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.

 

 

Dark Store / Big Box Retail Assessment Legislation Introduced

Two pieces of legislation were introduced this week that would help communities facing tax assessment appeals by big box retailers.  The League has been working closely with bill sponsors, State Sen. Tom Casperson (R-Escanaba) and State Rep. John Kivela (D-Marquette) to craft Senate Bill 524 and House Bill 4909 and soliciting bi-partisan support from the rest of the Upper Peninsula delegation, including State Reps. Scott Dianda (D-Calumet) and Ed McBroom (R-Vulcan), and many others.  These two bills are modeled on legislation recently passed and signed into law in Indiana and are aimed at clarifying true cash value determinations.  The legislation defines large-scale commercial retail property and the circumstances under which similar large-scale commercial properties can be used for sales comparison purposes.  The legislation also excludes consideration of some negative use deed restrictions from the sales comparison calculation as the trend grows by retailers using these types of deed restrictions to appeal their assessments claiming that these self-imposed deed restrictions have lowered the value of their property.

The League is working in conjunction with the Michigan Association of Counties and the Michigan Townships Association to advocate for this legislation.  The bills have been referred to the Senate Finance and House Tax Policy committees, respectively.  We are working with those committees to secure hearings on the legislation in the near future.

Please let your legislators know how important it is to address this issue and let us know if you have any questions.

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

 

Act 51 Compliance Requirements Due September 30th

Act 51 compliance requirements are due September 30th as a result of changes that were made to the compliance requirements of Public Act 51 of 1951, Section 18j, MCL 247.668j related to funding from the Michigan Department of Transportation for roadways within local units of government.

To comply, by September 30, 2015, a certificate regarding the compensation plans for your local transportation employees must be completed, signed, submitted to the State Department of Transportation and posted on your municipal website. MDOT has summarized the compliance requirements in FAQ form.

If this form is not submitted by September 30th MDOT may withhold Act 51 funding for non-compliance.

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.

Treasury Provides Updated PPT Reimbursement Form

This afternoon Treasury provided the updated Form 5192, for claiming small taxpayer exemption personal property loss reimbursement for a millage levied in July 2015 used to pay debt.  Reimbursement requests are due to Treasury by August 14, 2015.

The form is available at: http://www.michigan.gov/documents/taxes/5192__07-15_fillable_July_2015_494424_7.pdf

with a link to the form available on Treasury’s main Personal Property Tax page: http://www.michigan.gov/taxes/0,4676,7-238-43535_53197-316719–,00.html

Please contact Treasury’s Office of Revenue and Tax Analysis at 517-373-2697 with any questions.

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

Local Election Results Show Voters Support Essential Local Services, Better Communities

A road crew fills potholes in Macomb County.

A road crew fills potholes in Macomb County.

(Go here to view the League’s statement on the defeat of Proposal 1)

Not to be lost in the overwhelming defeat of Proposal 1 last night, is the success of a majority of local ballot questions that also went before voters in Tuesday’s election. The results show voters are willing to support essential services that contribute to a community’s vibrancy.

According to MIRS news service, of the more than 200 questions on local ballots statewide nearly 70 percent were approved. In particular, voters approved nearly 70 percent of the school-related ballot proposals and 78 percent of the proposal dealing with police, fire and emergency services.

View a spreadsheet on the MIRS report here. View the subscription-only MIRS article on the local election results here under the headline “Local Road Proposal Approvals Go 50%, New Money Asks for Roads 21%”.

The local election results also are consistent with the findings of an EPIC-MRA survey co-commissioned by the League. The poll, which you can view here, found that a majority of voters who opposed the Proposal 1 ballot question want the Legislature to get back to work and pass a plan that fixes roads with new revenues. The poll shows that voters did not want major cuts to essential services that make our communities strong and liveable – namely schools, communities and police and fire protection.

Here are some key findings in the EPIC-MRA poll:

  • A strong majority of voters want the Legislature to get back to work now and fix the roads;
  • They are willing to support higher taxes as long as they money goes only to transportation, and they oppose major cuts to K-12 education, higher education, revenue sharing and healthcare to find the money to fix the roads;
  • 64 percent polled “strongly favor” or “somewhat favor” a 1-cent increase in the state sales tax to fix the roads, as long as the new revenue from the penny increase is guaranteed in the constitution for roads, bridges and transportation;
  • 88 percent oppose “major cuts” to K-12 education to pay for roads;
  • 76 percent oppose “major cuts” in revenue sharing for local communities;
  • 63 percent opposed “major cuts” to universities and community colleges;
  • 85 percent support the Legislature working all summer to pass a new roads plan.

The poll also found that the Legislature’s job approval rate sunk to just 27 percent (with only 1 percent giving the Legislature an “excellent” rating). That’s reflected in the constant complaint we’ve heard that the Legislature should have come up with a road solution itself instead of sending it to the voters.

A fire truck makes an emergency run over crumbling roads in Macomb County.

A fire truck makes an emergency run over crumbling roads in Macomb County.

Of note, the poll found that Governor Snyder’s approval rating is an all-time high – 52 percent positive job approval. The Governor has been an exceptionally strong leader on fixing our roads and the League was especially pleased with his statement issued following Proposal 1’s defeat last night. The statement, with the subheadline, “A plan must improve roads without hurting schools, communities,” explains that fixing the roads remains a top priority for the governor and that a new solution should be one that gives “Michigan residents the safe roads they need and deserve and helps our growing economy.”

The League pledges to continue working with governor and the Legislature on a new plan that will fix our roads and bridges while protecting those services essential to Michigan’s families, communities and economy. Like Michigan voters, we do not believe the state can cut our way to prosperity.

There will be much debate in Lansing in the coming days, weeks and possibly months over the next step to fixing our roads. Please stay tuned to this Inside 208 legislative blog for the latest developments. We may also call on you as various plans surface and gain momentum. So please be ready to contact your lawmakers when asked.

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