Governor’s Budget Proposal Includes Major Investments in Local Government

The Whitmer Administration unveiled its proposed Executive Budget Recommendation on Wednesday for the upcoming 2022-23 Fiscal Year that starts October 1st.

The budget recommendation totals $74.1 billion, including a historic $14.3 billion in General Fund dollars, compared to the current year’s $11.7 billion…the highest GF budget proposal in recent history.  Over 40% of the budget proposal consists of federal funds from the state’s American Rescue Plan Act funding and expected Infrastructure Investment and Jobs Act revenues.  The proposal still leaves over $2 billion of General Fund balance available for additional spending discussions, along with a still to be determined amount of unallocated ARPA and IIJA funds that will be the subject of ongoing supplemental appropriation negotiations outside of this budget process.

The budget presentation made before a joint session of the House and Senate Appropriations committees provided specifics on the Governor’s previously announced spending priorities, with spending focused on education, public sector employment recruitment, retention and HERO pay, elimination of the state income tax on retirement income ($107 million cost in 2023 and $495 million per year by 2025), and increasing the state’s Earned Income Tax Credit from 6% of the federal credit up to 20% (costing $262 million in FY23).  Briefing papers on many of the Administration’s key initiatives can be viewed here.

Major spending proposals that support local governments were prevalent throughout the budget proposal, with the centerpiece being a 10% increase in statutory revenue sharing.  This $26.6 million increase would be the largest single-year increase in recent history and would result in the highest funding amount since 2011, but still not fully recovered from the $100 million Executive Order cuts enacted that year.  The recommended increase would be split 5% into the ongoing base and 5% would be labeled as “one-time”.  In addition to the revenue sharing increase, the Governor responded to the League’s request for assistance in holding communities harmless from any clawback in the Constitutional, per capital revenue sharing payments due to the delay in receiving their 2020 census population numbers.  The Governor has proposed spending $50 million to ensure that no city, village, or township with a declining population will see additional reductions from a clawback of overpayments because of the delay in the release of census numbers and Treasury paying communities for the past 14 months based upon their 2010 population numbers.  The budget proposal recommends this $50 million be appropriated in the current budget year to avoid any per capita payment adjustments scheduled to occur in April of this year.  The Treasury budget recommendation also includes a few other spending items that support local governments:

  • $40 million for Local Community Transition Support (general fund) to provide aid to communities that have experienced significant economic impacts from the departure or disinvestment of large-scale employers and their workforces from their communities. Funding will support various economic or community development activities, including rehabilitation, demolition, or adaptive re-use of vacant buildings, various support and recruitment and retention activities for new or existing small businesses, local community business incubator programs, and outdoor space enhancement projects.
  • $50 million for First Responder Retention Payments (general fund and ARP – state fiscal recovery funds) to state and local law enforcement and public safety personnel who have performed hazardous work related to the COVID-19 pandemic. Funding is recommended in a fiscal year 2022 supplemental and includes $30 million general fund and $20 million federal American Rescue Plan resources announced as part of the Governor’s proposed MI Safe Communities framework.
  • $20.6 million Increase for Existing Recreational Marihuana Grants (restricted funds) to counties and municipalities in which a marihuana store or microbusiness is located. These payments are required under the Michigan Regulation and Taxation of Marihuana Act, Initiated Law 1 of 2018, and are based on the most recent recreational marihuana revenue projections and total $50.6 million for fiscal year 2023.

Significant, community-focused investment programs can be found throughout the remainder of the proposed budget, many of which match up with Municipal League funding priorities and specific funding requests, including major investments in infrastructure.  The League issued this media statement on Wednesday’s presentation, recognizing the numerous areas of the budget that focus on investing in our communities.

The following spending proposals will be of particular interest to municipalities and were been pulled from the FY23 Executive Budget Book that was released Wednesday:

Environment, Great Lakes, & Energy –

  • $251.7 million for Water Infrastructure Projects ($36.4 million general fund) to provide loans, grants, and direct funding to local communities for water infrastructure. These projects are supported through the federal Infrastructure Investment and Jobs Act (IIJA) and include service line replacements, water treatment facility upgrades, and stormwater management systems.
  • $69.3 million for Contaminated Site Clean-up ($20.2 million general fund) to provide resources for revitalizing and redeveloping sites of historic and industrial contamination in the state. This investment will also support a rapid response fund to deploy resources for sites outside the scope of normal contamination clean-up efforts.
  • $48 million for Community Support for Lead Line Replacement and Water Treatment System Upgrades (general fund). This program will provide grants for technical, managerial, and financial assistance to communities throughout the state to ensure that projects are implemented effectively and efficiently. Grants will prioritize disadvantaged communities.
  • $34.3 million for Highwater Infrastructure Grants (general fund) to provide local communities with grants for high water level and resiliency planning and infrastructure needs. This program continues past efforts to ensure that communities are provided the resources needed to address issues like coastal erosion, flooding, transportation networks, urban heat, and storm water management.
  • $23 million for Energy Efficiency Grants (federal fund) to provide grants and financial support to local communities and businesses for the implementation of energy efficiency infrastructure and policies. This program is supported with federal IIJA funds and will provide community support through grants, state-backed loans, and direct project implementation.

Labor & Economic Opportunity –

  • $200 million for the Michigan Regional Empowerment Program (general fund) to support the growth, development, diversification, and resiliency of regional economies through a competitive grant program. Grants will support projects that leverage partnerships and make investments that provide long-term sustainable economic benefit to the local region and the state as a whole. Grants may be used to support a wide range of transformational projects including those focused on affordable housing, broadband, manufacturing, education and workforce development, and other areas specific to local regional needs.
  • $11 million for the Attainable Homeownership and Apprenticeship Program (general fund) to support the acquisition, renovation, and resale of properties in both urban and rural land bank inventories, increasing access to attainable housing while expanding apprenticeship training opportunities by requiring paid apprentices on each home renovation site.
  • $10 million for the MI Local Heroes Marketing Campaign (general fund) to conduct a comprehensive statewide marketing campaign that highlights the benefits of public sector employment and attracts more individuals to critical jobs like nurses, teachers, police and firefighters.
  • $750,000 for the Resilient Lakeshore Heritage Grants Program (federal funds) for a grant program that will support the rehabilitation of qualifying properties in rural communities along the Great Lakes.

Transportation –

  • In total, the Governor’s fiscal year 2023 recommended budget reflects a $1.1 billion increase for transportation over the current fiscal year. This includes $578 million of projected new funding under the federal Infrastructure Investment and Jobs Act (IIJA), as well as $481 million of state restricted and general fund support for transportation. An accompanying fiscal year 2022 supplemental request also includes $475.7 million of new federal IIJA authorization. Over the next five years, Michigan is projected to receive more than $2.6 billion in new federal IIJA transportation funding, as compared to the prior federal authorization act.
  • An additional $488.6 million for Road and Bridge Construction to support state and local roads, highways, and bridges, over $94 million will go towards an estimated increase for local roads and bridges. The total increase reflects an additional $377.8 million of federal IIJA funding, with the remaining $110.8 million attributable to net increases in baseline state restricted revenues.
  • $150 million for Road Improvement Projects that are economically critical, carry high traffic volumes, increase the useful life of key local roads, or will be completed in conjunction with important bridge replacement projects to minimize the impact to motorists and businesses.
  • $66 million to make State Transportation Infrastructure more resilient to future flooding events by adding reliable generator backup power to all 164 state-owned pumping stations. This investment is intended to address the significant freeway flooding events that have impacted southeast Michigan communities and disrupted important economic corridors in that region during recent storm events.
  • $60 million to support Rail Grade Separation Projects at key congested local rail crossings that impede efficient movement of commercial and passenger vehicles and jeopardize timely public safety response in an emergency.
  • The Governor’s recommendation includes $100.8 million of new support for local and intercity transit and $31.5 million for passenger and freight rail improvements. An accompanying fiscal year 2022 supplemental request also adds $10 million in federal grant funding to support construction of a new Detroit passenger rail and intercity bus terminal.

While seeing these items identified by the Governor is encouraging, this is just the first step in the state budget process.  Now that the budget has been presented, the Legislature will begin their deliberation of the proposals and will craft their individual versions of a Fiscal Year 2023 budget.  Details of the Legislature’s view on these recommendations will become evident over the course of the coming weeks, with initial drafts from each chamber expected around the Spring Break/Easter timeline, followed by refinements that will take place after the May Consensus Revenue Estimating Conference, with a target to finish negotiations by the end of June.

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

Treasury Issues Final Reminder for December 1st Revenue Sharing Certification Submissions

Earlier today, the Michigan Department of Treasury circulated a list of the local units that have not submitted all of the required CVTRS documentation (as of Nov 29th 6:30 PM).

The list can be downloaded here: FY 2022 Missing CVTRS 11-29-21 630PM

Treasury staff emailed all local units early last week reminding them of the 12/1/2021 deadline and called all of the outstanding local units last Wednesday.  Treasury staff were conducting another round of calls Tuesday afternoon.

Cities, villages, townships, and counties are required to submit Form 4886 by 12/1/2021 in order to remain eligible for bi-monthly statutory revenue sharing payments. Late filings will result in forfeited payments.  The full Treasury webpage for City, Village, & Township Revenue Sharing (CVTRS) can be viewed here.

Local units are encouraged to contact Treasury’s revenue sharing staff if they have questions on their certification submission through email TreasRevenueSHaring@michigan.gov or by calling 517-335-7484.

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

Governor Signs State Budget – Local Governments See Numerous Wins

Update: View excel spreadsheet detailing bridge appropriations.

The conference reports on Senate Bill 82 and House Bill 4400 were signed yesterday, one week after the Legislature sent the record-setting state spending plan for Fiscal Year 2021-22 to her desk.  This budget, which takes effect October 1st,  appropriates nearly $70 billion overall with nearly $12 billion from General Fund revenues.  Additionally, the budget agreement includes another $2 billion in spending for the current FY20-21 fiscal year, mainly from available federal stimulus funds.  While most of the revenue for this budget agreement comes from available state revenues, about $700 million of American Rescue Plan Act funds were appropriated to fund additional programs and grants between the current and coming fiscal year.  Beyond this budget, the state still has nearly $5.8 billion in federal ARPA stimulus funds they have yet to appropriate, along with over $2 billion in General Fund balance they have available to spend.  A string of supplemental budget appropriation bills are expected over the course of this fall that will focus these remaining funds into specific topics like water and sewer and economic development.

While the budget agreement represents a significant development from a relationship standpoint between the Governor and Legislature, there were a few areas of disagreement in the budget boilerplate language that the Governor called out in her transmittal letter to the House and Senate, accompanying her signature on the plan.  While few spending lines appear to have been vetoed, the Governor did weigh in on approximately 40 different boilerplate directives that the Legislature had included in the overall budget.  Many of the items she declared “unenforceable” were tied back to concerns about the language violating the separation of powers between the Executive and Legislative branches and issues of amendment by reference.

While the Governor did declare unenforceable a series of references to mask orders related to child care facilities and local public health department orders, she did not weigh in on language that was inserted in every departmental budget section related to prohibiting COVID-19 vaccination requirements.  Language in the General Government budget, which controls spending by the Michigan Department of Treasury for items like revenue sharing (found in Section 225 on page 95 of the conference report) specifically states:

Sec. 225. (1) Any department, agency, board, commission, or public officer that receives funding under part 1 shall not:
(a) Require as a condition of accessing any facility or receiving services that an individual provide proof that he or she has received a COVID-19 vaccine except as provided by federal law or as a condition of receiving federal Medicare or Medicaid funding.
(b) Produce, develop, issue, or require a COVID-19 vaccine passport.
(c) Develop a database or make any existing database publicly available to access an individual’s COVID-19 vaccine status by any person, company, or governmental entity.
(d) Require as a condition of employment that an employee or official provide proof that he or she has received a COVID-19 vaccine. This subdivision does not apply to any hospital, congregate care facility, or other medical facility or any hospital, congregate care facility, or other medical facility operated by a local subdivision that receives federal Medicare or Medicaid funding.
(2) A department, agency, board, commission, or public officer may not subject any individual to any negative employment consequence, retaliation, or retribution because of that individual’s COVID-19 vaccine status.
(3) Subsection (1) does not prohibit any person, department, agency, board, commission, or public officer from transmitting proof of an individual’s COVID-19 vaccine status to any person, company, or governmental entity, so long as the individual provides affirmative consent.
(4) If a department, agency, board, commission, subdivision, or official or public officer is required to establish a vaccine policy due to a federal mandate, it must provide exemptions to any COVID-19 vaccine policy to the following individuals:
(a) An individual for whom a physician certifies that a COVID-19 vaccine is or may be detrimental to the individual’s health or is not appropriate.
(b) An individual who provides a written statement to the effect that the requirements of the COVID-19 vaccine policy cannot be met because of religious convictions or other consistently held objection to immunization.
(5) As used in this section, “public officer” means a person appointed by the governor or another executive department official or an elected or appointed official of this state or a political subdivision of this state.

The Governor’s transmittal letter interprets this language as providing “a roadmap for public employers to ensure their employees either receive the safe and effective COVID-19 vaccine or undergo regular testing to keep their co-workers safe. It also avoids any conflict with federal law, recognizing that federal authorities may issue vaccination requirements.”  This last comment appears to be in reference to forthcoming US Department of Labor rules that would align with the President’s recent call for vaccination or testing requirements for large employers.  This language is still being evaluated, especially in light of the potential costs related to implementing a stringent testing program at the local government level.

When reviewing the 964 page state operating budget document and the related 179 page House Fiscal Agency summary there are a number of key items of interest to municipalities and some significant victories for local government:

Overall, there is a $500 million deposit into the state’s Budget Stabilization Fund

Statutory Revenue Sharing will see a 2% ($5.2M) increase added into the overall base for cities, villages, and townships.

MML advocacy also helped to successfully restore $433,000 for more than 100 local units that were forced to return the federal CARES funding they received in August of 2020 as replacement for the state budget elimination of the August revenue sharing payment last year

Additionally in Treasury, the legislature approved the Governor’s recommendation for a $5M grant program to assist local governments with training and recruitment of first responders.  $3M was included to increase funding for the Michigan Infrastructure Council and $16M was added to fund infrastructure enhancements for E-911 systems.

Key funding items in other state departments:

Environment, Great Lakes, and Energy –

  • $15M for drinking water emergency assistance related to contamination response
  • $14.5M PFAS contamination remediation for water systems
  • $10M contaminated site clean up
  • $10M lead service line replacement and drinking water safety improvements in the City of  Benton Harbor
  • $19M for public and private dam safety and emergency response grants
  • While funding for the Governor’s MI Clean Water Plan was not included in this budget, it is expected that a larger water/sewer/storm water spending plan will be proposed from available ARPA funds this fall.

Labor and Economic Opportunity –

  • $100M of ARP funds for Community Revitalization Program and Placemaking grants to local units (identified blight and historic rehab projects in downtowns and outdoor dining and social district investments)
  • $1.5M increase in arts and culture grants funding
  • $3.5M increase in the Rural Jobs & Capital Investment Fund
  • $48M for 25 targeted local infrastructure grants across the state
  • $147M for 175 distinct local “enhancement grants” in communities statewide

Dept of Technology, Management, & Budget –

  • $20M for Cybersecurity

Dept of Natural Resources –

  • $7M of available federal funds for local recreation lands and facilities through Land & Water Conservation Fund payments

Michigan State Police –

  • $45M of federal funds for disaster and emergency response activities
  • $2M one-time increase to secondary road patrol grants
  • $500,000 to provide de-escalation training for law enforcement officers

MI Dept of Transportation –

  • $52.8M increase to the MTF for local road funding from full implementation of the $600M road plan income tax earmark
  • $12.8M restoration of last year’s cuts to the Transportation Economic Development Fund
  • $3M restoration of last year’s cuts to local bus transit operating support
  • $5.6M increase to state rail programs

Beyond the funding for the coming fiscal year, over $2 billion dollars was added to the current year (FY21) budget

  • $150M ARP deposit into the Unemployment Insurance Trust Fund
  • $168M from GF and Federal funds into the Water State Revolving Funds to fund loan demand for local water pollution control facilities
  • $121M of ARP funds for a Homeowners Assistance Fund within LEO that will support housing needs – includes utility payments and delinquent property taxes
  • $36.3M of federal funding for Low Income Household Water Assistance support through DHHS
  • A series of line items within MDOT from available December 2020 federal stimulus funds –
    • $196M local bridge bundling program – will allow for repair/replacement of 100 local bridges across Michigan. View excel spreadsheet detailing bridge appropriations.
    • $68M for Michigan’s 15 primary airports
    • $2M for Michigan’s general aviation airports
    • $65M for local road & bridge programs
    • $55M for local/rural transit agencies
    • $3.3M for the intercity bus program

With the signing of the budget, leaders will now turn their attention to appropriating the remaining American Rescue Plan dollars, available state General Fund revenues that continue to come in above revenue estimates, and any additional federal revenue that may result from the federal budget reconciliation process and/or the Infrastructure and Jobs Act discussion in Washington, DC.  The League’s State & Federal Affairs team will be extremely active in these upcoming budget discussions, pushing areas of priority for League members, like housing, community development, and additional support for local budgets and services.

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

Legislature Breaks Without Finishing GF Budget

The Legislature recessed for at least two weeks earlier this week without finalizing a General Fund budget and without allocating any of their remaining GF fund balance or available American Rescue Plan Act funds.  A school aid budget was completed and sent to the Governor in HB 4411, but the House’s attempt at a baseline/continuation budget in HB 4410 and the Senate’s response that simply funded revenue sharing and a couple of DHHS line items remained unresolved by the time each chamber had adjourned.

While revenue sharing was not completed before they recessed, both chambers provided a 2% statutory revenue sharing increase ($5.2 million) in their different versions.  The Senate proposal also included a League-requested $433,000 to restore the August 2020 revenue sharing cut for dozens of League members that were unable to utilize the federal CARES funding that was offered as a replacement for that cut.  The Senate proposal and a different House proposal in SB 27 also offered a $10 million appropriation to provide relief to communities impacted by the severe storms that occurred in June.

While not completed this week, these items are all expected to resurface in a full budget negotiation that is expected to proceed between the Administration and legislative leaders in the coming weeks.  Those negotiations will likely determine when the House and Senate return to action to vote on a budget deal.  At this time, the House and Senate are scheduled to return for session days on; July 14 in the House, July 15 in the House and Senate, July 21 in the House, and July 27 in the Senate. While these days are currently scheduled, the success of ongoing budget negotiations will likely determine which, if any, of these days are utilized.

The League continues to advocate for improvements in revenue sharing funding, support for municipal infrastructure repairs necessitated by shoreline erosion, substantial state investments in water and sewer infrastructure similar to the Governor’s MI Clean Water Plan and the Senate proposal in SB 565, and state funding for replacement of local bridges as proposed in different versions by the Governor and legislative leaders, among a host of other spending priorities.

In addition to their work on the various Departmental budgets, the Governor and Legislature are also debating priorities for allocating the state’s first ARP allocation of $3.25 billion.  The League and our partners are pressing for leaders to agree on a comprehensive spending plan for these dollars that will provide local governments with additional opportunities to invest in their communities and leverage the dollars that they have available for greater impact on infrastructure, building local capacity, improving housing and community development, and promoting local economic development efforts.

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

 

Legislature Preps Competing Versions of State Budget

Since their return from Spring Break last month, the House and Senate budget subcommittees have been working to finalize their respective versions of the state budget for every state department and program for the upcoming FY21-22 state fiscal year.  Those budget subcommittees recently released their proposed spending plans and they are now being considered by the full Appropriations committees in each chamber before they will cross to the opposing chamber for further consideration and conference committee discussions, which are expected following the state’s May Consensus Revenue Estimating Conference scheduled for Friday, May 21st.  These House and Senate proposals are being developed in response to the Governor’s Executive Budget recommendation released earlier this year.

The League has been extremely active on a number of key state budget components, especially revenue sharing and transportation funding, among other municipal priorities.  None of the proposed budget versions described below have been negotiated with the other chamber or with the Whitmer Administration and a final budget agreement, expected prior to the summer recess, will look extremely different as all three sides negotiate for their priorities.

In the House:

The General Government budget for FY 21-22 funds a number of state departments, including revenue sharing and the Treasury department and the Labor & Economic Opportunity department (MEDC) spending. This spending proposal is being developed within House Bill 4398.

  • The House proposal provides a 1% increase ($2.6M) to statutory revenue sharing as opposed to the Governor’s recommendation for a 2% increase ($5.2M).
  • The House language would also require any increased CVTRS revenue sharing a community received that is “underfunded” on their pension system to spend any increase from revenue sharing on their pension system.
  • Additionally, the House has added new language that would require all cities, villages, townships, and counties to maintain the same level of public safety funding as their prior budget had expended as a condition for receiving statutory revenue sharing.
  • Following a League request, the bill does include $290,000 to restore August revenue sharing payment losses for any community that was unable to utilize the CARES funding they received as a replacement for the stricken August CVTRS payment last year.  Also included is a $245,000 line item that we had requested to provide for a restoration of any forfeited revenue sharing payments due to a community missing the December 1, 2020 “dashboard” reporting and certification requirement, so long as the certification was submitted by February 1, 2021.
  • The Governor’s recommendation of $40M for shoreline erosion grants for the coming budget year were referenced in this bill with a $100 placeholder amount.  As an alternative approach, the House did propose funding that $40M in recommended spending for shoreline erosion in their current year budget supplemental proposal (HB 4420) which is outlined later in this article.
  • The House version did not include the Governor’s recommended $5M recommendation for grants to local units for recruiting and training first responders.
  • This bill does also not include the Governor’s recommendation for $10M to be deposited into MSHDA’s Housing and Community Development Fund and reduces the Business Attraction and Community Revitalization line items by $5.9M.
  • The House version does insert an additional $500,000 into the Rural Jobs and Capital Investment Fund for a total line item of $1.5M.

The House proposal for the Michigan Department of Transportation budget is outlined in House Bill 4409.  While the overall revenue available to the State Trunkline Fund is expected to stay relatively flat for the coming year, balancing lower gas tax and vehicle registration fee revenue against the full $600M earmark from the state income tax and expected higher federal aid opportunities, the following items are important for local road agencies:

  • Local road agencies are estimated to receive an additional $52.8M through their PA 51 distribution.
  • The House version agrees with the Governor’s recommendation to restore $12.8M to the Transportation Economic Development Fund and a $3M restoration to transit agencies through the Comprehensive Transportation Fund.
  • The House adds a $226M line item aimed at local road and bridge repair and replacement, and a new program funded with $374M designed to repay existing transportation bond debt.

The House Environment, Great Lakes, & Energy Department budget proposal for next year (HB 4397) did include the Governor’s recommendation of $15M for responding to dam safety emergency issues, but the House did not fund the $20M one-time recommendation for contaminated site clean-ups or the Governor’s $290M MI Clean Water Plan proposal.  The House also included a one-time allocation of $25M for PFAS clean-up and other emerging contaminates.

In the Senate:

Their General Government budget proposal is included in Senate Bill 82

  • The Senate proposal agreed with the Governor’s recommendation on statutory revenue sharing by funding a 2% ($5.2M) CVTRS increase.  Additionally, the Senate builds this 2% directly into the CVTRS base, where the Governor’s recommendation had this 2% increase listed as one-time.
  • The Senate maintained the current requirement that any CVTRS increase amount must be dedicated to an unfunded pension liability for any community identified as “underfunded” under PA 202.
  • Based upon the League request, the bill also includes $433,000 to restore August revenue sharing payment losses for the more than 100 cities, villages, townships, and counties that were unable to utilize the CARES funding they received as a replacement for the stricken August CVTRS payment last year.
  • The Senate did not include the Governor’s $5M recommendation for local first responder recruitment and training grants, but they did include a $50M 100% matching grant program for any community with a pension system funded at less than 40% that makes an accelerated payment towards that unfunded liability.

In the Senate LEO budget for the coming year (SB 85) the Governor’s recommendation for $10M in MSHDA’s Housing and Community Development Fund was not included.  The subcommittee did recommend an additional $15M for Pure Michigan and increased Arts and Cultural grants by $1.5M above the Governor’s recommendation.

In their EGLE budget proposal (SB 91), the Senate subcommittee included $15M for dam safety and put $10M towards high water and shoreline erosion grants, but declined to fund the $290M MI Clean Water Plan or the $20M recommendation for contaminated site clean-up.

The subcommittee recommendation for the MDOT budget is detailed in SB 92. The Senate included the Governor’s recommendation for increasing local road fund through the MTF by $52.8M and supported the restoration of last year’s cuts to the TEDF ($12.8M) and transit agencies within the CTF ($3M).

 

In addition to the work on the budget for the upcoming state fiscal year, each chamber is discussing competing proposals to spend portions of the December federal stimulus funding and the recently passed American Rescue Plan Act stimulus.  These supplemental budget appropriations would apply to spending in the current state fiscal year and represent very different approaches from the two chambers.  The Administration has issued their recommendations for the spending of the December federal stimulus, but await forthcoming US Treasury guidance before making detailed ARPA spending recommendations.

The House has two General Fund related supplemental budget bills on the House floor awaiting further action.  House Bills 4419 and 4420 propose approximately $6 billion in new, non-education spending for the current budget year.  Highlights from the two House bills that would impact local governments include:

  • HB 4419 would pass through the anticipated $686M in ARPA funds that are designated for the “non-entitlement” local units of government.  Pending the disbursement of those funds from the federal government to Michigan.
  • The bill also includes $103M in federal LIHEAP funding, $378M from the December stimulus proposal for rental and utility assistance and housing stability services, $68M for airports, $65M of federal funds for local road agencies, and $76M for rural transit agencies.
  • HB 4420 moves federal dollars into a number of state GF/GP line items to free up those GF/GP dollars.  The bill then appropriates those state GF dollars into a host of different programs and lines.
  • This bill puts $350M into the state’s rainy day fund.  It directs $40M into high water and shoreline erosion grants and $25M for PFAS remediation and $25M for contaminated site cleanup grants.
  • The bill fully funds the state’s Flint water settlement, appropriating $595M versus the annual $35M bond debt service that is currently planned.  Along the same lines, the bill invests $74M into State Trunkline Fund bond repayment and another $626M into a new Transportation Bond Repayment Sinking Fund.
  • Additionally for infrastructure, this bill would spend $250M for natural gas infrastructure expansion, $150M for broadband expansion, $250M for water and sewer replacement grants, and $300M for local road and bridge replacement and repair.

The Senate’s supplemental budget bill for the current year (SB 36) focuses mainly on appropriating the remaining December federal stimulus funds.  The only ARPA dollars in this bill are related to anticipated day care funding the state expects to receive from the March federal bill.  This bill is also on the Senate floor awaiting further action.

  • SB 36 appropriates the $378M federal emergency rental and utility assistance dollars allocated to Michigan.  $46M of additional FEMA disaster assistance.
  • Of the transportation funds the December stimulus allocated to Michigan, the Senate proposes a statute change that would allow all of the dollars coming into Michigan to be distributed solely to cities, villages and counties.  Under this proposal, cities and villages would receive $93.5M and counties would get $167.8M.  State trunklines would not receive any of these stimulus dollars.

 

With additional federal guidance on ARPA expected in the next week and the state’s May revenue estimating conference scheduled for later this month, most of the upcoming budget activity will likely focus on positioning the budget and supplemental bills for final negotiations between legislative leadership and the governor.

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

Treasury Announces Grant Period For Financially Distressed Communities

Treasury: Grants Available for Financially Distressed
Cities, Villages and Townships

Money for Special Projects to Free Up
Funds for Important Services

LANSING, Mich. – Cities, villages and townships experiencing financial struggles can now apply for a grant to help fund special projects and free up tax dollars for important services, according to the Michigan Department of Treasury.

Applications are now being accepted for the Financially Distressed Cities, Villages and Townships (FDCVT) Grant Program. Municipalities interested in applying for an award must submit applications to the state Treasury Department by 11:59 p.m. on Monday, May 17, 2021.

All cities, villages and townships experiencing at least one condition of “probable financial distress” as outlined in the Local Financial Stability and Choice Act are eligible to apply for up to $2 million. A total of $2.5 million in funding is available for the state Treasury Department to award through the FDCVT Grant Program for the 2021 fiscal year.

Grant funding may be used to pay for specific projects or services that move a community toward financial stability. Preference will be given to applications from municipalities that meet one or more of the following criteria:

  • A financial emergency has been declared in the past 10 years.
  • An approved deficit elimination plan for the General Fund is currently in place.
  • Two or more conditions indicating “probable financial distress” currently exist.
  • The fund balance of the General Fund has been declining over the past five years and the fund balance is less than 3 percent of the General Fund revenues.

Due to requirements outlined under state law, school districts are not eligible for funds from this grant program.

For more information about the FDCVT Grant Program or to download an application, go to www.michigan.gov/revenuesharing.

 

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

Direct, Flexible Federal Aid For All Local Governments Signed By President

(Update: To help answer some of the many questions we’re getting from our members, NLC shared two additional documents – Estimated State and Local Allocation Spreadsheet Reference Guide and Notes on File Labeled “State and Local Allocation Output 02.25.21) In addition, NLC has established a Q&A portal for your ARP-related questions. They would also appreciate you sharing your ongoing challenges, successes and questions through this portal.)

Following the US House’s action early last week, concurring in the Senate’s changes from the previous weekend to H.R. 1319, the American Rescue Plan Act federal stimulus was signed at the end of the week by President Biden.

Following months of advocacy by the Michigan Municipal League and our partners at the National League of Cities, we were successful in securing a $350 billion provision for aid to state and local governments.  This appropriation includes $130.2 billion of direct and flexible aid for all 19,000 local units of government across the country, regardless of population.  This aid is split evenly between counties and municipalities, at $65 billion each.

Acknowledging the strict spending limitations and lack of support for most local governments from last year’s CARES Act, Congress and the President inserted this key provision in the American Rescue Plan Act following intense lobbying from NLC and countless meetings, calls, and emails from MML staff, leadership, and member communities to Michigan’s congressional delegation over the past year.

The aid to local governments in the bill is divided into two distribution formulas.  Due to the fact that the federal government has very limited experience providing direct aid to local units and the wide variance in local government structures among the each of the states, the aid to local governments will be split with $45.5 billion being sent directly from Treasury to municipalities generally viewed at “entitlement” communities under HUD’s Community Development Block Grant program formula that uses population, poverty, and housing instability to determine estimated allocations.  The remaining $19.5 billion will be sent to each of the states to distribute to their remaining local governments on a per capita basis. Dollars granted under this $19.5 billion allocation are capped at 75% of the municipality’s most recent budget as of January 27, 2020.  The federal language requires each state to send these dollars to their municipalities within 30 days of receipt, unless granted an extension.  Even under an extension, all of these dollars must be distributed within 120 days of receipt of the state will face a financial penalty.  States are prohibited from changing these allocations or imposing additional requirements. 

All of these dollars will be sent by the federal government in two, equal distributions.  The first is required to be disbursed within 60 days of the bill’s enactment and the second, one year after the first distribution.  Municipalities may use these funds through December 31, 2024.

The Department of Treasury will need to issue guidance detailing its interpretation and implementation of eligible uses, but the statutory language specifically authorizes the following uses of these funds:

  • To respond to the pandemic or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality;
  • For premium pay to eligible workers performing essential work (as determined by each recipient government) during the pandemic, providing up to $13 per hour above regular wages;
  • For the provision of government services to the extent of the reduction in revenue due to the pandemic (relative to revenues collected in the most recent full fiscal year prior to the emergency);
  • To make necessary investments in water, sewer, or broadband infrastructure

The language explicitly prohibits funds from:

  • Offsetting, either directly or indirectly, a tax cut made since March 3, 2021;
  • Being deposited into a pension fund.

Clear guidance from US Treasury will be critical to helping local governments determine eligible expenses, but there is no doubt that revenue backfill needed for Michigan’s cities impacted by lost income tax revenue, parking revenue, parks and recreation and event revenue, and the potential coming impacts from expected property tax appeals, among other revenue losses, will all be covered by the critical funding support.  In addition, the language allowing for the investment of these funds in water, sewer, and broadband infrastructure will provide our communities an opportunity to invest in infrastructure that has taken a back seat to other critical budget needs over the past decade.  These dollars provide a historic opportunity for local government to invest in its residents and small businesses and work with community partners and non-profits to promote community wealth building and lift up all areas within our communities.

Coupled with the aid the State of Michigan is estimated to be apportioned under the Act, the state and Michigan’s local governments (counties, cities, villages, and townships) are scheduled to receive approximately $10.3 billion of federal aid under this section. The State of Michigan is estimated to receive approximately $5.655 billion and Michigan local governments an estimated $4.4 billion split between counties ($1.937 billion), metropolitan cities utilizing the modified CDBG formula ($1.782 billion), and all other cities, villages, and townships ($686 million).  The National League of Cities has posted a link to the Congressional committee estimates of the distributions by community in each state.  It should be noted that these figures are purely ESTIMATES developed by congressional staff utilizing the data they had available at the time and are NOT final actual allocations.  The US Treasury and other federal agencies will be responsible for developing final allocation estimates and those are not available at this time.  MML staff have identified concerns with some of the data estimates, especially around the lack of allocation estimates for Michigan’s villages.  We have communicated these discrepancies with our Congressional delegation and directly to Sens. Stabenow and Peters offices and the staff at NLC.  It is our understanding that numerous state issues have been identified and that congressional research staff are reviewing and investigating the various concerns, including those raised by MML.

In addition to the direct, flexible aid to states and local governments described above, the stimulus proposal also provided an additional $10 billion in aid to states to fund critical capital projects directly enabling work, education, and health monitoring, including remote options, in response to the public health emergency with respect to the Coronavirus Disease (COVID–19).  Michigan is estimated to receive an additional $250 million under this provision and early indications are that these dollars will be targeted at further buildout of broadband capacity throughout the state. More details will be forthcoming as US Treasury develops their guidance in the coming weeks.

The League will highlight this issue during our Capital Conference March 16-17, so be sure to register and tune in for the latest updates!

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

Federal Stimulus Passes House-Senate Action Next

The U.S, House voted on H.R. 1319 over the weekend, sending the proposed $1.9 trillion American Rescue Plan Act stimulus proposal to the U.S. Senate, where consideration is expected to begin this week.  Both chambers face a looming March 14th deadline to act or risk expiration of the current enhanced unemployment benefits.

A key component of the House-passed legislation is $350 billion dedicated to support state and local governments.  According to information provided by the National League of Cities, this federal aid program would provide support for all 19,000 municipal governments across the country, the first time the federal government has offered this level of support to local governments. The following is a breakdown supplied by NLC prior to House action Friday:

$350 billion for states, municipalities, counties, tribes, and territories.

  • $130 billion for local governments split evenly between municipalities & counties.
  • $65 billion allocated through modified CDBG formula 
  • $45.5 billion for entitlement communities (+50k population)
  • $19.5 billion for non-entitlement communities (-50k population)

No minimum population threshold

No deadline for spending funds

Can be used for replacing lost revenue

Can be transferred between jurisdictions or to non-profit partners

In addition to this direct aid for local budgets impacted by the pandemic, the proposal also offers the following supports:

Housing

  • $25 billion for rent and utility assistance
  • $5 billion for homeless intervention
  • $10 billion for homeowner mortgage assistance
  • $100 million for housing counseling

Education

  • $128.5 billion for grants to State and Local Educational Agencies

Transportation

  • $50 billion for FEMA to reimburse for PPE
  • $30 billion for transit
  • $8 billion for airports
  • $3 billion for Economic Development Administration

Michigan Municipal League members are strongly encouraged to contact Senators Stabenow and Peters to urge their continued support for Michigan’s local governments impacted by the current health crisis.  It is especially important to share your community’s story…specific data on your budget situation and the efforts your community has undertaken to reduce costs and/or respond to revenue shortfalls, relay how you spent any CARES funding that you may have received, and share what unmet needs still remain within your budget or the needs of your residents.  NLC also posted this blog to help explain why the need for emergency local relief is so important.  Please reach out today!

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

Governor’s Budget Recommendation Includes Key Items For Cities

Governor Whitmer released her budget recommendation for the upcoming Fiscal Year 21-22 budget cycle this morning and a number of items that the League has actively been advocating for were included in this morning’s announcement.  A full detail of the Executive Budget for FY2022 is available here.

Following last month’s Consensus Revenue Estimating Conference that revealed a rosier than expected state revenue picture, the state finds itself in a position where it has additional, one-time revenues from the prior budget year available to expend.  These revenues, coupled with other federal revenues that were made available at the end of 2020 provided the Administration with an ability to make a number of one-time investments across the state budget, including a $175 million partial restoration of the $350 million Budget Stabilization (Rainy Day) Fund withdrawal that was part of last year’s budget balancing efforts/

As part of today’s announcement, the following items are of primary interest to League members and will be actively supported by Municipal League staff:

  • City Income Tax Relief – $70 million of one-time General Fund dollars are recommended to provide relief to the 24 city income tax communities facing immediate revenue losses due to the pandemic.  These dollars are recommended to be spread proportionally to the 24 cities based upon their income tax revenues from 2019, with no city eligible for more than $25 million.
  • Revenue Sharing – the budget recommends a 2% increase in statutory revenue sharing, resulting in an additional $5.2 million for cities, villages, and townships.  This statutory increase is coupled with an estimated increase of 1.8% ($15.4 million) in per capita Constitutional revenue sharing payments.
    • Additionally, today’s proposal recommends creation of a new grant program in Treasury that would provide $5 million for first responder recruitment and training grants to local units of government.
  • Infrastructure – the Governor is recommending a series of investments in infrastructure spending:
    • $300 million of one-time funding targeted at approximately 120 local bridges in need of rehabilitation or replacement, including 59 that are currently closed to traffic. Construction on these bridges would be expected to begin in spring of 2022.
    • $290 million recommended for investment in wastewater protection infrastructure grants using remaining state bonding authority that focuses $235 million of that amount on sanitary sewer overflow prevention, $20 million towards removing direct and continuous raw sewage discharges, and $35 million to eliminate failing septic systems.
    • $40 million of one-time General Fund dollars are proposed for High Water Infrastructure Grants, with $30 million of that amount directed at specific infrastructure projects and $10 million designated for local government planning activities.  The infrastructure grants will provide funding for projects to address issues including flooding, coastal/shoreline erosion, storm water management, and others.
    • $15 million for the dam safety emergency fund.

Additional details, briefing, and presentation materials can be found here.

With today’s budget presentation, Appropriations subcommittees in both the House and the Senate will begin their review of the Governor’s recommendations.  Initial deliberation on the budget is expected to continue through the legislative spring break at the end of March, until concluding prior to the summer recess.  League members are encouraged to contact members of both Appropriations committees to urge their support for these measures.

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

That’s A Wrap – 100th Legislative Session Finalized

With the expiration of 14-days on the Governor’s desk this past week, the last bills presented from December’s lame duck legislative action brought the 100th Legislative Session to an official close.

All told, nearly 300 new bills were introduced between the House and the Senate during the lame duck period, following the November election.  A total of 402 bills became new Public Acts (PAs) in 2020, with 158 of those PAs being finalized during lame duck, mainly during the month of December.  In addition to the volume of new laws, the Governor leaned heavily on her veto pen during the final days of the 100th Legislative Session.  All told, 36 bills were either directly vetoed or expired without signature, resulting in a pocket veto. The legislative action of 2020 stands in stark contrast to the activity of 2019, where only 178 new PAs were signed and no bills were vetoed. 

The following updates summarize many of the main issues that League staff were engaged with during this lame duck period and those issues that we expect to see returning during the 2021-2022 legislative term.

Signed By The Governor:

  • COVID Extension to Boards of Review: HB 5824 and 5825 (PAs 251 & 297 of 2020) – The League supported these two bills which codify the Governor’s now nullified Executive Order that had extended the March 2020 Boards of Review and allowed certain additional appeals and valuation changes during the July 2020 Boards of Review.
  • Poverty exemption: SB 1234 (PA 253 of 2020) – This bill amends the current residential property tax poverty exemption to assist with various COVID-related impacts that low-income residents are facing as they attempt to apply for the exemption. Upon determination of the local unit of government, existing poverty exemption applications may remain in effect for up to three years to counteract personal and public facility limitations due to COVID-19.  A similar, 3-year extension is also authorized for local units that choose to offer the extension for eligible residents on fixed income from public assistance. The League and the City of Detroit testified in support of these bills.  Treasury negotiated a number of amendments as a condition of their support prior to passage, including requiring each local unit’s poverty exemption policy and guidelines be posted on their website and bringing uniformity to the allowance of any partial exemptions, less than 100%, unless authorized by the State Tax Commission.
  • Personal Property Tax COVID Location Freeze: SB 1203 (PA 352 of 2020) – Amends the General Property Tax Act to freeze the location of all personal property being used by remote workers as assessable only at the business’s ordinary location for the 2021 tax year.
  • Tax Foreclosure Proceeds: SB 6761137 (PAs 255 & 256 of 2020) – These bills were passed in response to the recent Michigan Supreme Court Rafaeli decision that found that all “excess” proceeds from a tax foreclosure sale must be paid to the former owner of the property. This decision could have a long-term harmful impact on County Delinquent Tax Revolving Funds that will lead to chargebacks being assessed to local taxing jurisdictions. Communities that also leverage their right of first refusal to acquire these foreclosed properties for the minimum bid may also face a more expensive path to acquiring these parcels as the court decision also puts the ability to acquire parcels for the minimum bid at risk. Following months of work group discussions and negotiations with local units, the County Treasurers Association, and the Michigan Department of Treasury, the League secured amendments to retain a process for local units to continue acquiring some parcels for the minimum bid and language providing for an annual  local fiscal impact analysis from Treasury to help evaluate and make recommendations to address any increase in chargebacks to local units.
  • OMA Virtual Meetings: SB 1246 (PA 254 of 2020)Senate Bill 1246 amends the Open Meetings Act to allow communities to continue meeting virtually due to the pandemic through March 31, 2021. The prior allowance had allowed communities to meet virtually only through the end of 2020, so this extension was a high priority for the League. This new legislation also makes technical changed requested by the League to allow a local state of emergency or state of disaster to be declared pursuant to a local ordinance (in addition to those declared under law or charter in the current law) and adds a local chief administrative officer (in addition to a local official or local governing body) as a person who may declare the local state of emergency. In addition, the bill sets requirements a public body shall follow if a meeting is held in person before April 1, 2021, including adherence to social distancing and mitigation measures recommended by the Centers for Disease Control and Prevention for purposes of preventing the spread of COVID-19 and adopting heightened standards of facility cleaning. Read this blog for additional details.
  • Historic Preservation Tax Credit: SB 54 (PA 343 of 2020) – The League has fought for a number of years to restore Michigan’s state-level Historic Preservation Tax Credit program that was repealed under former Governor Snyder. The new program will provide a 25% credit on rehabilitation expenses against state income tax. For homeowners in historic districts, this credit helps offset the costs of repairing older homes while retaining their historic attributes. SB 54 caps the total number of credits per year at $5 million in order to have minimal initial impact on the State budget. The necessary $5 million for funding of the first year of the credit was already appropriated in the current state fiscal year in anticipation of this bill’s passage.
  • COVID critical infrastructure worker: SB 1258 (PA 339 of 2020) – Public Act 238 of 2020,  adopted earlier in 2020, established certain employee protections related to exposure to COVID-19. One aspect of that law required employees to quarantine for 14 days following certain instances of exposure. Specific classes of employees/businesses are exempt from that 14-day quarantine, like health care employees and first responders. Officials from the cities of Oak Park and St. Clair Shores joined the League in advocating for language in SB 1258, which would extend the specific employee/business exemption from the quarantine requirement to include critical infrastructure employees in the energy industry and other critical municipal service categories like water and wastewater operations.  During final negotiations, the bills was amended to allow the Dept of Health & Human Services Director to designate certain categories of employees for critical infrastructure deemed necessary to preserve public health or public safety. The bill also provides additional flexibility for returning to work with negative test results and time periods for isolation and/or quarantine as determined appropriate by the CDC, as opposed to designating a specific number of days in statute. The League and other local units have submitted a letter (view it here) to the Department Director requesting the immediate designation of critical municipal operations pursuant to the language in the new law.
  • Movable Bridge Public-Private Partnerships: SB 12151218 (PAs 353-356 of 2020) – The League and Bay City officials testified in support of this package of bills that will help Bay City address the replacement of two city-owned movable bridges. Due to the unique nature of these bridges and the extraordinarily high cost of replacement, this package will provide statutory authority for Bay City to enter into a public-private partnership that will provide for the replacement of both bridges and free up substantial city resources that can be invested in other infrastructure projects.
  • Water Shut-Offs: SB 241 (PA 252 of 2020) – A new version of this bill was adopted to codify the Governor’s previous Executive Order related to water shut-offs. In early July Governor Whitmer issued Executive Order 144 that placed a moratorium on water shutoffs until December 31st of this year. Following the nullification of the Governor’s E.O.s by the Michigan Supreme Court, the Administration and the Legislature negotiated the language in SB 241 to codify the intent of that E.O. into statute. This agreement in this bill reinstates the moratorium on water shutoffs and extends the date to March 31, 2021
  • Supplemental Budget Appropriation/CARES Hazard Pay Grant Extension: SB 748 (PA 257 of 2020) – Separate from the political grappling between the Legislature and Governor over state spending for COVID relief and unemployment benefits, language was included at the League’s request to extend the time period for local units to have issued first responder hazard pay premiums under the state’s Coronavirus Relief Fund grant program and be eligible for a reimbursement.  The original language had required payroll be issued by 10/31/2020, this change allowed communities to issue their payroll by 12/29/2020 and still be eligible for reimbursement.
  • Brownfield Redevelopment Authority Administrative Change: HB 4159 (PA 259 of 2020) – Provides technical changes and oversight to brownfield redevelopment authorities. Additional amendments were adopted to section 13b to increase the number of active projects that an authority may have at one time and also allow for a corresponding increase in expenditures for administrative and operating costs relative to the number of projects. This change is also consistent with the recently updated MEDC strategic plan and their revised Community Revitalization Program guidelines.
  • Small Cell Road Commission Fix: SB 1256 (PA360 of 2020) – Late in lame duck SB 1256 was introduced and moved without a committee hearing, receiving bi-partisan support in both chambers. This bill added country roads commission to the definition of authority and clarifies the original intention of the legislation. As a result of this change, all entities within the right of way would operate on a level playing field. The League did not support this legislation but did request, and have secured a commitment from the bill sponsor (Sen Dan Lauwers), to provide additional clarification that the rate will be paid exclusively to cities, villages, and townships. A bill addressing this clarification will be introduced early in 2021 and we anticipate it being taken up shortly after committees begin to meet.

Vetoed By The Governor:

  • Solar Projects Tax Exemptions: SB 1105 & 1106 – These bills were vetoed by the Governor as premature, given the State Tax Commission’s ongoing ad hoc review committee and related analysis and recommendations were not considered in the development of the vetoed language. The League opposed these bills and submitted a letter requesting the Governor veto these bills. The two bills would have exempted all utility-grade solar projects from the industrial personal property tax and replaced that lost property tax revenue with a Payment In Lieu of Tax reimbursement of $4000 per megawatt, an arbitrary value that would have amounted to pennies on the dollar for many local units.  Local units would have also been required to approve every tax exemption application it received as long as the project matched the definition of an “qualified renewable energy facility”, regardless of local land use or economic development plans or support.  As stated in the League’s veto request letter, which you can read here, we support additional investment in alternative energy systems in Michigan, but any PILT proposal must be developed in conjunction with local government and provide a balance between promoting solar development and maintaining the services residents rely upon.
  • Meijer Warehouse Equipment PPT cut: SB 1153 – This bill, along with two other bills (SB 11491150) had proposed exempting consumer goods handling warehouse equipment from personal property, sales and use tax. The bills died on SB 1149 1150 1153 veto request letter 12.22.20the Governor’s desk when she declined to act on them before the 14 days expired at the end of the term. The League opposed all three bills and submitted a veto request letter to the Governor, which you can view here. These bills would have provided Meijer and other large commercial retailers with full sales, use, and personal property tax exemptions for all large-scale consumer goods handling warehouse distribution equipment. The League and all other local government and school groups, and the MI Department of Treasury testified in opposition to these bills and a separate three bill package that did not end up moving (SBs 1178, 1179, 1180) that would have provided similar sales, use, and personal property tax exemptions for so-called “micro-fulfillment” systems installed by retailers to facilitate filling online customer orders. The Governor had expressed concern publicly with SBs 1149, 1150, and 1153, questioning the unknown impact that these cuts would have on state and local revenues.
  • Summer Property Tax Deferral/Penalty & Interest Relief: SB 943 – Originally introduced this summer as part of the summer tax deferral proposal that was vetoed, a substitute version of SB 943 was quickly adopted and passed targeting a select number of industries hit hardest by the pandemic. This alternative approach would have allowed for the retroactive deferral of any delinquent summer tax bills and waiver of related penalties and interest from four specific industry segments, until Feb 15, 2021. The bill also provided for state reimbursement to local units for any forgiven penalties and interest owed on any of these deferred amounts.  Treasury had opposed the bill based upon concern over administering the program. The Governor declined to act on the bill before the expiration of the 14-day limit, resulting in a pocket veto.
  • Rental Inspections: SB 692 – The League was neutral on this bill as the change would have only impacted certain change of ownership situations and only for a limited time period, not indefinitely. This bill was also pocket vetoed based upon a limited rationale for the legislation.

Bills Opposed By The League That Died Without Action:

  • Zoning Preemption For Aggregate Mining: SB 431– The League strongly opposed this effort to preempt local units of government from virtually any zoning or other currently authorized regulation of gravel and aggregate mining.  This bill is expected to be reintroduced in 2021 and the League will continue to engage League members and work with our allies to block its passage.
  • Preempting Regulation Of Automated Delivery Devices: SB 892
  • Zoning Preemption For Certain Large Foster Care Facilities: HB 4095
  • Short-Term Rental Zoning Preemption: HB 4046

Legislation The League Will Continue To Pursue In 2021:

  • Headlee/Proposal A Reform: HB 6454 – This bill was introduced to address the negative interactions between Headlee and Proposal A before any property value reductions from the current pandemic recession could impact local budgets.  We are working with the bill sponsor to reintroduce this proposal in the new term.
  • Public Notice Reform: HB 6440 – This was the main bill in a more than 100-bill package that proposed reforming the current, obsolete public notice requirements throughout state law.  This is a reintroduction of a similar package that the League supported in the 2015-16 session.
  • Speed Limits: HB 4733 – This bill would have further clarified local government’s ability to adjust speed limit below the 85th percentile speed when demonstrating a situation with hazards to public safety through an engineering and safety study.
  • Stormwater Authority Creation: HB 4691 and Basement Back-Up Liability Protection: HB 4692
  • Dark Store Property Assessing Reform: SB 26 & 39
  • Veteran’s Property Tax Exemption: HB 4176

The League will also continue to prioritize restoration of cuts and additional protections for statutory revenue sharing, funding for municipal infrastructure at risk from high-water levels and shoreline erosion, and opportunities to improve funding for roads and underground infrastructure in the new term, among other priorities.

The 101st Legislature will officially be seated and commence action on Wednesday, January 13th. Since the House is re-forming under a new Republican Speaker (Jason Wentworth, R-Farwell), a new committee structure will be established, and new committee membership will need to be announced. At this point, only the incoming leadership team and the House Appropriations committee chairmanship (Thomas Albert, R-Lowell) have been revealed. Neither the House nor Senate leadership have revealed their policy agendas for the coming year. 

Following the ceremonial first day of session on the 13th, the state’s annual Consensus Revenue Estimating Conference is scheduled for 9 am on Friday, January 15th. This revenue conference will establish the baseline that the Governor’s budget team will utilize to craft her Executive Budget Recommendation that will likely be released in early February. The Governor’s State of the State address has been scheduled for Wednesday, January 27th at 7 pm.  That speech and the subsequent budget presentation will offer insight into the Administration’s legislative goals for the year. 

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