Do you remember the taxpayer revolt of the late 1970s and early 1980s? The economy had struggled through an extended period of low economic growth accompanied by inflation. Despite the recession, inflation caused taxes to rise: income taxes rose as taxpayers’ income, increased to account for inflation, knocked them into a higher bracket; property taxes rose sharply, following increasing real estate prices, as investors put their money into real estate to safeguard it from inflation.
Enraged and frustrated, taxpayers fought back. In California voters overwhelmingly approved a ballot measure permanently reducing property taxes. Legislators elected to Congress on tax cutting platforms passed a significant cut in the capital gains tax rate in August, 1981 and federal income tax cuts in 1981 and 1982.
In Michigan, voters approved tax limitation amendments to Article IX of the Michigan Constitution, with significant impacts on taxes, as well as state and local government revenue and spending:
- The State’s total revenue could not exceed 9.49 percent of personal income in Michigan;
- If the State mandated that local governments provide new or expanded programs, the state had to provide full funding;
- Local governments could not add new taxes, increase existing ones, or increase certain bonded indebtedness without securing approval of the voters;
- The state could not reduce the portion of its spending that goes to local governments below 41.61 percent, the level it was at when the amendment passed.
The spearhead of the campaign, Richard Headlee, was a highly-successful business and community leader. He served as President and CEO of several corporations, including Morbark Industries in Winn, Michigan, and Alexander Hamilton Life Insurance Company in Farmington Hills. Following on the successful adoption of the amendments – which were named for him – Headlee ran, unsuccessfully, for Governor in 1982. In 1992, he led another successful campaign to amend the Michigan Constitution, enacting term limits for elected officials.
Photo: Richard Headlee
To commemorate the City of Troy’s 60th Anniversary in 2015, we will publish a different story each day that highlights a person, discovery, or event that occurred locally, regionally, nationally, or even globally between 1955 and 2015 and that helped shape our lives and our community. We will try to post stories on important anniversary dates, but we also realize that dates are less critical than content and context. We will include the facts related to controversial stories, allowing our readers to form their own opinions. We invite you to read and comment on the stories. Your suggestions for topics are also welcome and can be posted on our Facebook page, www.facebook.com/TroyHistoricVillage. You can also email stories or ideas to the 365 Story Editor at email@example.com.