Senate Passes Road Plan with $700 million in Unspecified General Fund Cuts

Last night the Senate voted out a road funding plan that could ultimately raise $1.5 billion for roads, with two of the main pieces of legislation in the plan coming to a tie on the chamber floor.

The plan generates roughly $822 million by increasing the gas tax 15 cents and $700 million from unspecified General Fund budget cuts.

Eight bills — SB 0414, HB 4610, HB 4611, HB 4612, HB 4613, HB 4614, HB 4615 and HB 4616 — were passed through the Senate, but two of the main pieces of legislation were only moved after Lt. Gov. Brian CALLEY broke the tie.

Under HB 4615, the gas tax would go up 19 cents to 23 cents on Oct. 1, 2015; to 27 cents on Jan. 1, 2016, and 34 cents on Jan. 1, 2017, raising $475 million more for the roads in Fiscal Year (FY) 2016, $733 million in FY 2017 and $822.1 million in FY 2018, according the Senate Fiscal Agency (SFA).

The also also creates a lock box directing seven cents of the 15-cent gas tax increase to a fund controlled by the Department of Treasury that could only be spent after approval is given by joint resolutions of the House and Senate.

Under SB 414, a $350 million General Fund allocation would be made toward roads in Fiscal Year (FY) 2017 and a $700 million special roads allocation that would take place going forward until FY 2033.

The bill also includes a mechanism that would roll back the state’s income tax if General Fund revenue exceeds the rate of inflation. Every .1 percent that is rolled back from the state’s 4.25 percent income tax would equate to an additional $230 million reduction in the the state’s General Fund.

HB 4613 would require warranties, where possible, on all road projects over one million dollars. Additionally, this bill contain 23 new reporting requirements that local units of government must provide to MDOT.

The bottom line is that this plan does not provide a long-term sustainable solution to address Michigan’s deteriorating infrastructure. Additional earmarks from the General Fund and only allowing the General Fund to grow by inflation could severely affect the ability of the state to prioritize investment in communities that desperately need it. It could result in future cuts to revenue sharing, K-12, higher education, community colleges, economic development, PILT, fire protection grants, or state police.

The League will be working hard to ensure our voice is heard on the potential long-term negative impacts this proposal could have on our communities. We will continue to update you on the advancement of this proposal and how you can engage members of the Legislature in the coming days.

John LaMacchia is a Legislative Associate for the League handling transportation, infrastructure, and energy issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

 

Governor Signs Budget with $400 Million in General Fund Spending on Roads

The governor recently signed budget that included an additional $400 million in General Fund spending for roads and bridges. Of the $400 million $160 million will be used to match all available federal funds and the remaining $240 million will be distributed to MDOT, County Road Commissions, and Cities and Villages.

This additional revenue will result in additional $56.7 million for local roads in cities and villages throughout the state. For a breakdown of what each individual community will receive please click the following link. Act 51 breakdown for cities and villages

Although this additional money will be helpful, it does not represent a long term solution. The League continues to advocate for a long-term sustainable solution that will fund all aspects of out transportation network.

John LaMacchia is a Legislative Associate for the League handling transportation, infrastructure, and energy issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

Bill Allows Locals First Crack at Surplus Snow Removal Equipment

HB 4368 would require the Michigan Department of Transportation to make surplus snow removal equipment available for sale to local units of government before otherwise disposing of it.

Under current law and practice, excess or surplus MDOT equipment, including snow removal equipment, is sold through DTMB public auction. Local agencies are currently eligible to bid for equipment at auction but under this legislation they will have the first opportunity to bid. The League supports this legislation.

John LaMacchia is a Legislative Associate for the League handling transportation, infrastructure, and energy issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

HHS Issues Final Recommendation for Community Water Fluoridation

The Michigan Department of Health and Human Services (MDHHS) oral health program is pleased to announce that the U.S. Department of Health and Human Services recently released the final Public Health Service (PHS) recommendation for the optimal fluoride level in drinking water to prevent tooth decay.

The new recommendation is for a single level of 0.7 milligrams of fluoride per liter of water. It updates and replaces the previous recommended range (0.7 to 1.2 milligrams per liter) issued in 1962. The Office of Drinking Water and Municipal Assistance in the Michigan Department of Environmental Quality (DEQ) will continue to advise and assist community water systems to achieve this new recommendation.

In Michigan, the majority of the Public Water Systems adjust fluoride levels to be in line with this updated PHS community water fluoridation recommendation. Fluoridation of public water supplies in the United States began close to 70 years ago in Grand Rapids, Michigan. Currently, more than seven million Michigan residents have access to community water fluoridation to improve oral health.

For more information please click here.

John LaMacchia is a Legislative Associate for the League handling transportation, infrastructure, and energy issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

House Road Funding Plan Sent to the Senate

With almost entirely Republican support, a twelve bill package that represents Speaker Cotter’s transportation plan was passed out of the House today and sent to the Senate. The plan would use existing revenue and prioritize future dollars to provide an additional $1.1 billion in funding for roads and bridges and was broken down into the following five categories.

$792 million from the General Fund
$135 million from Reprioritizing Restricted Funds
$117 million from Tax Fairness
$38 Million in New Revenue
Reforms and Efficiencies

General Fund: The $792 million the Speaker proposed will come from prioritizing general fund spending and assumes cuts can be avoided due to expected future growth in revenues. This is phased in over 4 years with $442 million being dedicated in FY 16, $492 million in FY 17, $617 million in FY 18, and $792 million in FY 19. After FY 19 the number will grow by the rate of inflation or 5%, whichever is less.

Reprioritizing Restricted Funds: Of the $135 million, $75 million will come from tobacco settlement dollars currently in the 21st Century Jobs Fund, $60 million from the states tribal gaming compact. These bills gut MEDC funding and potentially many of the programs our members have benefited from.

Tax Fairness: The House eliminated the Earned Income Tax Credit resulting in a $117 million for roads.

New Revenue: $38 million will come from diesel parody (raises tax on diesel to 19 cents and ties it to inflation) and increased fees on electric and hybrid vehicles ($30 increase for hybrids and $100 increase for electric).

Reforms and Efficiencies: The House-passed bills will require competitive bidding on all MDOT and local road projects over $100,000, require MDOT and local road agencies to secure warranties for projects over $2 million, and allow townships contributing greater than 50% to a road project over $50,000 to require competitive bidding.

Other highlights: The current gas tax will remain at 19 cents but will be tied to inflation. All of the new money will be sent to MDOT, counties, cities and villages resulting in no increase for the comprehensive transportation fund.

The proposed package of bills has less than $40 million in new revenue. It neglects to make a much needed investment in transit and jeopardizes economic development funding many of our communities benefit from. This plan also impacts the long-term certainty our communities need to plan, which is one of the key factors to our opposition.

The League firmly believes we must find a sustainable long-term solution to the problem that includes new revenue that is dedicated to the entire transportation system. These bills do not do that. We have offered testimony on multiple occasions explaining our dissatisfaction with this proposal. Our advocacy efforts will continue to focus on a solution that includes new revenue and makes much needed investments in public transit.

We look forward to working with the Senate and are hopeful that this package can be improved significantly.

John LaMacchia is a Legislative Associate for the League handling transportation, infrastructure, and energy issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

Speaker Cotter Unveils House Republican Transportation Solutions

At a press conference this afternoon Speaker Kevin Cotter released the House Republican transportation plan. The highlights are below.

  • This plan will generate $1.05 billion for transportation
  • $700 million from the General Fund
  • $185 million from Reprioritizing Restricted Funds
  • $162 million from Tax Fairness
  • Reforms and Efficiencies

General Fund: The $700 million the Speaker is proposing will come from expected future growth in revenues and additional anticipated revenue available based on the upcoming Consensus Revenue Estimating Conference. This portion of the plan lacked specifics so it is yet to be determined what impact this would have on the state budget moving forward but the Speaker said he would be able to do this without making cuts.

Reprioritizing Restricted Funds: Of the $185 million, $75 million will come from tobacco settlement dollars currently in the 21st Century Jobs Fund, $60 million from the states tribal gaming compact, and $50 million from eliminating the film tax credit.

Tax Fairness: The Speaker will achieve the projected $162 million through the creation of tax fairness by eliminating the Earned Income Tax Credit and using that $117 million for roads. The remaining $45 million will come from diesel parody and increased fees on electric and hybrid vehicles.

Reforms and Efficiencies: The plan will require competitive bidding on all MDOT and local road projects over $100,000, require MDOT and local road agencies to secure warranties for projects over $1 million, and allow townships contributing greater than 50% to a road project over $50,000 to require competitive bidding.

Other highlights in this plan include a phase in over four year with $522 million going to roads in FY 16, $697 million in FY 17, $872 million in FY 18, $1.05 billion in FY 19 and beyond. All of the new money would only be sent to MDOT, Counties, and Cities and Villages. None of the new money would go to transit operations. The current gas tax will remain at 19 cents but would be tied to inflation under this plan. A copy of the document Speaker Cotter provided can be found at the following link. House Republican Road Funding Plan

As the League gathers more details on this plan in the coming days we will be sure to update you with any new information.

John LaMacchia is a Legislative Associate for the League handling transportation, infrastructure, and energy issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

Voting Yes Tuesday on Proposal 1 is Right Thing for Michigan’s Roads, Communities, Schools

Sterling Heights City Manager and MML board member Mark Vanderpool speaks at a Proposal 1 Safe Roads Yes! tour bus stop in Romeo. The League appreciates all the support it has received from members on Proposal 1.

Sterling Heights City Manager and MML board member Mark Vanderpool speaks at a Proposal 1 Safe Roads Yes! tour bus stop in Romeo with Governor Rick Snyder and MDOT Director Kirk Steudle. The League appreciates all the support it has received from members on Proposal 1.

The fate of Proposal 1 goes in the hands of voters tomorrow (Tuesday, May 5, 2015) and the Michigan Municipal League strongly encourages you to vote yes on this road-funding plan.

The League Board of Trustees in January officially endorsed Proposal 1 and the League has been actively supporting it ever since. League staff and members have participated in numerous community meetings, town hall events, public forums, debates and city council sessions to promote Proposal 1. Staff and members also were involved in the Vote Yes on Proposal 1 bus tour Thursday, Friday and today. In addition, we’ve encouraged communities to pass resolutions in support and you can view that list here.

Our message throughout the campaign has been the same: That this proposal is in the best interest of communities throughout Michigan and will improve our ability to attract and retain talent.

The League’s John LaMacchia, who has been leading our Vote Yes efforts, said this at a recent Proposal 1 event: “Michigan now spends less per resident on roads than any other state. Let me say that again: Michigan is now dead last in per-capita funding for roads. We’ve neglected to properly invest in our roads and bridges and everywhere you travel in this state you can see the repercussions of that. This proposal will constitutionally guarantees that every penny we pay in state fuel taxes goes to transportation while protecting funding for local governments and schools. This proposal is not perfect … nothing from Lansing ever is. But it does provide a long-term sustainable solution that will fix our roads, and the only guarantee we will have on May 5th if this fails is that our roads will get worse. Vote Yes!”

Here are some details about Proposal 1:

Ballot Proposal:

  • Raises the sales tax from 6% to 7%
  • Exempts sales tax from motor fuel
  • Removes higher education funding from the School Aid Fund
  • Dedicates a portion of the use tax to K-12 education

Statutory Changes Effective Only if Proposal 1 Passes:

  • Increases the tax charged on motor fuel
  • Eliminates the depreciation on vehicle registration fees
  • Increase registration fees on the heaviest trucks
  • Requires more competitive bidding and road warranties
  • Restores the Earned Income Tax Credit to 20% of the federal level

Revenue Generated:

League members - Lapeer City Manager Dale Kerbyson and Lapeer City Commissioner and MML Board member Catherine Bostick-Tullius - talk with Governor Snyder at a Proposal 1 bus tour stop near Davison.

League members – Lapeer City Manager Dale Kerbyson and Lapeer City Commissioner and MML Board member Catherine Bostick-Tullius – talk with Governor Snyder at a Vote Yes on Proposal 1 bus tour stop near Davison.

Fixing our roads will make them safer by repairing dangerous potholes and improving roadway design. Today, many drivers swerve to avoid dangerous potholes or lose control of their vehicles as a result of flat tires.

According to TRIP, a national transportation research organization, roadway design is a contributing factor in about one-third of fatal traffic crashes. Between 2008 and 2012, 4,620 people died in Michigan car accidents – an average of 924 fatalities per year.

For more information about Proposal 1 go to the League’s Safe Roads Yes! webpage.

To learn more about the Safe Road Yes! campaign go here. View here a series of question and answer videos about Proposal 1. Check out what MML members have to say about Proposal 1. See how much your community will get in additional road dollars and constitutional revenue sharing if Proposal 1 is approved. View which Michigan communities have passed resolutions in support of Proposal 1.

Matt Bach is director of media relations for the Michigan Municipal League. He can be reached at mbach@mml.org. The League’s John LaMacchia can be reached at jlamacchia@mml.org.

Proposal 1 Offers Michigan’s Last, Best Chance to Fix Roads with Guaranteed Funding

John LaMacchia discusses Proposal 1 at a recent Burton City Council town hall meeting.

John LaMacchia discusses Proposal 1 at a recent Burton City Council town hall meeting.

The fate of Proposal 1 will be decided by voters next week (Tuesday, May 5), and there is one thing guaranteed about the outcome: If it passes it will provide a solution to fix Michigan’s crumbling infrastructure and will guarantee funding for transportation, local government, schools. And if it fails? No one can guarantee a solution out of the state Legislature.

That’s the simple message from the Michigan Municipal League’s John LaMacchia, legislative associate, in his many speaking engagements, media interviews and community meetings about Proposal 1 in recent days, weeks and months. LaMacchia has been the League’s voice on Proposal 1 after the League board unanimously endorsed the road funding package in January.

“The one thing that those for and against Proposal 1 agree on is the longer we take to come up with a transportation funding plan, the worse are roads are going to get,” LaMacchia said.

If Proposal 1 passes, it would guarantee, for the first time, that every penny we pay in state fuel taxes goes to transportation.

Bad-bridge-small-for-webLansing would no longer be able to divert taxes paid on gas to some other state program or service.

Here is some additional information about what Proposal 1 would do:

Ballot Proposal:

  • Raises the sales tax from 6% to 7%
  • Exempts sales tax from motor fuel
  • Removes higher education funding from the School Aid Fund
  • Dedicates a portion of the use tax to K-12 education

Statutory Changes Effective Only if Proposal 1 Passes:

  • Increases the tax charged on motor fuel
  • Eliminates the depreciation on vehicle registration fees
  • Increase registration fees on the heaviest trucks
  • Requires more competitive bidding and road warranties
  • Restores the Earned Income Tax Credit to 20% of the federal level

Revenue Generated:

We would fix more roads instead of just fill potholes if Proposal 1 passes May 5.

We would fix more roads instead of just fill potholes if Proposal 1 passes May 5.

Fixing our roads will make them safer by repairing dangerous potholes and improving roadway design. Today, many drivers swerve to avoid dangerous potholes or lose control of their vehicles as a result of flat tires.

According to TRIP, a national transportation research organization, roadway design is a contributing factor in about one-third of fatal traffic crashes. Between 2008 and 2012, 4,620 people died in Michigan car accidents – an average of 924 fatalities per year.

For more information about Proposal 1 go to the League’s Safe Roads Yes! webpage.

To learn more about the Safe Road Yes! campaign go here. View here a series of question and answer videos about Proposal 1. Check out what MML members have to say about Proposal 1. See how much your community will get in additional road dollars and constitutional revenue sharing if Proposal 1 is approved. View which Michigan communities have passed resolutions in support of Proposal 1.

Matt Bach is director of media relations for the Michigan Municipal League. He can be reached at mbach@mml.org. The League’s John LaMacchia can be reached at jlamacchia@mml.org.

Changes to 2015 METRO Act Payments

The Michigan Municipal League has been asked to inform eligible municipalities that the 2015 METRO Act payments may be delayed by approximately 15 to 30 days, due to a change in state law transitioning the functions and responsibilities of the Metropolitan Extension Telecommunications Rights-of-Way Oversight (METRO) Authority to the new Local Community Stabilization Authority (LCSA).

The transition process will have minimal impact on municipalities as all the provisions of the METRO Act, except for the administration of functions and responsibilities of the former METRO Authority, remain unchanged. The primary changes under the LCSA include:

1. Maintenance fee payments from telecommunication providers will be paid to the LCSA and deposited into an LCSA account maintained by Comerica Bank. Payments will not be deposited with the State of Michigan.

2. Comerica Bank will distribute METRO Act payments to municipalities on behalf of the LCSA.

3. Please Note: You will no longer receive METRO Act payments via State of Michigan warrants or electronic transfer. Payments by check or electronic transfer will be processed by Comerica Bank on behalf of the LCSA with a notation that payment is a METRO Act payment.

For more information and FAQ’s about the METRO Act functions of the LCSA, please visit www.michigan.gov/lcsa or e-mail LCSA at metroinfo@michigan.gov. The LCSA expects to create its own new website in the near future. Please click on the following link for a copy of the letter provided by LCSA. Changes to 2015 Metro Act Payments

John LaMacchia is a Legislative Associate for the League handling transportation, infrastructure, and energy issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

Michigan Municipal League to Host Safe Roads Symposium in Sterling Heights About Proposal 1

Open invitation to Proposal 1 symposium in Sterling Heights March 31.

Open invitation to Proposal 1 symposium in Sterling Heights March 31.

The Michigan Municipal League will host a Safe Roads Symposium on Tuesday, March 31, 2015, beginning at 6:30 p.m.

The event will take place at the Velocity Collaboration Center, 6633 18 Mile Rd, Sterling Heights, MI 48314, and will be open to the public.

A panel of experts will break down the details and impacts of Proposal 1.

To view the official invitation, click here.

For more information please contact the Velocity Collaboration Center at 586-884-9322.

John LaMacchia is a Legislative Associate for the League handling transportation, infrastructure, and energy issues. He can be reached at jlamacchia@mml.org or 517-908-0303.