Revenue Sharing Budgets Positioned for Initial Action; Senate Cuts Statutory by 1.5%

One of the many charts showing how Michigan has disinvested in its cities more than any other state in the state. That tiny red line you see is Michigan.

One of the many charts showing how Michigan has disinvested in its cities more than any other state in the state. That tiny red line you see is Michigan. A 2016-17 Senate budget plan would cut statutory revenue sharing to communities even more. Learn more at SaveMiCity.org

The Michigan House and Senate Appropriations committees made their opening moves on the state budget this week by reporting the full budget bills to the floors of their respective chambers. Following expected floor action on these bills in the coming week or two, each chamber will review the other’s proposal and move toward a final budget deal sometime in early June.

Both proposals continue the current practice of ignoring the fiscal needs of local government, failing to make revenue sharing and the larger issue of municipal finance a budget priority. Without a renewed focus and commitment by the Governor and Legislature, Michigan will continue to occupy last place nationally in our treatment of local government. Learn about the League’s municipal finance initiative at SaveMiCity.org. View how much money your community has lost in revenue sharing here.

The House committee reported an omnibus budget bill, House Bill 5294, to the floor which includes funding for revenue sharing. The House proposal maintains current-year funding for revenue sharing, only deviating from the Governor’s original recommendation by maintaining the $5.8 million that the Governor would have removed for approximately 100 townships that hadn’t received revenue sharing previously.

The Senate committee, on the other hand, moved Senate Bill 788 to the Senate floor with significant changes to the Governor’s proposal for revenue sharing. Statutory revenue sharing would see a 1.5% reduction ($3.85 million) in the Senate version, with the dollars from that reduction being shifted to cover a proposed local match requirement for the purchase of new voting equipment. The League urges you to contact your Senator, asking them to join us in opposition to this approach.

In the Governor’s original budget proposal, the effort to replace existing voting equipment statewide was supported by $10 million in General Fund and $5 million in requested (unidentified) local match. These dollars would be coupled with remaining federal Help America Vote Act funds and dollars appropriated for this purpose in the current budget year. The purchase of new voting equipment has been championed by the County and Municipal Clerks Associations and the Secretary of State’s office, but the call for a local match requirement had not been voiced prior to this year’s budget.

The proposal to accommodate the Governor’s local match request in the Senate version raises serious concerns for the Michigan Municipal League and member communities, even beyond the further erosion of an already devastated statutory revenue sharing base.

  • All cities, villages, townships and counties would benefit from the purchase of new voting equipment, but the local match requirement would only be paid by those cities and villages and few townships that receive a statutory payment. ***Counties and townships that do not receive non-Constitutional revenue sharing payments would pay no local match.  
  • By paying the local match only out of the statutory revenue sharing line, there is no correlation to the actual match requirement for equipment being purchased within each community. In a sample comparing similarly sized communities, one with 19 voting precincts would forgo only about $1,500 in revenue sharing, while another community with only 12 polling places would lose more than $22,000 … and this does not account for the more than 1,000 local government units that would pay nothing in local match!
  • County statutory payments, already funded at 100%, would receive a 2% increase ($4.3 million) in this proposal. Again, without any requirement for a local match for voting equipment purchases by a county.
  • This match requirement would be deducted during the FY 16-17 budget year, yet voting equipment would not be received by any local government until at least 2017 and delivery would like be phased in over two to three years.

Comments have been made that under this proposal, every local unit will receive at least what they received during  the current budget year even with the 1.5% base reduction, but this statement assumes that there will be growth in sales tax revenue driving higher Constitutional revenue sharing payments. Early indications from the most recent Senate Fiscal Agency monthly revenue report reveal that it is unlikely that the state will even meet its already reduced sales tax estimate for the current year, let alone meet the overly optimistic 3.9% growth estimate for the coming year. It is more probable that Constitutional revenue sharing payments will be flat for a third year in a row, if not reduced at some point over the next year.

It is expected that the Senate’s revenue sharing plan will be voted on by the full chamber next week. Please remember to contact your Senator and urge them to begin restoring the cuts of the past decade and reform the way local governments are funded. They should start by rejecting the committee proposal.

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

New “Dark Store” Solution Focuses on Michigan Tax Tribunal Process

A big box "dark store" in southeast Michigan.

A big box “dark store” in southeast Michigan.

State Representative Dave Maturen (R-Vicksburg) introduced House Bill 5578 this week (http://legislature.mi.gov/doc.aspx?2016-HB-5578) with the support of the Michigan Municipal League and other local government groups, to address the ongoing crisis of “dark store” property tax appeals.

The legislation proposed by Rep. Maturen, was developed following a workgroup process which he chaired and involved participation by the League and numerous local assessors, appraisers and other property valuation experts. The proposal would require Michigan Tax Tribunal members to equitably apply universally accepted appraisal standards when deciding larger property tax appeal cases. These standards will provide consistency in determining highest and best use as part of the property valuation process. The legislation would also restrict the consideration of comparable sales that have deed restrictions if the deed restrictions are imposed by the seller to keep competitors of the seller from the  market and  the deed restrictions provide no benefit to the property but only to the seller’s business.

A hearing on the bill is scheduled for 10:30 a.m. Wednesday (April 27) before the House Tax Policy committee. League members are encouraged to contact the legislators on the Tax Policy committee at this link and your own Representative and Senator to explain the importance of this issue and to urge their support for HB 5578. Use the League’s Action Center to contact your lawmakers.

Visit the League’s information page on the Dark Stores issue here: http://www.mml.org/advocacy/dark-stores/

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

MDOT Seeks Comments on Rural Transportation Planning Process

The Michigan Department of Transportation (MDOT) is federally required to reach out to local elected officials in non-metropolitan areas every five years to gauge their involvement and knowledge of the transportation planning process.

They are currently seeking input through a short on-line survey.  Please complete the survey between now and May 31, 2016. To complete the survey please click here.

If you have any questions, please contact Pamela Boyd, Supervisor, Statewide Planning Section at MDOT via email at boydp1@michigan.gov.

John LaMacchia is the Assistant Director of State Affairs for the League handling transportation, infrastructure, energy and environment issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

Transportation Asset Management Council Spring Conference

The Michigan Transportation Asset Management Council has finalized the spring conference program for Wednesday, April 13 at the Dearborn/Detroit Hilton DoubleTree Hotel and Conference Center. The agenda and hotel reservation information can be found at the following link. 2016 Spring Asset Management Program Agenda

The TAMC Conference Committee put together a broad spectrum of topics this year and we are very excited for the event.  The goal was to provide value across a diverse audience and discuss emerging issues such as the new Federal Performance Management regulations, new technologies in pavement maintenance,  incorporating other corridor utility information in Transportation Asset Management planning, and learning Asset Management strategies from our neighbors to the North.  The conference will also include updates from Director Kirk Steudle, the MDOT Metro Region, TAMC activities and reporting of 2015 bridge and pavement conditions.

John LaMacchia is the Assistant Director of State Affairs for the League handling transportation, infrastructure, energy and environment issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

 

MDOT seeks applications for 2017 High Risk Rural Road program.

The Michigan Department of Transportation (MDOT) is pleased to announce the solicitation of applications for the fiscal year (FY) 2017 High Risk Rural Road (HRRR) program. The FY 2017 federal budget for this program is estimated to be $2,000,000.

A HRRR is defined as: 1) any roadway functionally classified as rural major or minor collector or a rural local road that the crash rate for fatalities and incapacitating injuries exceeds the statewide average for those functional classes of roadway, or 2) any roadway functionally classified as rural major or minor collector or a rural local road that will likely have increases in traffic volumes that are likely to create a crash rate for fatalities and incapacitating injuries that exceeds the statewide average for those functional classes of roadway.

For more information on the High Risk Rural Road program please click here. For the electronic submittal form click here.

If you have any questions, please feel free to contact Pamela Blazo at (517) 335-2224 or at blazop@michigan.gov.

John LaMacchia is the Assistant Director of State Affairs for the League handling transportation, infrastructure, energy and environment issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

League CEO Dan Gilmartin to Speak at Congressional Briefing on Flint Water Crisis

Dan Gilmartin is interviewed during the NLC Congressional City Conference in Washington D.C. this week.

Dan Gilmartin is interviewed during the NLC Congressional City Conference in Washington D.C. this week.

WASHINGTON, D.C. – Michigan Municipal League CEO and Executive Director Dan Gilmartin will participate in a Congressional Capitol Briefing Wednesday in Washington D.C. and talk about national infrastructure issues and the Flint water crisis.

Gilmartin will be part of a panel that will inform members of Congress about the most pressing infrastructure issues facing cities today. They also will delve into whether federal policies are keeping pace with local efforts to reevaluate and reconfigure infrastructure for the next generation. More than 200 members of Congress and congressional staff are expected to attend the event taking place 10 a.m. Wednesday, March 9, 2016, at the Capitol Visitors Center Auditorium. The briefing is part of the National League of Cities annual Congressional City Conference happening this week.

Through his work with communities, Gilmartin is recognized as a national leader in the fields of urban revitalization, placemaking, local government reform, and transportation policy.  Model D Media has referred to him as “an urban thinker with an eye for the small, oft-unnoticed changes that can make ‘places’ out of streets and buildings.”  Dan serves as a member of the Michigan Future, Inc. Leadership Council and on the Placemaking Leadership Council.

Joining Gilmartin on the panel will be other local experts who will discuss the water crisis in Flint and what it means for federal-state-local relations nation-wide; contrasting state and local perspectives on accountability in the transit funding process; competing public and private interests in the broadband market; and differing federal and local points of view on infrastructure finance.

Other speakers include Mayor Mark Stodola, of Little Rock, Arkansas; Councilmember Greg Evans, of Eugene Oregon; and Councilmember Andy Huckaba, of Lenexa, Kansas.

NLC is the nation’s largest and most representative membership and advocacy organization for city officials, comprised of more than 19,000 cities, towns, and villages representing more than 218 million Americans.

Matt Bach is director of media relations for the Michigan Municipal League. He can be reached at mbach@mml.org.

Congress to President: Thanks, But No Thanks

Last week, President Obama released his last budget proposal. However, it got the cold shoulder from Congress with Speaker Paul Ryan (R-WI) even going so far as saying that the budget is “a progressive manual for growing the federal government at the expense of hardworking Americans.” In fact, Congress has announced it has no plans to even consider it and the Budget Committees won’t entertain hearings from the White House on it, which is a break in tradition.

Congress has an abbreviated schedule this year, with the election looming. So, it will be interesting to see if they can prepare and negotiate their own budget, or if we can expect a less-controversial “Continuing Resolution” from the current year budget come this summer/fall.

Summer Minnick is the Director of External Relations and Federal Affairs. She can be reached at sminnick@mml.org or 517-908-0301.

 

Breakdown of President Obama’s Final Budget

Last week, President Obama released his final budget proposal and there are significant notable items for local governments. Below is a brief summary of some key items. For the entire budget you can visit the White House’s online resource, which is a pretty neat tool for exploring the proposal.

The President’s budget totals a record $4.1 trillion. Approximately $1.2 trillion is discretionary, with that being split in half between military spending and domestic programs. One of the biggest items that stands out is the $320 billion influx of revenue over 10 years from a $10 per barrel oil tax, which would equate to about $.25 per gallon. But this funding wouldn’t just go to building roads. In fact, the President’s proposal puts a much greater emphasis on transit and multi-modal transportation, increasing the spending ratio of highway to transit spending from 4 to 1 to 2 to 1 with $17 billion for FY 2017 under the “21st century Clean Transportation Plan.” Specifically, it would provide $20 billion above current levels to reduce traffic and provide new ways for families to get to work and school, $3.7 billion in grants for high speed rail, and $5.9 billion for safer, more efficient transit systems. It also allocated another $725 million in TIGER (Transportation Investment Generating Economic Recovery) grants and would make it a mandatory, ongoing program rather than the existing annually-authorized program.

In the Housing, Community and Economic Development budget, the proposal would expand and make permanent the New Markets Tax Credits, which promote investments in low income communities. HUD’s Fair Housing Initiatives Program would see a $6 million increase. There would be $15 million in additional funding for housing choice vouchers and $215 million for Economic Development Assistance Programs, which fund a variety of local and regional programs. However, Community Development Block Grants (CDBG) would see a slight decrease in funding – $2.8 from $3 billion.

The Department of Justice budget would be essentially flat, but there programs that would better benefit cities tucked within it. For example, a new $500 million for the 21st Century Justice Initiative program to help local governments reduce crime and build community trust with law enforcement. An additional $74 million is proposed for the COPS program (Community Oriented Policing Services) and a variety of other smaller local-government focused programs.

In the Environmental Protection Agency budget, there may be a nod to the Flint water crisis in the President’s budget via increased funding in the Drinking Water State Revolving Loan Fund of $157 million. However, this is offset by a decrease in the Clean Water SRF of $414 million. There are also modest increases in both the Brownfields Program and the Superfund program, both programs used for the restoration and redevelopment of abandoned or under-utilized industrial and commercial sites, which are frequently contaminated. On the energy front, the President proposed $2.9 billion to support a range of strategies aimed at reducing US reliance on oil, increasing energy affordability and increasing environmental responsibility.

The President’s budget is the first step in the process, and now it is up to Congress to determine if they will debate any of it or move forward with their own, or simply punt to a Continuing Resolution.

Summer Minnick is the Director of External Relations and Federal Affairs. She can be reached at sminnick@mml.org 517-908-0301.

Congress Passes Ban on Internet Access Taxes, Will Action on Internet Sales Tax Parity Be Next?

Last week, the  Senate passed the Trade Facilitation and Trade Enforcement Act of 2015, H.R. 644, which included a provision that will make permanent the temporary ban on state and local government’s authority to tax internet access (the Permanent Internet Tax Freedom Act or PITFA). The House has already supported the measure, so the bill is now headed to the President for his signature, which the White House has indicated he will provide.

There are a handful of states in which local governments levy such a tax, and the bill also eliminated their ability to continue to do so. While Michigan is not one of them, it is relevant because this issue was frequently tied together in a leverage-sort-of-way to help encourage Congress to act on online sales parity – known now as the Marketplace Fairness Act (S. 698).

And indeed, the bill was supported by many Congressional members in exchange for a commitment from Senate majority leadership to provide floor debate time on Marketplace Fairness later this year. The League will be discussing this issue as a priority in our Congressional visits in Washington DC in a few weeks.

Summer Minnick is the Director of External Relations and Federal Affairs. She can be reached at sminnick@mml.org or 517-908-0301.

League, other organizations to Governor Snyder: VETO SB 571

Dearborn Mayor and League President Jack O'Reilly discusses SB 571 during a news conference Tuesday, Jan. 5, 2016.

Dearborn Mayor and League President Jack O’Reilly discusses SB 571 during a news conference Tuesday, Jan. 5, 2016.

Governor Rick Snyder needs to veto a campaign finance bill sitting on his desk that would create more problems than it attempts to solve.

This was the basic message of a well-attended news conference Tuesday at the Michigan Municipal League’s Lansing office about SB 571. The event was covered by nearly a dozen members of the media, including radio, TV and print/online. Read articles about the news conference by: the Detroit News, mlive.com, WLNS TV, WILX TV, WOOD TVLansing State JournalDearborn Press & Guide, WSJM radio and subscription news services Gongwer and MIRS. The League’s call to veto this bill (read details about that here from the League’s Chris Hackbarth) seems to be gaining momentum.

Check out this Kalamazoo Gazette article that quotes some Republican lawmakers who are having second thoughts about approving SB 571. View this Detroit News editorial calling for a veto.

Rochester Hills Mayor Bryan Barnett discusses SB 571 during a press conference Tuesday,

Rochester Hills Mayor Bryan Barnett discusses SB 571 during a press conference Tuesday,

Senate Bill 571 passed the legislature on Dec. 16 with some extensive last-minute revisions. The bill expanded from 12 pages to 53 pages, but the very last change is the one we had the press conference about. Section 57 of the bill would prevent public entities from distributing information about a ballot proposal in the 60 days before an election.

“In other words, in the weeks before an election we cannot use a mailing or local cable outlets to inform our constituents if a measure will raise or lower their tax rate, who it will affect, if it will mean the community will be selling a piece of property and where it is, how a charter change will affect them or anything else,” said Dearborn Mayor Jack O’Reilly, president of the Michigan Municipal League.

The legislation would prohibit them from distributing public notices on television, radio and in print media explaining property tax proposals, school bond issues or changes in a local charter.

Orion Township Supervisor Chris Barnett discusses SB 571.

Orion Township Supervisor Chris Barnett discusses SB 571.

“Local officials wouldn’t even be able to tell voters in their newsletter who’s running for city council,” said League CEO and Executive Director Dan Gilmartin.

Chris Barnett, supervisor of Orion Township, said the legislation amounts to a “gag order” on election officials 60 days prior to an election.

“What (voters) expect me to do is answer questions and give them information,” Barnett said.

Republican Rochester Hills Mayor Bryan Barnett said perhaps this is a legislative effort to stop tax increases, but that’s not what’s going on in his community. Over the past four years the largely conservative community has considered seven ballot proposals, and only one was a tax increase.

To educate voters on these issues, which are often complicated, Rochester Hills government has turned to YouTube and public access television. But the line could get blurry.

“Can I respond to a resident asking a question about a millage proposal? It’s very concerning,” Barnett said.

A large amount of media attend a news conference Tuesday on SB 571 at the Michigan Municipal League's Lansing office.

A large amount of media attend a news conference Tuesday on SB 571 at the Michigan Municipal League’s Lansing office.

That concern was echoed by Democratic Dearborn Mayor John O’Reilly, who said “we’re going to end up having a lot of effort made trying to interpret where that line is.”

Governor Snyder has until Jan. 11 to decide whether to sign or veto the bill and already some Republican lawmakers who initially voted for it are saying it might be worth a second look. Read these articles from the Kalamazoo Gazette and Holland Sentinel that talk to lawmakers willing to revisit the bill.

The press conference was emceed by League CEO and Executive Director Dan Gilmartin and featured League Board President and Dearborn Mayor Jack O’Reilly, Rochester Hills Mayor Bryan Barnett and officials representing the Michigan Association of Counties, the Michigan Townships Association, Michigan Sheriffs Association, Middle Cities Education Association, Michigan Association of School Administrators, Michigan County Roads Association, Michigan Association of School Boards, Michigan Infrastructure and Transportation Association, and the League of Women Voters. View a joint press release about the issue.

League CEO and Executive Director Dan Gilmartin kicks off a news conference on SB 571.

League CEO and Executive Director Dan Gilmartin kicks off a news conference on SB 571.

We had nearly a dozen members of the media attend including two Lansing TV stations, Michigan Public Radio, Gongwer, MIRS, mlive, Lansing State Journal, Detroit News and Detroit Free Press.

The League along with numerous communities and organizations have sent letters to Governor Snyder asking him to veto the bill. Read the veto letters from: the League, Michigan Association of Counties, and the Michigan Townships Association.

You can register your opinion about this bill with Governor Snyder during regular business hours at (517) 335-7858. Or go to https://somgovweb.state.mi.us/GovRelations/ShareOpinion.aspx.

Excerpts from articles in mlive and Detroit News about the news conference were including in this blog post.

Matt Bach is Director of Media Relations for the Michigan Municipal League. He can be reached at mbach@mml.org and 810-874-1073.