Michigan Tax: Services tax finds support in new poll

By Amy Lane, 30 May 2010, LANSING — The idea of extending Michigan's sales tax to consumer services finds some receptivity in Southeast Michigan, a new poll shows.

The issue was one of two questions asked exclusively for Crain's as part of a quarterly survey done by The Rossman Group, The Perricone Group and Denno-Noor Research.

It found 45 percent of those polled support, and 41 percent oppose, a restructuring plan that includes lowering the 6 percent sales tax to 5.5 percent and extending it to consumer services.

Gov. Granholm proposed the plan to increase school revenue and provide business tax relief.

"The public isn't as opposed to tackling this as we might have thought," said Mark Pischea, president of The Rossman Group.

"The assumption has been that because of the economy, we're dealing with a population in Michigan that is unwilling to pay more in taxes. This data suggests that there certainly is an appetite in reforming the way taxes are assessed, particularly on businesses. And I think we're seeing a public that's starting to get softened up a little bit."

The firms polled 600 likely voters in Wayne, Oakland and Macomb counties. The second-quarter survey targeted issues around the Detroit Regional Chamber's Mackinac Policy Conference, which begins Wednesday on Mackinac Island.

Overall survey results will be released this week on topics including the governor's race, the impact of federal health care reform and Detroit Mayor Dave Bing's performance.

On the service tax plan, 73.2 percent of voters described as strong Democrats were in support, compared with 11 percent of strong Republicans.

While the "partisan differential on tax issues" is typical, "what ends up driving the overall number in this case ... is when you look at the independent voters," Pischea said.

In that group, 52.4 percent were in support.

A poll released in May produced different results.

The April survey commissioned by the Michigan Chamber of Commerce and the Michigan Association of Realtors found strong opposition to expanding the sales tax to services.

The poll conducted by Public Opinion Strategies of Alexandria, Va., found that 54 percent generally opposed lowering the sales tax from 6 percent to 5.5 percent and extending the tax to consumer services, while 36 percent favored the idea.

When told which services could be covered — such as accounting, haircuts, law, child care and landscaping — opposition grew to 71 percent and support fell to 26 percent.

Seventy-seven percent of Republicans and 74 percent of independent voters were opposed, as were 60 percent of Democrats.

Overall, the poll showed 75 percent opposed to taxing services, and 21 percent in support.

The survey questions did not discuss proposed uses for the revenue that would be raised.

The nonpartisan Center for Michigan, in community meetings it conducted around the state, has found support for tax reforms that include broadened sales/use/consumption taxes and business tax cuts.

Another Crain's polling question involved Proposal 1 — the question on this November's ballot of whether to convene delegates to revise the state constitution.

Asked whether Michigan needs a constitutional convention, and given arguments for and against a con-con, 40 percent of those surveyed said "no" and 38 percent said "yes."

Democrats were more favorable than Republicans, but a majority of independent voters did not think it was a good idea. Nearly 48 percent of independents opposed the idea, while 34 percent supported it.

Oakland County voters generally split, while opposition overtook support in Wayne and Macomb. Detroit voters were 47 percent in favor and 24 percent opposed.