LANSING - Less than 24 hours after sealing a deal with lawmakers on a new business tax, Gov. Jennifer Granholm was calling House Democrats on Thursday to muster support for new taxes to balance next year's budget.
One option - a possible 6% sales tax on sports, music, movie and other entertainment tickets - has galvanized opposition by a group of power hitters that includes the owners of Detroit's major sports teams and concert venues.
Fans Against Ticket Taxes launched its campaign Thursday, led by Mike Ilitch, who owns the Detroit Tigers and Red Wings and the Fox Theatre, and Bill Davidson, who owns the Pistons and operates three of the biggest concert venues: DTE Energy Music Theatre, the Palace of Auburn Hills and Meadow Brook Music Festival.
At the Tigers' Thursday afternoon game, Comerica Park staffers handed out flyers urging fans to visit a Web site - www.NoTicketTax.com - and contact their state representatives.
The campaign illustrates the political peril of a steep tax increase, which many lawmakers say is unavoidable given a $1.8-billion deficit the state faces in the 2008 fiscal year, which starts Oct. 1.
Unless they make politically unpalatable cuts to the state's most expensive services - public schools, Medicaid, prisons and universities - a tax increase may be a foregone conclusion, though how much of one remains to be seen.
One discussed scenario is to tax entertainment and raise Michigan's 3.9% income tax. The sales tax also might be expanded to include a limited list of services such as landscaping, janitorial, storage facilities and fitness clubs.
Granholm has endorsed the idea of a combined tax increase, and lawmakers have quietly shared ideas, including an expanded sales tax plan that would raise almost $1 billion in additional revenue.
In metro Detroit, where sports and music are deeply woven into the cultural fabric, the ticket tax proposal could provoke the most ire.
"It's very much a tax on our culture, on what all metro Detroiters have grown up doing," said Roger Martin, a Lansing public relations specialist who represents the Davidson family's Palace Sports & Entertainment. "This is what Detroiters do - we go to a ballgame with our grandpa, we introduce our kids to music. It's how we play here."
The antitax blitz has united an array of players, including national entertainment companies Live Nation and Ticketmaster. Besides Detroit's Lions, Tigers, Pistons and Red Wings, the campaign is backed by minor league baseball and hockey teams in Lansing, Kalamazoo and Grand Rapids.
Opponents say the levy could dampen ticket sales in a concert market already beset by economic woes, perhaps even steering some touring performers away from Michigan. They also say the tax would unfairly burden metro Detroit, far and away the state's biggest concert and sports market.
Details on collection methods remain unclear. In some states with such taxes, the levy is folded into ticket prices, to be calculated by the promoter or team and paid to the state after an event.
Michigan would become one of several states that tax sports and entertainment tickets. Ohio, Indiana and Illinois do not have such a tax.
Opposition to an entertainment tax has quietly gelled in the past several months, said Rick Franks, who heads the Detroit office of Live Nation, the country's biggest concert promoter. He said taxing concert tickets would make Michigan a less friendly venue.
"We fight too hard to get tours to come here right now as it is," said Franks, who books concerts at venues such as the Palace of Auburn Hills and DTE Energy Music Theatre. "This won't help me bring bands to Michigan."
For Granholm and the Legislature, raising the income tax would be no less controversial.
An antitax organization already is threatening recall campaigns against lawmakers who vote to raise taxes, especially the income tax.
For a taxpayer with a taxable income of $40,000, raising the income tax by a half percentage point to 4.4% would cost $200 a year more. Those with a taxable income of $15,000 would pay $75 more.
Action on a tax plan for 2008 could come in a week or two, said Rep. Michael Sak, D-Grand Rapids, who is second-in-rank to the House speaker. Sak said without a firm grip on revenue for next year, the Legislature can't approve a budget.
"The consensus is there is definitely a need for some source of revenue for our state," Sak said, though he would not divulge details.
House Democrats likely will take the lead on a tax increase, and they hope to convince enough Republicans to go along to sell it as a bipartisan agreement.
Sen. Mark Jansen, R-Gaines Township, who was among those who negotiated the new business tax agreement, said Republicans will insist on spending changes, such as reducing the cost of public employee health and pension benefits - which Granholm has said she will support.
"We have to ask ourselves, are we willing to raise taxes to the tune of $1 billion?" Jansen said. "Many would say go up to $1.5 billion; many would say zero. Probably the middle is where you're going to end up."
Jansen said along with the new business tax proposal, next year's budget and taxes will be a milestone for Michigan.
"I think 2007 will be an historic year," he said. "We're going to define what Michigan will look like for the next generation in terms of taxes and what kind of place the state will be."
Contact CHRIS CHRISTOFF at 517-372-8660.
Copyright © 2007 Detroit Free Press Inc.
BY CHRIS CHRISTOFF and BRIAN McCOLLUM FREE PRESS STAFF WRITERSIn your voice
