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.

Michigan Investment in Municipalities Worst in Nation – By Far, Census Data Shows

The League's Anthony Minghine discusses revenue sharing during the news conference Monday afternoon.

The League’s Anthony Minghine discusses revenue sharing during the news conference Monday afternoon.

How bad is the municipal finance situation in Michigan? It’s the worse in the nation over the last decade, according to new data unveiled at a Michigan Municipal League news conference Monday, March 21.

And the culprit? State policies and politicians who have ignored the needs of cities, in the process damaging the state’s overall economy.

U.S. Census data shows Michigan is the ONLY state in the nation where municipal revenues overall declined from 2002-12 (the most recent information available).

Across the state, municipal revenues were down by 8.63 percent over that period, led by a 56 percent reduction in state revenue sharing.

Meanwhile, overall state revenues increased 39 percent. The numbers show that the state balanced its budget on the backs of cities.

The successful news conference was covered by multiple news outlets and also was live-streamed.

savemicity-large-websticker-72dpiView articles by the Detroit News, Gongwer, the Associated Press, Crain’s Detroit Business, the Detroit Free Press, MIRS News Service and WDET radio. The Free Press report is a column by Nancy Kaffer and does a particularly good job explaining the plight of cities.

You can see all the details at SaveMICity.org, a new web site the Michigan Municipal League has set up to provide information about the severity of the municipal finance problem facing Michigan, and offer solutions over time.

The website also has a new data base showing the revenue sharing dollar amounts diverted from every community in the state from 2002 to 2015.

More than $7.5 billion has been diverted statewide in that time period. Look up your community’s information here.

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.

“Our cities are facing desperate conditions,” said League CEO and Executive Director Dan Gilmartin.

And he pointed to “fundamentally flawed” state policies providing for municipal finance, including massive cuts in revenue sharing since 2002, limits on assessment increases, but none on decreases, and other punitive state policy decisions.

Across America, the statewide average increase in municipal revenues was more than 40 percent.

The state with the next worse municipal finance revenue growth was Ohio, and there revenue grew by 25.7 percent. Around the nation, the average increase was more than 40 percent.

League Associate Executive Director and COO Tony Minghine has been leading a task force of League members and staff in examining the situation and brainstorming solutions. Minghine explained at the news conference that state policies have led to “strategic disinvestment” by cities, as they struggle to balance budgets in the face of declining revenues. He asked rhetorically whether Flint might have been able to avoid its man-made water contamination catastrophe if it had received the $63 million in revenue sharing withheld by the state since 2002 as a part of state budget balancing.

Minghine said more revenue is just one part of the League’s plan to be laid out in coming months, to try to address the pressing situation. He said cities will ask for legislative approval to address cost issues and look at the structure of local services in ways that are today prohibited by state law.

Another chart showing how Michigan has disinvested in its cities more than any other state in the state.

Another chart showing how Michigan has disinvested in its cities more than any other state in the state.

Wayne Mayor Susan Rowe showed how the situation is facing her city, which has seen revenue sharing cut by a cumulative $7.8 million since 2002 and has lost millions more in tax base due to decisions made at the state level regarding assessment practices. Wayne has laid off half its police force and still will run out of money in 2017. “We need the state to keep its promises to cities,” she said.

Mitch Bean of the Michigan Economic Consulting Group minced no words in putting the current plight of many cities on state policies. He pointed out that the combination of the Headlee Amendment to the state constitution and Proposal A allow assessments to drop during hard times, but limit their growth during good times. As a result, even a relatively well-off community like Farmington Hills, which saw assessments drop 30 percent from 2008 to 2012, will likely not see its tax base return to 2008 levels until 2025.

Why should state policymakers care about what they are doing to cities? Shanna Draheim of Public Sector Consultants, which has prepared a new report “Creating 21st Century Communities, Making the Economic Case for Place” said the result of these state decisions is that Michigan cities are lagging successful communities in attracting new talent. And that means the state is lagging in that vital category. You can see it in state personal income data, where Michigan has gone from a top 15 state to a bottom 15 state in per capita income since 2000.

Speakers during Monday's Michigan Municipal League press conference in Lansing. From left, Mitch Bean, Wayne Mayor Susan Rowe, Eric Lupher, Anthony Minghine and Dan Gilmartin.

Speakers during Monday’s Michigan Municipal League press conference in Lansing. From left, Mitch Bean, Wayne Mayor Susan Rowe, Eric Lupher, Anthony Minghine and Dan Gilmartin.

“States that have invested in cities are doing the best. They are growing economically. Michigan has the opportunity to do the same,” said Draheim.

But not unless we make some major changes to the state’s municipal finance policies, in a way that will let cities create the safe, walkable, fun locations that people want to move to. Until that happens, all of Michigan will suffer as the state’s economy sputters and fails to provide the public goods and economic opportunities that benefit all of us, whether we live in a big city, or rural township.

Matt Bach is director of media relations at the Michigan Municipal League. He can be reached at mbach@mml.org and (734) 669-6317.

League’s Dan Gilmartin Talks Flint Water Crisis, Infrastructure Issues at Congressional Briefing

Michigan Municipal League CEO and Executive Director Dan Gilmartin participates in a Congressional Briefing on the Flint Water Crisis and infrastructure issues in Washington D.C. Wednesday.

Michigan Municipal League CEO and Executive Director Dan Gilmartin participates in a Congressional Briefing on the Flint Water Crisis and infrastructure issues in Washington D.C. Wednesday.

WASHINGTON, D.C. – Michigan Municipal League CEO and Executive Director Dan Gilmartin and fellow municipal leaders from across the nation called for a partnership between cities, states and the federal government to improve the country’s ailing infrastructure.

Gilmartin participated in a panel discussion at the Congressional Capitol Briefing earlier today (March 9, 2016) in Washington D.C. Gilmartin and the panel discussed national infrastructure issues and the Flint water crisis. Other scheduled panelists were Mayor Mark Stodola, of Little Rock, Arkansas; Councilmember Greg Evans, of Eugene Oregon; and Councilmember Andy Huckaba, of Lenexa, Kansas.

The panel also discussed 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 attended the event at the Capitol Visitors Center Auditorium. The briefing is part of the National League of Cities annual Congressional City Conference concluding today.

In response to the Flint water crisis, the NLC on Tuesday announced a resolution that declared that the nation’s cities stand united in support of Flint. The resolution also included a call to Congress and the Administration to resolve the Flint Water Crisis. View the resolution here.

Here is an excerpt of the press statement about the resolution:

NLC is also calling on Congress and the administration to support robust funding for all water infrastructure mechanisms, including the Clean Water and Drinking Water State Revolving Loan Fund programs and the Water Infrastructure Finance and Innovation Act.

“The true tragedy is that the families-and children-impacted by the lead contamination in Flint will endure long-term education and mental health impacts,” said National League of Cities President Melodee Colbert-Kean, councilmember, Joplin, Mo.”The federal government must make a long-term commitment to help these families with the challenges that lie ahead.”

“The Flint drinking water crisis is unconscionable and unacceptable. Cites stand in solidarity with Flint, and the National League of Cities stands united with all American cities in the need to update our nation’s deteriorating water infrastructure,” saidNational League of Cities CEO and Executive Director Clarence E. Anthony. “We must invest in the infrastructure our communities depend on. We need the federal government to step up, and work with cities to make sure there will never again be another disaster like in Flint.”

“The tragic events in Flint are a wake-up call for the nation. Policies that ignore critical infrastructure needs result in a shameful disinvestment in our cities, leading to problems like we are experiencing in Flint,” said Dan Gilmartin, executive director and CEO of the Michigan Municipal League. “The Michigan state government has shorted communities $7 billion in revenue since 2000. The Flint crisis is the latest result of this ruinous policy.”

Access to clean drinking water is fundamental for the health and well-being of America’s communities and families. Lead-contaminated drinking water can have permanent and long-term effects on mental health, IQ and development, particularly in infants and children.

There is an urgent need to invest in our aging water infrastructure nationwide. The EPA estimates the U.S. water infrastructure capital needs to be approximately $720 billion over the next 20 years.

View the full press release about the resolution here.

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.

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.

Michigan Municipal League Members Testify on Dark Stores Issue; Call for Immediate Fix

Chris Hackbarth testifies on the Dark Stores issue along with MTA and MAC officials.

Chris Hackbarth testifies on the Dark Stores issue along with MTA and MAC officials.

(UPDATE: View the League’s new Dark Stores resource web page and view additional Dark Stores-related photos here).

The Michigan Municipal League and some of our members were given the opportunity to offer testify on the Dark Stores tax loophole issue Wednesday before the House Tax Policy Committee. If you’re not aware, the Dark Stores situation involving property tax appeals by Big Box stores like Meijer, Kmart and Wal-mart, is quickly becoming one of the most significant issues, with the biggest implications, facing Michigan communities.

The League testified along with the Michigan Association of Counties and the Michigan Townships Association. We discussed the impact from Dark Store theory of assessment and the need for immediate fixes. We told the committee about the manipulation of property values that big box retailers are perpetrating through the placement of negative use deed restrictions to devalue buildings that they vacate and then point to later on as support for lowering their assessments.

The League has organized a coalition of more than a dozen organizations to take on this issue. View our joint statement previously given to the committee. Along with organizing this coalition, the League is pursuing an aggressive public relations campaign to bring attention to this important issue through radio, television and print media. We urge your assistance with this effort by contacting your Senator and Representative to explain to them the importance of addressing these dark store appeals and restoring a fair and proper valuation system.

Three Rivers City Manager Joseph Bippus and Mayor Thomas Lowry testify on the Dark Stores issue Dec. 9, 2015.

Three Rivers City Manager Joseph Bippus and Mayor Thomas Lowry testify on the Dark Stores issue Dec. 9, 2015.

Among those testifying Wednesday were League members Three Rivers Mayor Thomas Lowry and City Manager Joseph Bippus. They testified as guests of State Rep. Aaron Miller, R-Sturgis. Lowry discussed the financial impact of the Dark Stores issue on his city.

“In the last two years we’re pushing well over $300,000 that we had to give back. We only have a $4.3 million budget, we’re approaching 10 percent of (our budget) just from the Dark Store theory,” Lowry told the committee. “We can get an employee for roughly 1 ½ percent of our budget. So for every 1 to 2 percent reduction in our general fund revenues we’re letting an employee go. This absolutely affects the level of services that we can provide to our citizens and our citizens still expect the same level of services.”

In essence, the Dark Store theory is a tax loophole scheme being used by Big Box retailers to lower the amount they pay in property taxes. Retailers such as Meijer, Lowe’s, Target, Kohl’s, Menards, IKEA, Wal-Mart and Home Depot across Michigan are arguing that the market value of their operating store should be based on the sales of similar size “comparable” properties that are vacant and abandoned (aka “dark”) and may not even be located in Michigan. In the last few years, the political appointees on the Michigan Tax Tribunal have upheld this “Dark Store theory” and cut property tax assessments in some cases by as much as 50 percent. This impacts local revenues and subsequently local services and making Michigan one of the only places in the country that assess Big Box retail buildings in this manner. These rulings have resulted in a loss of millions of dollars in tax revenue for local governments across Michigan and now other businesses – not just Big Box stores – such as drug stores and auto repair businesses are attempting to get their taxes lowered based on this same Dark Store argument.

Auburn Hills officials talk with State Rep. Jim Townsend following a House Tax Policy Hearing on the Dark Stores issue Dec. 9, 2015.

Auburn Hills officials talk with State Rep. Jim Townsend following a House Tax Policy Hearing on the Dark Stores issue Dec. 9, 2015.

 

Grand Rapids Attorney Jack Van Coevering, former chief judge and chairman of the Michigan Tax Tribunal, testified about how the Michigan Tax Tribunal rulings have resulted in Big Box property tax assessments that are significantly lower in Michigan compared to other states. He gave multiple examples:

  • In Michigan, Lowes stores are assessed at $22.10 per square foot. In Lowes home state of North Carolina, the same stores are valued at $79.08 per square foot.
  • In Michigan, Menards and Target are valued at $24.97 per square foot. In Menard’s home state of Wisconsin, the sames stores are valued at $61.23 per square foot.
  • Sam’s Clubs and Wal-Mart now average around $25.68 per square foot in Michigan. Studies of those buildings in the home state of Arkansas are being done, but Van Coevering said he expects them to be much higher than they are in Michigan.

Van Coevering added that most of the Big Box stores in Michigan used to be valued in the $55 range per square foot and now the amounts have been cut in half due to the Dark Stores theory.

Escanaba Assessor Daina Norden attends the Dark Stores hearing Dec. 9, 2015.

Escanaba Assessor Daina Norden attends the Dark Stores hearing Dec. 9, 2015.

The House Tax Policy committee led by Representative Jeff Farrington, R-Utica, first met on the issue Nov. 4 and scheduled this follow-up hearing after it ran out of time to hear from all those who wanted to speak on the issue. Officials from Auburn Hills were also present and attempted to testify and unfortunately time ran out and they did not get a chance to speak. Instead, they did submit written testimony and those in attendance were recognized by Chairman Farrington. I want to thank the Auburn Hills contingent for their continued work on this issue – Auburn Hills City Manager Thomas Tanghe; Assessor Michael Lohmeier; and City Attorney Derk Berkerleg.

Escanaba Assessor Daina Norden also attended the hearing.

The House Tax Policy committee has established a work group to study the issue. The work group, being led by House Tax Policy Committee Vice-Chair David Maturen, R-Vicksburg, includes representatives from all sides of the issue, including the League. Check out an in-depth radio video interview of Maturen discussing the issue and the workgroup.

Posted by Matt Bach on behalf of Chris Hackbarth, the League’s director of state affairs. Chris can be reached at 517-908-0304 and chackbarth@mml.org.

League, MAC and MTA Issue Joint Statement on Data Center Abatement Proposals

The Michigan House Tax Policy Committee today is reviewing legislative proposals regarding what’s known as the data center issue and the Michigan Municipal League along with other organizations have distributed a joint statement regarding the legislation.

The biggest concern from the League’s perspective is ensuring that local communities continue to have the ability to establish local control on both existing and future abatement requests, like we have for other economic development abatement tools. One proposal being shopped by the existing data center industry would eliminate the current language providing local involvement in future data center investments. The League and other local government groups are opposed to this effort. We feel it is appropriate to maintain local involvement in any decision on whether to abate taxes as an economic development tool.

Here is the full statement on this issue by the League, the Michigan Association of Counties (MAC) and the Michigan Townships Association (MTA):

As the representatives of local government in Michigan, our organizations ― which are responsible for delivering the daily services Michigan residents count on ― wish to clarify our position on the various legislative proposals being discussed for the data center industry, especially those surrounding exemptions for personal property.

Local governments welcome economic development/job creation in this state and our goal is to continue to partner with the state.

If the Legislature and administration believe exemptions for existing firms and their existing equipment in a broad-based personal property exemption framework are necessary, we recommend the exemption for current equipment follow the recently adopted system for small taxpayers and manufacturers, allowing the local units to be fully reimbursed for the reductions to their tax base.

In our view, though, a blanket, state-ordered exemption would be counterproductive, given the existing economic development tools available to reduce/abate personal property for business, including data centers.

Absent a reimbursement mechanism, language similar to what the House and Senate are considering, which allows for a local unit to approve/deny a request for an abatement of data center personal property, is vital. Allowing local governments to be involved in this way ensures they are able to evaluate the local budget costs against the benefits of proposed exemptions, just as they do with all other economic development decisions.

Adoption of one of these approaches will protect existing local government budgets and preserve the role of the local unit in these critical local economic development decisions.
Thank you for your consideration. We welcome the opportunity to discuss further should you have any questions.

– Chris Hackbarth, Director of State Affairs for the Michigan Municipal League
– Judy Allen, Director of Government Relations for the Michigan Townships Association
– Steve Currie, Deputy Director for the Michigan Association of Counties

Posted by Matt Bach on behalf of Chris Hackbarth. For more information contact Hackbarth at chackbarth@mml.org and 517-908-0304.

December 1st Revenue Sharing Deadline Reminder

The Michigan Department of Treasury distributed the following reminder to all Cities, Villages and Townships this week about the upcoming December 1st deadline to submit the necessary documentation to receive statutory revenue sharing payments.

Official CVTRS Detailed Guidance FY 16 Letter

Subject: CVTRS/CIP DEADLINE – DECEMBER 1, 2015

This is a reminder that the due date for the City, Village, and Township Revenue Sharing (CVTRS) and County Incentive Program (CIP) is 11:59 pm on December 1, 2015.

In order to meet the deadline and qualify for the full CVTRS/CIP payment amount available, a local unit must submit to Treasury the documents listed below and make the documents available for public viewing in the city, village, township, or county clerk’s office or post them on a publicly accessible Internet site.

The required documents are:

  1. Signed Certification of Accountability and Transparency (form #4886)
  2. Citizen’s Guide (minimum General Fund)
  3. Performance Dashboard
  4. Debt Service Report (all funds)
  5. Projected Budget Report (minimum General Fund)

Please visit http://www.michigan.gov/treasury/0,4679,7-121-1751_2197_58826_62393_62406—,00.html for the required certification form and available templates.

If Treasury does not receive ALL of the above documents by 11:59 pm on December 1, 2015, your local unit will not qualify for the full CVTRS/CIP payment amount available.

Submissions can be emailed to TreasRevenueSharing@michigan.gov, faxed to 517-335-3298, or mailed to:

Michigan Department of Treasury

Office of Revenue and Tax Analysis

P.O. Box 30722

Lansing MI  48909

Email Submissions

If the required documentation is submitted via email, please take note of the information below:

  1. Prior to submitting the documentation:
    1. DOUBLE CHECK THE EMAIL ADDRESS to ensure that the address has been typed correctly.  If the email address is typed incorrectly, Treasury will not receive the submission and the local unit will not qualify for a payment.
    2. DOUBLE CHECK ATTACHMENTS to ensure that all the required documentation has been attached.  If all the documentation is not submitted (by the due date), the local unit will not qualify.
  1. After Submitting the documentation:
    1. Within two business days of Treasury receiving your email, YOU WILL RECEIVE AN EMAIL REPLY stating the submission has been received.  Starting November 23, 2015, Treasury will provide the email reply within four business hours.
    2. IF A RESPONSE EMAIL IS NOT RECEIVED from Treasury within the above time frames, contact Treasury at 517-373-2697 to verify that the submission has been received.
    3. Upon a review of the documentation at a future date, Treasury may request additional information to ensure a local unit’s compliance with 2015 Public Act 84.

For reference, attached is Treasury’s CVTRS Detailed Guidance for cities, villages, and townships and Treasury’s CIP Detailed Guidance for counties.

If you have any questions, please feel free to contact our office at 517-373-2697.

Thank you.

Office of Revenue and Tax Analysis

Michigan Department of Treasury

517-373-2697

 

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

Senate Committee Reports Bill To Expand Recreation Authorities

Michigan Municipal League members, including Big Rapids Mayor Mark Warba (right), testified in Lansing recently on an issue facing park and recreation authorities.

Michigan Municipal League members, including Big Rapids Mayor Mark Warba (right), testified in Lansing recently on an issue facing park and recreation authorities.

Working in conjunction with officials from the City of Big Rapids, the League was successful in getting Senate Bill 481 (Booher) reported from the Senate Local Government committee earlier this week.

The bill, modeled on similar legislation from previous sessions, would expand the definition of an eligible municipality to include a school district.

This change would allow a city, village, or township to partner with a school district to form a recreation authority allowing broader access to recreation programming and facilities throughout a region.

Big Rapids Mayor Mark Warba (left) testifies in Lansing.

Big Rapids Mayor Mark Warba (left) testifies in Lansing.

Language was added in this bill to address concerns raised previously about the need to clarify the appropriate use of any funds raised by an authority that included a school district.

Following a committee hearing in which Big Rapids city and school officials testified in support of the bill, the committee voted the bill out to the full Senate for consideration once they return from break in December.

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

Treasury Distributing First Major PPT Reimbursements

Most Michigan Municipal League member cities have received Personal Property Tax (PPT) distribution checks in the mail in the past week. These reimbursement checks are the first amounts cities are receiving for operating mills under the PPT reform voters approved in a statewide referendum in August of 2014 and are being distributed by the Local Community Stabilization Authority (LCSA), which is a new creation under the Act.

As one of the first implementation phases under the new law, cities with a positive small taxpayer exemption loss are eligible to be reimbursed for their 2014 and 2015 personal property tax loss from millage not used to pay debt.  On October 20, 2015, Treasury certified a partial distribution of $15,736,006 to 214 cities. This distribution reflects 100 percent reimbursement of 2014 and 2015 operating millage less amounts reimbursed to TIF plans for city millage and amounts previously reimbursed to cities under the Act for debt loss.

In addition to this 100% reimbursement, the LCSA also has an additional $3,463,994 available to distribute to these eligible cities. Once all other data related to each city’s 2014 and 2015 debt loss is compiled, these additional dollars will be certified by Treasury to the LCSA for distribution. This additional distribution to cities stems from the design of the proration formula contained in the new law and represents payment in excess of 100 percent reimbursement. This extra payment will be finalized and distributed by early December of this year.

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