Treasury Announces Regional Training Opportunities

Treasury shared the following information earlier today on training opportunities they have scheduled in communities throughout the state.  Interested local officials are encouraged to participate.

The Michigan Department of Treasury is pleased to announce the development and implementation of a one day course titled Understanding the Basics of Assessing for Local Unit Officials. This one day course will be offered free of charge to any Local Unit Official who wants to learn a little bit more about assessing and the Audit of Minimum Assessing Requirements (AMAR) process. We currently have scheduled 7 sessions at various locations throughout the State.

 

Sign up for the program is through Eventbrite using one of the links below. Space is limited so we suggest you sign up early!

 

Green Oak Township April 27, 2018:  https://www.eventbrite.com/e/understanding-the-basics-of-assessing-for-local-unit-officials-green-oak-location-tickets-41109827601

 

Marquette Township May 9, 2018:  https://www.eventbrite.com/e/understanding-the-basics-of-assessing-for-local-unit-officials-marquette-may-session-tickets-41109862706

 

Fruitport Township May 17, 2018:  https://www.eventbrite.com/e/understanding-the-basics-of-assessing-for-local-unit-officials-fruitport-township-tickets-41319644168

 

Gaylord May 18, 2018:  https://www.eventbrite.com/e/understanding-the-basics-of-assessing-for-local-unit-officials-gaylord-location-tickets-41110001120

 

Big Rapids June 14, 2018:  https://www.eventbrite.com/e/understanding-the-basics-of-assessing-for-local-unit-officials-big-rapids-location-tickets-41109957991

 

Marquette Township July 11, 2018:  https://www.eventbrite.com/e/understanding-the-basics-of-assessing-for-local-unit-officials-marquette-july-session-tickets-41109914862

 

Howell August 6, 2018:  https://www.eventbrite.com/e/understanding-the-basics-of-assessing-for-local-unit-officials-howell-location-tickets-41124557659

 

Questions regarding the training can be directed to Kelli Sobel at sobelk2@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.

New Pension/OPEB Reporting Requirement Released

Following the year-end passage of pension/OPEB legislation that implements the recommendations of Governor Snyder’s Responsible Retirement Reform task force report, Treasury released late today the reporting requirement documentation which ended up as the main component of Public Act 202 of 2017.

This afternoon’s Treasury announcement is included in Numbered Letter 2018-1: Local Government Retirement System Annual Report. This guidance includes links to a fillable reporting template (Form No. 5572), detailed instructions, and frequently asked questions.  Each of the documents can also be found on Treasury’s Local Retirement Reporting web page.

Under this new law, the linked pension and retiree health care reporting is due six months after the end of a local unit’s fiscal year. For those that have already filed their 2017 audited financial statements, this new report is due by Jan. 31, 2018.

Additional information from Treasury is expected in the coming weeks regarding “underfunded status” waivers and the corrective action plan process under the still-to-be-established stability board.

Communities are encouraged to direct questions via email to their office at LocalRetirementReporting@michigan.gov or visit Michigan.gov/LocalRetirementReporting.

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

Year-End Legislative Wrap-Up

While last week’s House and Senate adjournment merely marks the mid-point of this two-year legislative session, that did not mean that the Legislature coasted into their holiday break.

Highlighted by the intense activity surrounding OPEB reform, both legislative chambers pursued aggressive agendas in the final days before adjourning.  Numerous bills that the League was tracking and engaged with experienced some measure of action:

The now 13-bill OPEB package was signed by Governor Snyder this week as Public Acts 202-214 of 2017 and takes effect immediately.  New reporting requirements under the bill are expected to be phased in over the next year, with some reporting expected due as early as January 31, 2018.  The League will work to update member communities as more information becomes available in the next couple of weeks.

Senate Bill 110 clarifies that municipalities implementing plans to increase the supply of below market housing are not violating the Rent Control Act (PA 226 of 1988) by offering voluntary incentives. This League-supported legislation was introduced in February and received a committee hearing this last week of session. It’s anticipated the bill will receive another committee hearing in early 2018 and be voted out.

Two economic development proposals of key interest to municipalities were also voted out of the Senate during the last week of session.  Similar to legislation that died at the end of 2016, the Senate sponsor introduced Senate Bill 393, which consolidates all tax increment financing authorities, excluding Brownfield Redevelopment Authorities, into one act with added transparency and reporting requirements.  Senate Bill 469 would reinstate the Michigan Historic Preservation Tax Credit.  Both of these bills were voted out of committee and out of the Senate last week and have been referred to the House Tax Policy committee where they are expected to receive committee consideration in the new year.

The League was also pleased with the Governor’s signature on legislation allowing urban grocery store projects to access funding from the community revitalization program this week. The House and Senate coordinated efforts last week on House Bill 4207 to provide State Rep. Andy Schor with one last Public Act before he resigns to take over as mayor of the City of Lansing.

Three different proposals related to the new Personal Property Tax system also saw movement before the recess, with Senate Bills 570-573 being finalized and sent to the Governor.  These bills provide for a much needed local mechanism to address late-filed business exemption applications.  Senate Bills 590-593 were voted out of the Senate and were referred to the House Local Government committee.  These bills, promoted by the League and reported from the Senate committee earlier this fall, would essentially hold communities harmless from any reduction in their debt limit due to a reduction in their property tax base from now-exempt personal property.  Finally, House Bill 5086 was developed between local government groups and the Department of Treasury to address a host of technical and minor policy issues related to the continuing implementation of the new system and the need to align the statute with the practical realities of managing and administering the new law.  This bill moved nearly unanimously out of the House last week and will be considered by the Senate Finance committee in early 2018.

Finally, a League-supported proposal to allow for the voluntary coordination of election duties and functions moved this month as House Bill 4671 received overwhelming support in the House and is now awaiting further action before the Senate Elections & Government Reform committee.

Infrastructure and technology issues also experienced a flurry of lobbying and negotiation over these final weeks of 2017.

Our advocacy efforts combined with a broader coalition opposing legislation which would have preempted most local control over private telecommunication provider line relocation projects.  We were able to delay action on House Bill 5098 that was being pursued by the industry before the end of the year.  This proposal remains alive, however, and we will continue to work to block further action on this bill.

The discussions surrounding the proposed industry roll-out of small cell technology is quickly becoming a big issue for municipalities. Small cells are low-powered antenna nodes that have a range of up to 2 miles and are installed for the purpose of relieving congestion for wireless users. The term “small” refers to the footprint of the device. Small cell devices can be mounted on their own 40’ poles, or on existing utility or street light poles. Senate Bill 637 was recently introduced that would create a new act that allows for small cell technology to be consider a permitted use both inside and outside the right-of-way with limited exceptions. The bill would severely limit local control around siting, impair municipal ability to protect the public health, safety and welfare of residents, and hinder local government’s ability to manage the ROW, potentially leading to a significant increase in the number of new poles within our communities.  Supporters of this proposal are looking for a statewide regulatory structure that is similar to the Metro Act and the Video Franchise Act.

The League is opposed to the language as introduced but working with the Chairman, Senator Mike Nofs, of the Senate Energy and Technology Committee to improve the bill. To do that we have extensively researched legislative efforts in other states, discussed the issue with several communities and municipal attorneys, and looked at the Distributed Antenna System (DAS)/Small Cell License Agreement created by the Grand Valley Metro Council.

League staff have met with Chairman Nofs and presented alternative language based on our research and conversations with members. This viable alternative to the introduced legislation strikes a balance between local control and the nationwide deployment of this new technology. The telecommunications industry will continue its push for the bill when the legislature returns next year in the hopes of quick action . We have asked the Chairman that this issue not be rushed and that all parties be brought to the table to discuss this bill and our alternative.

The Michigan Municipal League is also participant on the Lead and Copper Rule Stakeholder Workgroup that is assisting MDEQ with recommendations to address modifications to the Administrative Rules promulgated pursuant to Michigan’s Safe Drinking Water Act, 1976 PA 399, as amended. The ongoing discussion continues to be about how to best protect the public from lead exposure.  Unfortunately, the preliminary draft rules add additional burdens to community water supply systems that run counter to the principles of asset management and may ultimately hinder the protection of public health. In addition to the League, there are more than a half dozen community water suppliers, the American Water Works Association, public health departments and others participating on this work group.

The draft rule would reduce the action level from 15 parts per billion down to 10 parts per billion, require communities to map their existing system to identify the presence of lead, require that a community water supplier be responsible for the replacement and cost of private lead service lines, along with many other requirements that could pose significant financial and logistic hardships on a community. The League has taken a stance that we are not opposed to determining how much lead is present in water systems or the need to systematically begin removing lead from systems, but it cannot be done in such a way that causes a financial hardship or conflicts with the Headlee Amendment or the Bolt decision.

Link to the Preliminary Draft Rule: 2017 Preliminary Draft Lead and Copper Rule

Link to the DEQ Summary Document: Summary Lead and Copper Rule Requirements

The Governor has requested this issue be placed on an aggressive timeline and a finalized draft rule is expected by the first of the year. Should our concerns not be addressed through the stakeholder process, communities will need to be prepared to offer public comments on the rule in early January. In the meantime we will continue to work with those stakeholders that have common concerns with the process and draft rules to make the necessary adjustment to help prevent exposure to lead while still allowing for the efficient management of our water supply systems.

The Legislature is scheduled to return to full session on January 10, 2018, with the Governor’s final State of the State message and the Fiscal Year 2018-19 budget presentation to follow shortly thereafter.

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

Congress Prepares for Final Vote on Tax Plan

The joint House-Senate conference committee announced their final reconciliation of the federal tax reform proposal on Friday.  Each chamber is expected to vote on the conference report early this week, where the bill is expected to receive enough support to make it to the President’s desk.

The League has been working with the National League of Cities and our delegation throughout the fall to advocate for changes to a number of provisions within the overall reform proposal that could impact communities in Michigan.  While a number of changes that we advocated for have been included in this final version, there are still areas of concern for Michigan municipalities.

After an initial review of the 503-page bill by NLC staff, the conference report on the Tax Cuts and Jobs Act (H.R. 1) does the following;

  • Publicly Issued Tax-Exempt Municipal Bonds: Preserved throughout the whole process.
  • Private Activity Bonds (PABs): Conference report sided with Senate version and preserved PABs.
  • Advance Refunding (ARs) Bonds: Conference report had no difference to reconcile. Tax exemption for interest earned on ARs would terminate on 12/31/2017.
  • New Markets Tax Credits (NMTC): Conference report sided with Senate version and preserved NMTC until their authorization normally expires.
  • Historic Tax Credits (HTC): Conference report sided with the Senate version and preserves the 20% credit for rehabilitation costs to certified historic structures, but eliminates the 10% credit for pre-1936 structures.
  • State and Local Tax (SALT) Deduction: Conference report provided a new modification to SALT. Taxpayers would be able to deduct up to $10k in property taxes combined with either income or sales taxes.  

House Actions: The House Rules Committee is expected to consider the bill on Monday (12/18) and possibly vote on it by Tuesday (12/19).

Senate Actions: The Senate aims to hold 10 hours of debate and a vote on Wednesday (12/20).

A continued thanks to all of you who have sent letters, called members of Congress and helped make sure city priorities have not been ignored.

Feel free to reference www.nlc.org/TaxReform for more information, or reach out with any questions or concerns. Stay tuned.

 

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

 

 

Federal Tax Reform Update – US Senate Proposal

Staff from the National League of Cities shared the following information with MML and other state leagues over the weekend, following the Senate’s release of their proposed version of tax reform…

Late Thursday, the Chairman of the Senate Committee on Finance Orrin Hatch (R-UT) released the Chairman’s Mark of his Tax Cuts and Jobs Act.  The Senate Committee on Finance is expected to markup this legislation on November 13, 2017 at 3:00 p.m. We urge you to contact your congressional delegation, especially the Senate Finance Committee (www.finance.senate.gov/about/membership).

After 4 days, the House Ways and Means Committee concluded committee markup on Thursday as well.  A floor vote on H.R. 1 is expected next week, most likely on Wednesday or Thursday.     

In the House, there are still nine Republicans who are opposed to the tax bill because of its treatment of SALT: New Jersey Reps. Leonard Lance, Frank A. LoBiondo and Christopher H. Smith; New York Reps. Peter T. King, Lee Zeldin, Elise Stefanik and Dan Donovan; and California Reps. Darrell Issa and Tom McClintock. Please thank those Members of the House who are standing strong with us in writing or via social media.

The House and Senate leadership have both stated that they expect to go to conference to reconcile differences in the bills, but they could bypass going to conference entirely.  Either way, they hope to send a final bill to the President for his signature in December. Below, find quick summary on bill differences.

 

  House Bill – Final As of Mark Up Senate Bill – No Markup
Tax Exempt Municipal Bonds Retained (not included in bill) Retained (not included in bill)
Private Activity Bonds Eliminated Retained
Non-refundable Bonds Eliminated Eliminated
State and local income and sales taxes Eliminated (except for those attributable to business income) Eliminated (except for those attributable to business income)
Property taxes Retained (up to $10,000) Eliminated
Mortgage interest Retained (but only on debt up to $500,000 for new loans; no interest on second home, no interest on new home equity loans) Retained (but no deduction on home equity loans)
Personal casualty losses Eliminated (except for federal declared disaster areas) Eliminated (except for federal declared disaster areas)
Nonqualified deferred compensation arrangements Eliminated Eliminated
Historic Tax Credits Eliminated Retained (but reduces their value)
New Mark Tax Credits Eliminated Retained (until current authorization expires in 2 years)
Work Opportunity Tax Credits Eliminated Eliminated
Low Income Housing Tax Credits Eliminated Retained

Today, the Chairs of House Municipal Finance Caucus released an oped to protect bonds and tax credits. www.washingtonexaminer.com/…

Also, NLC was in US News and World Report on tax reform www.usnews.com/news/the-report/articles/2017-11-10/…

We will continue to challenge any plan that threatens the tax exemptions for bonds used to finance critical infrastructure, eliminates the state and local tax deduction that protects local decision making and erases tax credits that strengthen communities.

 

 

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.

Congress Releases Details of Federal Tax Reform Proposal

Congress released the following details of the proposed federal tax reform legislation:

– Ways & Means Cmte Tax Reform Highlights

– bill text  https://waysandmeansforms.house.gov/uploadedfiles/bill_text.pdf

Following NLC’s lead, MML staff have been talking with Michigan delegation members about preserving the State & Local Tax deduction (SALT) within the federal tax code.  The version of the bill released today retains a portion of that deduction for taxpayers to continue deducting local property taxes, but eliminates the deduction for local income taxes.

NLC leaders released the following statement in response to today’s announcement: http://www.nlc.org/article/tax-reform-bill-an-affront-to-local-control

You can view NLC’s State and Local Tax Deduction resource page here: http://www.nlc.org/SALT.

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

Senate Committee Reports Bills Protecting Local Debt Limits

Jeff Budd, Coldwater, and Sen. Mike Shirkey

Jeff Budd, Coldwater, and Sen. Mike Shirkey

The Senate Finance committee reported a bill package on Tuesday that has been a priority for the League this term.  Following testimony from the bill sponsors, League staff and officials from the city of Coldwater, the committee voted unanimously to send the bills to the Senate floor for further consideration.

The recently introduced package, Senate Bills 590-593 (Stamas/Shirkey), reverses an unintended consequence of the new personal property tax (PPT) reform system on municipal debt limit calculations. Currently, many local units of government are bound by statutory debt ceilings tied to a percentage of that community’s total assessed value for all real and personal property.  As small taxpayer and manufacturing equipment is removed from the tax rolls over the coming years due to the new personal property tax reform system, communities find themselves facing a situation where their statutory debt limit will be artificially reduced. This was an impact that was not discovered during the development of the PPT package in 2014, but had recently come to light in municipalities that were in discussion with rating agencies and bond counsels for potential bond proposals.

Working with Treasury and officials from the Michigan Government Finance Officers Association, the League was able to secure language through our Senate sponsors (Sen. Mike Shirkey-Clarklake and Sen. Jim Stamas-Midland) that allows for the assessed value equivalent of each community’s PPT reimbursement payment to be added into the debt limit calculation for every city, village and charter township, essentially holding every community harmless from any reduction in their debt limit due to the reduction of their overall assessed value.  This new provision is similar to how the Home Rule City Act allows for each city’s revenue sharing payment to be included in that city’s debt limit calculation.

These bills are now on the Senate floor awaiting a vote in the coming weeks before moving to the House for consideration.

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

Treasury released the following information this morning regarding grant dollars available through Treasury’s financially distressed city, village and township program:

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 Friday, Oct. 20, 2017.

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 $5.4 million in funding is available for Treasury to award through the FDCVT grant program for the 2018 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 Signed By Governor

The Governor affixed his signature at the end of last week to the omnibus state budget bill.  This bill (HB 4323) includes a 2.5% ($6.2 million) increase to statutory revenue sharing. This spreadsheet from the House Fiscal Agency outlines the expected revenue sharing payments for each municipality based upon this increase.  These new dollars will flow strictly to communities that received a CVTRS payment in the current year and will be distributed to those units on a per capita basis.  Constitutional payments are expected to grow by approximately $40 million in the coming year, subject to actual state sales tax collections.

http://house.michigan.gov/hfa/PDF/Revenue_Forecast/CVT_Revenue_Sharing_Payments_FY16thruFY18_Conference_Report.pdf.

In addition to this welcome increase in revenue sharing, the budget also includes an increase above the Governor’s original proposal to fire protections grant funding of $1.4 million.  While not as high as the supplemental, one-time increase in the current year’s budget, this will be the second year in a row where fire protection grant funding has been higher than the baseline recommendation.  State PILT payments for purchased lands will also see a slight increase in this new budget.  The budget estimates $4 million in revenue coming in from the new medical marijuana law that will be distributed as grants to local units of government.  A new grant program has $500,000 available within Treasury that will provide reimbursements to local units that implement a financial data analytic tool.  Project Rising Tide will receive an additional $2 million to expand beyond the current 10 communities in that program.  The Michigan Enhancement Grant program will receive nearly $36 million to fund 20 projects in communities around the state.  Within the MDOT portion of the budget, an additional $49 million is anticipated being distributed from the MTF to cities and villages, along with additional revenue appropriated to transit and the TEDF.

From a broader level, the budget deposits another $150 million into the state’s Budget Stabilization Fund and $35 million into the Governor’s new Michigan Infrastructure Fund.

Supplemental budget language was added for the current (FY16-17) budget, as well. The Ambulance Quality Assurance Assessment Program (QAAP tax) was eliminated from the current year budget, but language allowing for its inclusion in the coming budget was retained, though it was amended in an attempt to tighten the revenue base upon which this new tax could be assessed.  Efforts will continue to keep DHHS from implementing this new tax and repealing the language in the Public Health Code.

New funding has been added to the current budget year aimed at providing reimbursement dollars for the under-development local Indigent Defense Commission standards to the tune of $5 million.  As these plans continue to be finalized within each county, the picture will become clearer as to how much more will need to be appropriated for full implementation of those plans.

New funding was also included in this supplemental section for the newly created Municipal Wetland Alliance for wetland mitigation banks ($3.9M) and for a Regional Infrastructure Asset Management Pilot ($2M), both of which could benefit communities around the state.

The Governor’s line item vetoes focused mainly on education or human services program additions and did not impact any of the items referenced above.  The new budget goes into effect on October 1, 2017.

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