Governor Announces Budget Plan-Revenue Sharing Flat Again

Governor Snyder released his budget recommendation for the upcoming Fiscal Year (2016-17) and as expected spent much of his focus on infrastructure and education.  His narrative for the nearly $55 billion spending plan centered on the Flint water crisis and proposals for Detroit Public Schools, as well as the first look at implementing the recently passed road funding package.

Of particular interest to the League was the lack of restoration of funding to statutory revenue sharing.  For the second year in a row, the Governor proposes keeping City, Village and Township Revenue Sharing payments flat at a total of $243 million.  Constitutional revenue sharing payments are estimated to grow by 3.9%, coinciding with an expected growth in sales tax revenue, by $29.4 million to a total of $781.5 million.  It should be noted that the expected 3.1% sales tax growth for the current budget year has gone unrealized so far, with current year Constitutional payments running flat with what communities received during the 2014-15 fiscal year.  Much of the blame for these unmet estimates can be tied to lower gas prices, something that does not look to change in the near future.  The upcoming May Revenue Estimating Conference should be very revealing as to whether the 3.9% growth estimate will ever be realized.  The League will continue to push towards a restoration of the cuts of the past decade for our member communities.  In an overall budget that sees increases being offered to nearly every State Department, it is truly disappointing that Revenue Sharing is being overlooked yet again.

On a positive note, the League was successful in securing a change in the accountability and transparency certification requirements to be eligible for the CVTRS payment.  New language that we suggested to the Budget Office would allow for a community that misses the December 1 certification deadline to be eligible to have any missed payment restored as long as the certification is complete by April 1.

The full budget will now be considered by the House and Senate Appropriations subcommittees, with hearings scheduled throughout the coming weeks and initial action expected prior to the Legislature’s spring recess.  It is expected that the Legislature will attempt to finalize the budget by early June.

Chris Hackbarth is the League’s director of state affairs. He can be reached at 517-908-0304and chackbarth@mml.org.