Governor Snyder presented the FY2019 state budget to a joint hearing of the House and Senate Appropriations committees Wednesday morning.  Matching his tone following January’s consensus revenue estimating conference and his comments about spending restraint during the recent State of the State address, the budget didn’t offer many surprises.

The key announcement for League members centered on his proposal for revenue sharing.

Constitutional revenue sharing payments are expected to grow, based upon sales tax growth, to the tune of 3.1% ($24.7 M) in the coming budget.

The Governor did not recommend a continuation of the 2.5% statutory revenue sharing increase that we were able to secure in the current budget, taking this $243 million appropriation back down to a level that has been flat over the previous four years.

Instead of increasing statutory revenue sharing through the traditional budget process, the Governor is building off of his comments from last year’s budget on the distribution of excess Personal Property Tax reimbursements.  The Governor has called for a simpler and fairer approach to the distribution of those excess reimbursements and emphasized the need to continue providing that support to local units of government.

His recommendation would maintain the apportion of PPT reimbursement revenue going to each type of local unit of government and have that revenue instead distributed by the Local Community Stabilization Authority to communities as an additional revenue sharing payment.  This would amount to a $73 million revenue sharing distribution to cities and villages.

Additionally, the Governor is proposing to use the excess reimbursement dollars that had gone to libraries and miscellaneous authorities to preserve and increase fire protection grant funding to local units with qualifying state or higher education facilities.

Other line items or programs of interest to local units of government included:

Adding $175M of one-time General Fund to go with the $150M already scheduled to go into roads as part of the previous road funding pkg

Adding $2M to continue and expand Project Rising Tide

Building in the $79M from his previously proposed solid waste tipping fee increase to support brownfield site contamination cleanups, water and beach monitoring and other environmental programs that had previously been supported by the former Clean MI Initiative bond proceeds.

The budget will now be reviewed by each chamber over the coming weeks, with initial action expected prior to the Spring/Easter Break.

For more details on today’s budget announcement –

PowerPoint Presentation – (slide 24 relates to revenue sharing/PPT excess)

Issue Papers –  pages 31-32 detail the revenue sharing/PPT proposal

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