LANSING (AP) - Dick DeVos wants to get rid of Michigan's personal property tax, but he'd find a way to replace most of the money schools and local governments now get from it, a campaign spokesman said yesterday.

DeVos' declaration that he'd eliminate the tax, made Tuesday night during his second debate with Democratic Gov. Jennifer Granholm, thrilled a manufacturers' group but left education and local government organizations worried.

The Republican businessman doesn't yet have a plan for how he would make up the $1.75 billion lost, campaign spokesman John Truscott said. He'd have to work that out with lawmakers, possibly as part of a larger restructuring of the state's main corporate tax.

"We realize where that money goes," Truscott said of the personal property tax. "For the most part . whether it's local governments or schools, we need to preserve as much money as possible for them."

Last year, Granholm and state legislators worked out a deal that gave businesses a 15 percent Single Business Tax credit on their personal property taxes. That credit saves companies - mainly large manufacturers - about $115 million a year, all money that otherwise would go to the state treasury.

But Granholm doesn't support doing away with the personal property tax. She said DeVos' proposal was reckless fiscal policy.

Businesses pay the personal property tax on equipment ranging from laptop computers to towering presses and stamping machines. They also send to local governments property taxes and the state education tax.

This year, those taxes are expected to raise $767 million for the school aid fund, $916 million for local governments and community colleges and $70 million for the state's general fund, according to Scott Schrager, special assistant to state Treasurer Robert Kleine.

Summer Minnick of the Michigan Municipal League says the tax accounts for a quarter or a fifth of many communities' total tax revenue. In some, one in every three dollars comes from the tax.

"Our communities already operate with a fiscal noose around their necks. Just blindly eliminating the personal property tax would be like kicking the chair out from under them," she said.

As examples, Minnick said the tax brings in about $6.5 million for the city of Midland, or about 18 percent of its budget. In some Wayne County communities, the tax accounts for 20 percent to 35 percent of local budgets.

The tax also accounts for about 6 percent of the revenue going to the nearly $13 billion school aid fund, which this year is ensuring schools get at least $7,085 per pupil.

Chuck Hadden of the Michigan Manufacturers Association said getting rid of the personal property tax would encourage companies to do more business in Michigan.

"We believe it's a detriment to placing plants here, and to the plants to make an investment here," he said.

But Hadden also said much of the tax revenue will have to be collected in some other form if local services are to be maintained.

"My members come from company towns, so they understand if we start talking elimination of the personal property tax, then the first call the CEO gets is from the mayor saying, `I can't have fire protection for you,'" Hadden said.

DeVos already is on record supporting the repeal of the Single Business Tax by the end of 2007. That tax brings in $1.9 billion annually. DeVos has said he'd replace about half of the SBT revenue with a business tax but has not said what that tax would look like or what he would cut to make up for the rest.

Granholm has said the state needs to replace all of the $1.9 billion or face deep cuts to education, health care and other services.

"His proposal to replace only half of the SBT would force deep cuts in health care and education, would be kicking grandparents off of health care, would force us to ... (open) the doors of prisons," said Jenna Gent of the Granholm campaign. "Eliminating an additional corporate tax is only going to make that hole deeper."

Truscott said the money isn't going to all go away. But he said it's time to do something about both the SBT and the personal property tax so more companies will want to be in Michigan.

Although many states still collect a personal property tax, most of Michigan's neighbors either don't have it, are phasing it out or don't have it apply to machinery and equipment.

"Michigan's (economic) crisis has deepened considerably," Truscott said. "Dick's always been a believer, if you're in a crisis, deal with all your problems at once."