The results presented above represent the best estimates, based on reasonably conservative assumptions. These assumptions will certainly not accurately predict all the variables used in the model. However, sensitivity analyses, or "what if?" tests give some indication of how the results would change if the assumptions were changed.

Assessment Lag in 1994 (SB 146)

The consensus government agency estimates of tax relief under "A" include the effects of Senate Bill 146, which would introduce a one-year delay in assessing property in 1994. An estimate of the additional tax relief under SB 146, on top of the net tax savings under "A," is about $440 million.[27]

Federal Deductibility and Tourist Taxes

For the reasons discussed above, page 17, the revenue analysis did not include federal tax effects. A rough estimate of the effect of federal income tax deductions, under the current federal income tax code, would be about $185 million in additional federal taxes per year.[28] If the common, although unsupported, assumption that tourists pay 5-10% of Michigan sales and use taxes is correct, then non-Michigan residents would account for around $90 to $180 million in additional sales tax revenue. Neither of these estimates are as reliable as those included inthe revenue analysis in the model, and the fact that they roughly offset each other is another reason for excluding both.

School Millage Rates

The level of school millage rates is a critical assumption under "A." The analysis relies on the Treasury Department calculations, based on their large database and proposed implementation legislation, in assuming an average school millage rate of 22 in the current year under "A." As a conservative assumption, the model assumes that school millage rates grow 50% faster under "A" than under current law for the next few years.

To estimate the effect of higher school millage rates, the entire model was re-calculated using an average school millage rate one mill higher. The effect was to reduce net taxpayer savings by about $140 million per year. The same exercise, using a reduction in the average millage rate of one-half mill, produced additional taxpayer savings of about $75 million per year.