Over CRC’s 100 year history, it has made an outsized impact for such a small organization.  This is the sixth in a series of blog posts highlighting CRC’s top projects and reports since its inception in 1916.
The most striking aspect of 20 years of attempts to place tax and spending limitations in the Michigan Constitution is that, of 15 proposals that made it to the ballot, only two were approved by the voters.  CRC, with its policy of providing analysis of all statewide ballot issues, spent a considerable amount of time on these proposals and made countless public presentations to interested groups.
The Successful Proposals  
The two proposals approved by voters were:

• Proposal E of 1978 (“Headlee”). An initiated proposal advanced by Taxpayers United, a group headed by insurance executive Richard Headlee, Proposal E limited state revenues to a fixed percentage of state personal income, created new property tax limitations, and provided for state payments to local units to compensate for state mandates.
• Proposal A of 1994. Proposal A was a legislative proposal that provided for a dramatic shift of funding of school operations from the property tax to an increased sales tax, a modified acquisition value system for determining taxable property values, and differential taxation of business and homestead property. 

These two proposals were not adopted without problems.  The Headlee Amendment, as CRC later pointed out, was adopted at the peak of state revenue as a proportion of state personal income.  That proportion then began a long decline, so the Headlee Amendment had no effect on total state revenues.  Its requirement for state funding of mandates to local units has been a continuing source of contention between the state and its local units.  Its provision requiring a rollback of property tax rates in a jurisdiction when the growth of state equalized value exceeded the growth of the “General Price Level” (interpreted as the Consumer Price Index) probably had the greatest effect, especially after the adoption of Proposal A.
Proposal A resulted in a reduction in the funding gap between the highest and lowest school districts and an immediate reduction in property taxes.  But it also created significant inequities in taxable value of similarly situated properties, depending on the timing of their acquisition.  It also controlled the growth of taxable values, but did not control their decline, meaning that local units would lose value during downturns that would take decades to restore during recoveries.  Property tax limitation was magnified by the interplay between the Headlee Amendment, which limited property tax growth of an entire jurisdiction and Proposal A, which limited growth of individual parcels of property.
Thirteen Unsuccessful Proposals  
The unsuccessful proposals were in three categories:

• Tax Growth Limitation. The Headlee Amendment and Proposal C of 1976 were intended to slow the growth of taxing and spending.
• Tax Shift. Nine proposals, five by the legislature and four by initiative petition were intended to shift taxation from the property tax to another source of funding.  These were the conceptual forebears of Proposal A.  In fact, there were Proposal As that failed in 1992 and 1993 that would have done much the same thing as the successful one in 1994.
• Tax Reduction. Three proposals, all initiated, would have resulted in significant tax reductions and, while tax increases would have been technically possible, they would have been very difficult.