Fouts: Warren will sue to invalidate Proposal 1 vote

By: Brian Louwers | Warren Weekly | Published August 8, 2014

WARREN — “Confusing, one-sided, prejudiced, blatantly unlawful and fraudulent” were the words Warren Mayor Jim Fouts used to describe the language included in Michigan’s recently approved Proposal 1 ballot question.

Fouts said the city of Warren would file a lawsuit as early as Aug. 8 seeking to invalidate the vote on the proposal, which passed by an overwhelming majority in the state’s primary election.

“This is larger than the mayor of Warren. It’s larger than Jim Fouts. It’s larger than Proposal 1,” Fouts said. “It’s about the integrity of the election process. There is nothing more important than the ballot, and if the ballot is unclear, if it’s biased, then it’s wrong.”

Fouts came out strong to oppose Proposal 1 in the days ahead of the Aug. 5 primary, but it was approved by nearly 70 percent of the state’s voters.

Voter approval for Proposal 1 was required under the Michigan Constitution because it represented a significant change to state tax law.

Earlier this year, a series of bills amended a 2012 law that set into motion the elimination of the personal property tax by phasing it out over the next decade.

Local governments have collected taxes on a depreciating scale for commercial and industrial business equipment for years. Under the new changes, businesses with less than $40,000 in taxable assets became exempt as of Jan. 1 of this year, while the rest will see relief from the personal property tax in 2016.

Proponents of the proposal said it would provide a steady way of compensating local governments for the gradual loss of personal property tax revenue by diverting a portion of money from the state’s use tax back to municipalities.

But Fouts argued that Warren stands to lose at least $400,000 this year and $10 million or more beginning in 2016, and he questioned the mechanism to replace the funding.

He said the lawsuit would target the “dishonest” language of the proposal, which called for “Approval or disapproval of amendatory act to reduce state use tax and replace with a local community stabilization share to modernize the tax system to help small businesses grow and create jobs.”

The proposal further claimed the act would “Require Local Community Stabilization Authority to provide revenue to local governments for local purposes, including police safety, fire protection, and ambulance emergency services,” and that it would “Increase portion of the state use tax dedicated for aid to local school districts.”

“That ballot proposal is not unbiased, and it’s not fair,” Fouts said. “It doesn’t say there will be another local tax. Nobody has the slightest clue what a local community stabilization share is, and it says to modernize the tax system. That’s a personal opinion.

 “You can’t have a ballot proposal that sounds like a propaganda piece. There’s absolutely no justification to say we’ll create jobs. That’s an advertisement. That’s a sales pitch. The key issue is truth in packaging,” Fouts said. “I’m doing this on behalf of the voters. I’m doing this on behalf of the entire election system. This should never, ever happen again.”

It remained unclear at press time who or what would be named and alleged in the lawsuit, but Fouts said he would direct Warren City Attorney David Griem to file legal action in the Michigan Court of Claims.

The mayor said state law is “crystal clear” in prohibiting “slanted ballot language.”

Proposal 1 had broad support ahead of the election from both Democratic and Republican leaders, including Michigan Gov. Rick Snyder, and was endorsed by officials from cities and towns across the state. The Michigan Municipal League urged its member communities to support the proposal and formed part of the coalition of Michigan Citizens for Safe & Strong Communities, which advocated its passage.

Sara Wurfel, the governor’s press secretary, didn’t address the lawsuit but said the proposal was approved by attorneys, received bipartisan backing and was overwhelmingly supported by the state’s voters.

“Bottom line is that this is a bipartisan proposal that creates a system that is fairer, doesn’t penalize companies for investing in the state and protects communities by providing them a stable revenue source to help provide essential services — all without raising taxes for Michiganders,” Wurfel said.

Fouts also said he would file a formal complaint about mailings he claimed were sent by state legislators at taxpayers’ expense, that expressed support for Proposal 1 but failed to include arguments against it.

“They broke state law governing fairness in franking privileges by legislators and should reimburse the state for that abuse,” Fouts stated in a press release announcing the lawsuit.