. "If we
(circuit judges) don't finish a case
within four months ... we have to file a
report," he said.
"We don't have the same personnel
and research people (as the Supreme
Court does) but we have to account for
ourselves after four months."
Sullivan suggests such a system can
be carried over into the-Supreme Court.
Citing an analysis of the Supreme Court
in the Wayne State Annual Review, he
noted that 38 cases in the high court
went for more than 360 days without
resolution. - /et Rte
for 2nd Distri*
Libertarian James Hundler wants
power to be taken from government at
all levels, while American Independent
party candidate John Wagner would be
satisfied if more of the power was shif-
ted from the federal to the state level.
The two minor-party candidates are
running for election to the 2nd
Congressional District seat.
WAGNER, A 29-year-old Ypsilanti
resident who owns and operates a
janitorial business, said his policy
would include decreasing federal con-
trol and influence over public schools.
"I WOULDN'T promise students any
federal aid," Wagner says. His party
has maintained a platform based on
strengthening states' rights since it was
formed in the late 1960s.
"We're a very sick nation," says
Wagner, -who explains he is running out
of concern for his country. "We have
enemies around the world frothing at
the mouth to throw darts at us. The ac-
tual taxpayer must get involved."
Libertarian Hudler also favors
limited federal control of educational
institutions, but he would not replace
that control with more control from the P
state. He says he would rather see a
system of private schools. "I question
calls for the
any age," hi
right to any
what is bes
can have a I
dispose of th
want to," he