September 23rd Deadline For Certification Related to August Revenue Sharing Swap

Late Friday afternoon, the Michigan Department of Treasury released their guidance and reporting packet related to the $150 million of federal CARES Act funding that was appropriated to local governments in place of the $97 million that was cut from statutory revenue sharing payments due to the elimination of the August 2020 CVTRS payment.  This budget cut and the related federal CARES funding appropriation does not impact any local unit’s Constitutional Revenue Sharing payment.  Municipalities should have received their Constitutional payments and these separate federal CARES distributions at the end of August.

The federal funding was apportioned to provide approximately 150% of what local unit would have received in their normal August CVTRS distribution and have specific expenditure restrictions dictated by the enacting federal legislation.  The Michigan Municipal League continues to urge Congressional leaders and Michigan’s congressional delegation to provide flexibility to these existing dollars and to appropriate additional direct, flexible support to all of Michigan’s local governments.  Please continue talking with your Member of Congress about the need to increase flexibility for these dollars to ensure their effectiveness and fiscal relief.

The federal funds appropriated in place of the August CVTRS payments have a certification report due to the Michigan Department of Treasury by September 23rd, followed by subsequent reporting deadlines identified by Treasury in the guidance packet.

The following is the notice that Treasury sent out on Friday…

Due to the FY 2020 budget cuts, the August payments for the City, Village, and Township Revenue Sharing (CVTRS), County Revenue Sharing (CRS) and County Incentive Program (CIP) were eliminated.  Local units did not receive these payments in August. 

However all cities, villages, townships and counties that were eligible to receive an August 2020 CVTRS, CRS or CIP payment received a Coronavirus Relief Local Government Grants (CRLGG) Program payment on August 31, 2020.  This payment is not a replacement for the revenue sharing payments eliminated in August, and can only be used for CARES Act eligible expenditures.

Local units must review the CRLGG & Coronavirus Relief Fund (CRF) Grant Requirements document and submit the CRLGG Grant Opening Certification, to the Michigan Department of Treasury by 11:59 p.m. EST on September 23, 2020 in order for the local unit to accept the CRLGG funds received.  The CRLGG Grant Opening Certification must be signed by the qualified local unit’s chief administrative officer. CRLGG Grant Opening Certifications can be returned to the Michigan Department of Treasury via email at Treas-CARES@michigan.gov or fax to 517-335-3298.

If a local unit does not submit a completed and signed CRLGG Grant Opening Certification, the local unit will be required to return the CRLGG funding received by September 30, 2020 using Form 5733 – CRLGG Return of Funds Received. Form 5733 will be located on the CRLGG website early next week.

If you have any questions, let us know.

Revenue Sharing and Grants Division – Michigan Department of Treasury

517-335-0155

 

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

Whitmer Administration Pitches FY21 Budget Proposal

In addition to the League’s official media statement in response to the Governor’s budget presentation yesterday, here are some of the more critical details for League member communities:

The Governor’s Fiscal Year 2020-21 budget utilizes $11 billion in General Fund dollars, just barely higher than the $10.7 billion spent in the 2000 state budget.  Overall this budget proposal would spend nearly $62 billion from all sources, up almost 4% from the current budget year.  With limited new revenue to spend and the ongoing debate over road funding, the Governor focused most of her new programming proposals on the K12 education budget and talent/job training programs.

Constitutional Revenue Sharing payments are estimated to increase by 1.9% ($16.4M) over current year directly tied to expected sales tax revenue growth.  These dollars are distributed to all CVTs on a straight per capita basis.

Statutory Revenue Sharing payments are proposed to increase by 2.5% ($6.5M).  These dollars would flow in direct proportion to what eligible CVTs received in this current budget.

A new grant program that would allocate $40M in one-time dollars for planning and infrastructure improvements that would address municipal impacts from climate and high-water erosion concerns ($10M for local government planning and $30M for infrastructure projects).  Planning grants will be limited to a $200,000 maximum per award and infrastructure grants limited to no more than $2.5M per award.  A 20% local match will be required.

A new Rapid Environmental Contamination Response program is being proposed that would be funded with $20M to deal with initial abatement activities at contaminated properties.

While the MDOT budget proposal does not reflect any of the revenue related to the Governor’s proposed $3.5B bonding proposal for state trunkline roads, it does include about $200M more than the current year budget, with $132M of that amount coming from the final phase of the General Fund earmark diversion from the 2015 road funding package and nearly $50M in expected increased federal highway revenues.  Transit and rail programs are also proposed to receive an additional $30M under the Governor’s budget proposal.

The Community Revitalization and Business Attraction program at MEDC would see their line item returned to prior year funding levels ($100M) following the current year’s $20+M reduction.

An additional $36.5M is recommended to continue funding local court system costs for indigent defense commission standard requirements.

The budget proposal also calls for a supplemental/current year appropriation of $14M to fund local clerk expenses related to the upcoming March Presidential Primary election.

Copies of the Governor’s Executive Budget Proposal can be downloaded here.  Specific proposal briefing papers and copies of the proposed budget bills can be viewed on the State Budget Office webpage here.

Now that the Governor’s budget has been presented, the House and Senate Appropriations committees will begin their review of the overall budget and each individual department starting next week.  The Senate General Government budget subcommittee is already scheduled to begin reviewing the budget that houses revenue sharing on February 12th.  Legislative review and deliberation will occur through the spring break period, with the May Consensus Revenue Estimating Conference serving as the final benchmark in the process before legislative leaders and the Governor sit down to hammer out final details in an effort to complete the budget prior to the new July 1st deadline.

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

Treasury Announces Grants for Financially Distressed Communities

The Michigan Department of Treasury opened the application process today for this fiscal year’s financially distressed city, village, and township grant program.  Details from Treasury’s announcement are provided below:

Treasury: Grants Available for Financially Distressed Cities, Villages and Townships

Money for Special Projects to Free Up Funds for Important Services

LANSING, Mich. – Cities, villages and townships experiencing financial struggles can now apply for a grant to help fund special projects and free up tax dollars for important services, according to the Michigan Department of Treasury (Treasury).

Applications are now being accepted for the Financially Distressed Cities, Villages, and Townships (FDCVT) grant program. Municipalities interested in applying for an award must submit applications to the state Treasury Department by 11:59 p.m. on Thursday, Jan. 2, 2020.

All cities, villages and townships experiencing at least one condition of “probable financial distress,” as outlined in the Local Financial Stability and Choice Act, are eligible to apply for up to $2 million. A total of $2.5 million in funding is available for Treasury to award through the FDCVT grant program for the 2020 fiscal year.

Grant funding may be used to pay for specific projects or services that move a community toward financial stability. Preference will be given to applications from municipalities that meet one or more of the following criteria:

  • A financial emergency has been declared in the past 10 years.
  • An approved deficit elimination plan for the General Fund is currently in place.
  • Two or more conditions indicating “probable financial distress” currently exist.
  • The fund balance of the General Fund has been declining over the past five years and the fund balance is less than 3 percent of the General Fund revenues.

Due to requirements outlined under state law, school districts are not eligible for funds from this grant program.

For more information about the FDCVT grant program or to download an application, go to www.michigan.gov/revenuesharing.

 

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

State Budget Battle Goes Into Overtime

As expected, following the Legislature’s movement of budget bills that the Administration had not signed off on, Governor Whitmer responded aggressively to the legislative spending proposal by issuing 147 separate line items vetoes within the 16 departmental budget bills she signed.  Signing the bills allowed her to avoid a state government shutdown, while the nearly $950 million in spending cuts across all but two of the budgets served notice to legislative leaders of the need to return to the negotiating table.  Following the release of the vetoes, the State Administrative Board met today, on the first day of the new fiscal year, and utilized an obscure legal procedure that allowed the Governor to shift nearly $625 million additional dollars to different lines/programs from those newly appropriated, original line items within 13 different department budgets.

The following budget programs/line items may be of interest to League members:

  • Revenue sharing – Constitutional payments are dictated by sales tax growth which is expected to increase by about 1.7% over current year ($14.2 million) – Statutory revenue sharing payments received an increase of 2.3% for $5.8 million matching the House’s recommendation from earlier this spring and only slightly less than the Governor’s original 3% increase proposal.
    • Additionally, all statutory revenue sharing payments have been rolled into the base appropriation – no more “one-time” or supplemental grants
  • The $1 million new line item for local assessor training grants resulting from last fall’s assessing reform legislation was vetoed by the Governor
  • More than $27 million of local payments in lieu of taxes for Commercial Forest, Purchased Lands, and Swamp & Tax Reverted Lands was vetoed by the Governor
  • Numerous Treasury Local Government Program lines totaling nearly $5 million were shifted and rolled up into one line as a result of State Ad Board actions.
  • MEDC/MSHDA –
    • The Governor shifted $500,000 for blight removal grants ($250,000 rural blight elimination & $250,000 city of Detroit projects performed by nonprofits) along with four other line items totaling over $9 million and transferred those funds into workforce development programs.
    • The Legislature reduced the Business Attraction & Community Revitalization by $26 million ($105.4 million to $89.4 million) with $10 million of the reduction redirected to the new Rural Jobs and Capital Investment Fund that was created last fall.  The Governor vetoed this $10 million redirection.
    • Community Development Block Grants were funded at $47 million, same as previous year
    • The Legislature increased Pure MI funding to $37.5 million (an additional $1.5 million).  The Governor vetoed the entire line.
  • EGLE –
    • $120 million for water infrastructure was appropriated, matching closely to Gov Whitmer’s original budget proposal for clean water projects
      • $30,0000 for Lead and Copper Rule implementation
      • $40,000,000 for PFAS and emerging contaminants
      • $35,000,000 for Drinking Water Revolving Fund loan forgiveness
      • $7,500,000 for affordability and planning
      • $7,500,000 for private well testing – the Governor shifted these dollars into the Lead and Copper Rule implementation line item through State Ad Board action
    • Surface water grants to watershed councils ($675k), Cooperative lakes monitoring program ($150k), and PFAS and emerging contaminates grants to municipal airports ($15m) were among the EGLE line items vetoed by the Governor.
  • LARA –
    • $80 million in MI Indigent Defense Commission grants were continued for the coming year – slight reductions to reflect one-time costs from first year being removed
    • No line item vetoes in this budget, but a number of lines were shifted through State Ad Board action to allow greater spending flexibility by the Department
  • State Police –
    • The Governor vetoed the entire $13 million Secondary Road Patrol program line item.
    • The $654,000 Local Law Enforcement Agency Training Grants line item and MI International Speedway traffic control support ($600,000) were vetoed by the Governor.
    • Through State Ad Board action, the Governor also shifted more than $2 million from a proposed new Trooper School into the Forensic Science line and another $2 million from the First responder communication network line item into an In-car camera video streaming network line item.
  • MDOT –
    • The Legislature included $400 million in GF ($132 million to fully implement the 2015 package one year early, $175 million for roads, $25 million for the Local Bridge programs, $68 million for special projects include specific bridges that Governor Whitmer visited during summer press events). This does not include an addition $468M in earmarked income tax revenue that is a result of the 2015 package. When combined, $868M in non-user fee revenue was proposed to go to roads.  The Governor vetoed $375 million of this GF addition and then shifted the remaining $25 million into transit programs, with an additional $6 million each for Local Bus Operating and Public Transportation Development Service Initiatives, and $13 million sent to the Transit capital – urban line item.
    • The Legislature included $1 million for demolition of the Carbide dock as part of the Soo Locks project which the Governor shifted through the State Ad Board, along with $600,000 from the Marine passenger service line item over to the Intercity Passenger Services line item for a combined addition to that line of $1.6 million.
    • The Governor also used the State Ad Board to shift nearly $40 million from the Rail freight and rail economic development line over to the Rail passenger service line item.

Numerous other legislative priorities were vetoed or redirected by the Governor today, prompting strong reactions on both sides of the political aisle.  The Governor has called for a Thursday meeting of the four “quadrant” caucus leaders to get back to the budget negotiating table.  It remains to be seen how closely the Governor will tie further budget negotiations to a resumption of long term road funding discussions.

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

Revenue Sharing Budget Hearing Scheduled – Contact Your Legislator

The legislature is moving forward with the budget process, despite not having an agreement in place with the Governor on final spending for each department for the 2019-20 fiscal year set to begin on October 1st.  Last week, the conference committees for K12 spending, higher education, community colleges, EGLE and Natural Resources, and State Police were all sent to the floor where they await a final vote by each chamber.  Ten additional budget conference committees are scheduled for Thursday this week, including the conference committees for MDOT and General Government, which includes revenue sharing.

The Governor has threatened to veto any budget bills that reach her desk without an overall budget agreement in place.

The Governor had proposed a 3% increase to statutory revenue sharing earlier this year.  During initial legislative action on the budgets this spring, the Senate version left revenue sharing flat at current year levels, while the House budget version increased revenue sharing by 2.3%.  With the continued disagreement between the legislature and administration, it is not known at this point how much general fund revenue will be available for revenue sharing in this week’s legislative budget proposal.

League members are urged to contact their House and Senate legislators to request that any budget produced by the Legislature reverse the trend of the past decade and begin reinvesting in revenue sharing and the communities in each of their districts.

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

Governor Whitmer Announces Budget Plans & Revenue Sharing Increase

Governor Gretchen Whitmer will talk about her budget plan at the MML’s 2019 Capital Conference March 19-20.

Governor Whitmer and State Budget Director Chris Kolb appeared before a joint hearing of the House and Senate Appropriations committees this morning to release her Administration’s budget plans for the upcoming fiscal year. We expect the governor to talk about her budget plan when she comes to the League’s Capital Conference March 19-20. She’ll be speaking during our opening general session on the 19th. Don’t miss this unique opportunity to hear from the governor first-hand. Learn more about that here.

As expected, her budget outlined the key initiatives that the Governor had touted during her election campaign last year…road funding, education, and water infrastructure.  Additionally, within the overall budget, the Governor is recommending a 3% increase in statutory revenue sharing ($7.7M), in addition to the estimated 3.2% increase in Constitutional Revenue Sharing payments ($27.5M) that will occur as a result of expected growth in sales tax revenues.

This increase in revenue sharing is also coupled with a $5 million grant fund to support local projects targeting infrastructure, public safety, blight removal and other community revitalization efforts.

In order to accomplish the Governor’s goal of getting 90% of state roads to good or fair condition within 10 years, she is proposing a .45 cent gas tax increase phased in at .15 cents per phase between October of 2019 and October of 2020.  This proposal brings in $2.5 billion in new dedicated road funding.  The existing .26 cent gas tax would continue to be distributed through the PA 51 formula, while this new .45 cent increase would be distributed through a new formula that focuses on economically significant roads (91% directed to interstates, state trunklines, principal arterial roads, and minor arterials and major collector streets).  Transit, bridges and rural roads make up remainder of the distributions under this new formula proposal.

Under the existing road funding proposal, the planned $600 million income tax/General Fund diversion to roads would be eliminated and those GF/GP dollars would be freed up to be used to fund higher education appropriations that are being supported currently within the school aid budget.

The additional gas tax burden on Michigan residents would be off-set through a proposed repeal of the 2011 “pension tax” and a doubling of the Earned Income Tax Credit.  These two tax relief proposals would be phased in to match the proposed gas tax phase-in and would reduce GF/GP revenues by about $450 million per year.

The budget impact from this tax relief would be partially off-set by a proposed expansion of the state’s Corporate Income Tax to apply that tax to current pass-through business entities.  This expansion would bring in about $280 million in GF/GP revenue per year.

For school funding, the Governor is proposing to increase education spending by approximately $500 million.  The main component of the proposed increase would go to a Foundation Allowance increase of between $120 and $180 per pupil.  The School Aid increase is possible due to the shift of higher education budget support back to GF/GP, as outlined above in the road funding proposal.

Water infrastructure spending will see a $120 million increase within what was announced today.  Approximately $37.5 million would be dedicated to support lead and copper rule implementation expenses for local water systems.  The proposal also calls for $30 million for PFAS and other contaminate clean-ups and $40 million for Drinking Water Revolving Fund loan forgiveness for local water systems.

Additional specifics from today’s budget announcement can be found on the State Budget website here.

Governor Whitmer’s budget presentation slides and the State Budget Director’s presentation can be viewed here.

A statement about the budget from League CEO and Executive Director Dan Gilmartin can be found here.

Specific program white paper analyses can be found here covering the roads proposal, tax proposals, water initiatives, K-12 program spending, and higher education.

Both House and Senate Appropriations committees and the various departmental subcommittees will now begin their review of the Governor’s proposal and begin their individual departmental and program budget development over the next two months with an eye toward completing the FY2020 budget before the summer recess.

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

Legislature Wraps Up Action on State Budget

Late this afternoon, both chambers completed action on the state’s omnibus budget bill for the coming fiscal year.  Senate Bill 848 combined each of the departmental conference reports that had been approved over the course of the past week.  Included in this omnibus bill are numerous line items or programs of interest to municipalities:

General Government/Revenue Sharing:

  • The budget maintains $6.2 million in supplemental revenue sharing payments that cities and villages received as an increase in the current year budget.  The Governor had originally proposed removing this increase entirely and the House budget chair worked to ensure these dollars remained in the upcoming budget.  Additionally, $5.8 million that has been included in recent budgets to bring 100 townships and one city back into the statutory distribution was also continued in this budget.  Counties maintained their current year appropriation level and then were given an additional $1 million in supplemental funding.  Both our $6.2 million and the county $1 million supplemental amounts were written with boilerplate language that ties those dollars to pension, OPEB, or general debt expenses, unless the local unit has no such expenses.
  • This budget also reduces the payment threshold for local units to qualify for a statutory revenue sharing payment.  Under current law, only communities eligible for payments in excess of $4500 would receive a CVT revenue sharing payment, this budget allows payments to go out to any community eligible for at least $1000, resulting in about 48 additional villages and townships being eligible for a statutory payment.
  • Constitutional revenue sharing payments are expected to rise, based upon economic activity related to the sales tax.  An additional $21.5 million (2.6% increase) is expected to flow to Constitutional payments in the coming budget, subject to actual collections.
  • The Governor’s proposal to distribute any remaining Personal Property Tax funds left after all units have received 100% reimbursements as an additional revenue sharing payment (approximately $70 million) was not included in the final budget agreement.  These PPT reimbursement dollars will continue to be distributed in the same manner as the past two years, but will only be available to cities, villages, townships, counties, and community colleges (see LARA budget summary below).
  • A new boilerplate section within the Treasury budget (Section 940) calls for the department to investigate the cost of having residents file their Principal Residence Exemption forms directly with the state as opposed to the local unit.
  • Regional Prosperity grants were increased by $1.5 million.

MDOT Budget:

  • Following the positive economic and revenue news the state received during last month’s Consensus Revenue Estimating Conference,  $300 million in additional General Fund (one-time) is being added to this budget.  This addition will provide  $65.4 million more to city and village road budgets.
  • $150 million of new money is expected due to the road funding package.  This increase combined with growth in gas tax and registration fees will result in $43.4 million new dollars for cities and villages.
  • Between these two additions, $108.8 million more will be available for city and villages roads in the coming budget.
  • A new Community Service Infrastructure Fund has been created within the Transportation Economic Development Fund (TEDF) providing $3 million in on-going funding. This fund will provide matching grants of up to $250,000 for construction and preservation of streets in cities and villages with a population less than 10,000.  Additional legislation will be required to implement this new grant program.
  • The budget includes $2 million for a rail project, repairing the line from Ann Arbor to Traverse City. (one-time funding)
  • A $1.5 million increase in local bus operating funding was also provided.

LARA budget:

  • This budget provides nearly full funding of the $84+ million of indigent defense commission plan costs for locals that serve as court funding units.  This appropriation represents a significant increase from the Governor’s original $46 million reimbursement proposal.  Also dropped from the Governor’s original plan was his proposal to charge court funding units a per capita amount as part of their local cost share.  This concept was dropped completely by the Legislature.  Boilerplate associated with the $84 million in grants specifies that local indigent defense systems are not required to implement or maintain standards if sufficient funding is not provided through grants as described in the Act.  Additional changes relative to indigent defense commission plan implementation were adopted as part of HB 5985 earlier today.
  • Traditionally, the LARA budget has also included a line item for fire protection grants to local units that host certain state facilities (approx $10 million in FY18).  Due to the elimination of Driver Responsibility Fee revenue, this grant program is no longer funded through the LARA budget.  Going forward, these grants will be supported by a segment of Personal Property Tax funds remaining after all eligible local unit reimbursements have gone out at 100%.  HB 5908 was passed out of the Senate today with language funding fire protection grants at $13.6 million.  While the earmarked amount is less than the Governor’s original $15 million recommendation, the $13.6 million represents the historic high water mark for these grants.
  • Local law enforcement will receive a $1.2 million increase in liquor law enforcement grants as a result of increased liquor license fee revenues.

DEQ Budget:

  • The Governor had originally proposed an increase in the state’s solid waste tipping fee and a water user fee to fund clean up and remediation, recycling grants, and infrastructure improvements.  Neither of those fee proposals made it into this budget.
  • Renewing Michigan’s Environment Program: $25 million for environmental site remediation and redevelopment including vapor intrusion and PFAS. These dollars will help offset the loss of Clean Michigan Initiative bond funding as the revenues from those bonds are no longer available. (one-time)
  • Grants for the remediation and redevelopment of sites contaminated by lead paint received $2 million.
  • Recycling grants were increased by $1 million to expand the Recycling Initiative  program.  This program builds partnerships with stakeholders to increase the number of counties with access to recycling; promotes regional collaboration; provides education and technical assistance; and develops a measurement system to quantify recycling participation.

DNR Budget:

  • $4 million in increased camping fee revenue and recreation passport sales will support numerous recreation investments, including additional support for  Recreation Passport local grants.

Pending the Governor’s signature, the budget will take effect October 1, 2018.

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

Revenue Sharing Cuts Outlined in Initial House/Senate Budget Plans

As the Legislature returned from their Spring Recess last week, initial subcommittee action on all but two Senate-originated budgets was completed.  Each of the budget subcommittee reports are now awaiting action before their respective full Appropriations committees – http://www.house.mi.gov/hfa/PDF/Bill%20Status.pdf.

The Senate General Government subcommittee met last week and reported their budget that includes revenue sharing.  The subcommittee’s report, drafted into Senate Bill 855,  matched the Governor’s recommendation, removing the 2.5% increase cities, villages, and townships received this year, resulting in a $6.2 million cut to statutory revenue sharing for the budget year that begins October first.  While the CVT revenue sharing line was reduced, the Senate version retained the counties current year 1% increase (that the Governor had also recommended removing) and added another 1% to the county revenue sharing line item.  This move was explained as a way to ensure “fairness and stability” across local unit types, since counties do not receive Constitutional revenue sharing payments.  Estimates for sales tax growth related to Constitutional payments anticipate an additional 3.1% next year for cities, villages, and townships, distributed on a per capita basis.  You can read the League’s testimony to the Senate subcommittee here – SenateGG.testimony.April2018.

The Senate’s proposal is a marked difference from the version that the House subcommittee reported prior to the spring break (http://blogs.mml.org/wp/inside208/2018/03/28/spring-break-prompts-action-on-state-budget-other-bills/).  The House version found in House Bill 5567 retained $3.1 million of this year’s increased amount, but concurred with the Governor’s recommendation to remove the county 1% increase in the current budget year.  Even with the House’s removal of this year’s 1% increase, county revenue sharing payments remain above 100% of full funding.

The full House Appropriations committee is scheduled to meet each day this week to consider their various subcommittee reports.  The full Senate Appropriations committee will follow suit as soon as their remaining subcommittee reports are finalized.

League members are urged to contact their State Senator and State Representative to remind them of the revenue sharing cuts that cities and villages have endured over the past decade and ask them to retain the current year statutory revenue sharing funding levels for cities, villages and townships as the baseline moving forward.

 

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

 

Governor Presents Final Budget Recommendation

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.

Financial Dashboard Grant Details Released by Treasury

Local units of government that purchase financial forecasting and transparency reporting tools through one of the State of Michigan’s approved vendors, Munetrix or Forecast5, can now apply for a partial reimbursement.

All cities, villages, townships and counties that enter into an agreement to purchase these web-based tools through Munetrix or Forecast5, on or before December 1, 2017, are eligible for a partial reimbursement under the Financial Data Analytic Tool Reimbursement Program. A total of $500,000 in funding is available for reimbursements during the State’s 2018 fiscal year.

Cities, villages, townships and counties interested in applying for a partial reimbursement must submit their Financial Data Analytic Tool Reimbursement Request (Form 5568) to the Michigan Department of Treasury no later than December 1, 2017.  Attached is a copy of Form 5568 and an informational page regarding the program.

To learn more about the program or to download a reimbursement form, go to  http://www.michigan.gov/treasury/0,4679,7-121-1751_2197-451435–,00.html

Revenue Sharing and Grants Division

Michigan Department of Treasury

517-373-2697

TreasRevenueSharing@michigan.gov

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