Governor Presents Final Budget Recommendation

Governor Snyder presented the FY2019 state budget to a joint hearing of the House and Senate Appropriations committees Wednesday morning.  Matching his tone following January’s consensus revenue estimating conference and his comments about spending restraint during the recent State of the State address, the budget didn’t offer many surprises.

The key announcement for League members centered on his proposal for revenue sharing.

Constitutional revenue sharing payments are expected to grow, based upon sales tax growth, to the tune of 3.1% ($24.7 M) in the coming budget.

The Governor did not recommend a continuation of the 2.5% statutory revenue sharing increase that we were able to secure in the current budget, taking this $243 million appropriation back down to a level that has been flat over the previous four years.

Instead of increasing statutory revenue sharing through the traditional budget process, the Governor is building off of his comments from last year’s budget on the distribution of excess Personal Property Tax reimbursements.  The Governor has called for a simpler and fairer approach to the distribution of those excess reimbursements and emphasized the need to continue providing that support to local units of government.

His recommendation would maintain the apportion of PPT reimbursement revenue going to each type of local unit of government and have that revenue instead distributed by the Local Community Stabilization Authority to communities as an additional revenue sharing payment.  This would amount to a $73 million revenue sharing distribution to cities and villages.

Additionally, the Governor is proposing to use the excess reimbursement dollars that had gone to libraries and miscellaneous authorities to preserve and increase fire protection grant funding to local units with qualifying state or higher education facilities.

Other line items or programs of interest to local units of government included:

Adding $175M of one-time General Fund to go with the $150M already scheduled to go into roads as part of the previous road funding pkg

Adding $2M to continue and expand Project Rising Tide

Building in the $79M from his previously proposed solid waste tipping fee increase to support brownfield site contamination cleanups, water and beach monitoring and other environmental programs that had previously been supported by the former Clean MI Initiative bond proceeds.

The budget will now be reviewed by each chamber over the coming weeks, with initial action expected prior to the Spring/Easter Break.

For more details on today’s budget announcement –

PowerPoint Presentation – (slide 24 relates to revenue sharing/PPT excess)

Issue Papers –  pages 31-32 detail the revenue sharing/PPT proposal

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

Performance Audits No Longer a Requirement for Local Road Agencies

The Michigan Department of Transportation (MDOT) has re-evaluated its decision regarding performance audits. Upon receiving numerous audits as well as concerns regarding the value of these audits, MDOT is no longer requesting that these audits be completed and submitted to the department. Therefore, all local road agencies are not required to begin or complete any scheduled Act 51 performance audits.

It has been further determined by the Department that costs incurred related to these performance audits can be submitted to MDOT for reimbursement. Invoices for fees paid for the performance audit and supporting documentation should be submitted to the attention of Patrick McCarthy by email at mccarthyp@michigan.gov.

For a copy of the letter please click the following link. MDOT Performance Audit Letter

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

 

$500 million federal TIGER program accepting grant applications for road projects; due October 16

The federal government has announced it is now accepting applications for the FY 2017 Transportation Investment Generating Economic Recovery (TIGER) program, with $500 million in available funds for infrastructure projects including roads.

The application deadline for the 2017 TIGER solicitation is October 16.

The Department of Transportation will hold public two webinars:

  • September 13 and 19, 2 – 4 p.m., on “How to Compete for TIGER Grants;” and
  • September 18, 2 – 4 p.m., on “Preparing a Benefit Cost Analysis.”

To register for the free webinars, please visit the TIGER Webinar Series webpage.

Additional information about the TIGER program is available at the TIGER website. Questions may be directed to Ryan Brumfield, 202.366.2639, ryan.brumfield@dot.gov, in the TIGER program office or to FHWA TIGER program staff Sam Snead, 202.366.0857, sam.snead@dot.gov.

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

MDOT kicking off 2018 Local Grade Crossing Surface Program; applications due October 27

MDOT provides funding assistance for highway-railroad grade crossing surface improvements on local roads. This annual program offers 60% funding for eligible projects, with railroads responsible for the remaining 40% of costs. Projects are selected in compliance with criteria established by state law.

After a successful launch in 2017, 2018 Local Grade Crossing Surface Program announcement letters are being mailed to all railroads and road agencies with active highway-railroad grade crossings within Michigan.

The 2018 Call for Projects opened in early September, with program letters containing additional details mailed to road authorities and railroads. Application materials for road agencies are now available, with a deadline for submittals of October 27, 2017. Project selections are expected to be confirmed by late November, with authorizations scheduled to be issued in time for the 2018 construction season. The 2017 Program had over 130 applications resulting in more than 70 approved projects to improve local crossing surfaces.

2018 Application
Sample Surface Program Railroad Authority Letter
Sample Surface Program Road Authority Letter

Questions about the program should be directed to Kristian Foondle, MDOT Local Grade Crossing Program Manager, at foondlek@michigan.gov. Click here for a list of railroad contacts

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

 

State Budget Signed By Governor

The Governor affixed his signature at the end of last week to the omnibus state budget bill.  This bill (HB 4323) includes a 2.5% ($6.2 million) increase to statutory revenue sharing. This spreadsheet from the House Fiscal Agency outlines the expected revenue sharing payments for each municipality based upon this increase.  These new dollars will flow strictly to communities that received a CVTRS payment in the current year and will be distributed to those units on a per capita basis.  Constitutional payments are expected to grow by approximately $40 million in the coming year, subject to actual state sales tax collections.

http://house.michigan.gov/hfa/PDF/Revenue_Forecast/CVT_Revenue_Sharing_Payments_FY16thruFY18_Conference_Report.pdf.

In addition to this welcome increase in revenue sharing, the budget also includes an increase above the Governor’s original proposal to fire protections grant funding of $1.4 million.  While not as high as the supplemental, one-time increase in the current year’s budget, this will be the second year in a row where fire protection grant funding has been higher than the baseline recommendation.  State PILT payments for purchased lands will also see a slight increase in this new budget.  The budget estimates $4 million in revenue coming in from the new medical marijuana law that will be distributed as grants to local units of government.  A new grant program has $500,000 available within Treasury that will provide reimbursements to local units that implement a financial data analytic tool.  Project Rising Tide will receive an additional $2 million to expand beyond the current 10 communities in that program.  The Michigan Enhancement Grant program will receive nearly $36 million to fund 20 projects in communities around the state.  Within the MDOT portion of the budget, an additional $49 million is anticipated being distributed from the MTF to cities and villages, along with additional revenue appropriated to transit and the TEDF.

From a broader level, the budget deposits another $150 million into the state’s Budget Stabilization Fund and $35 million into the Governor’s new Michigan Infrastructure Fund.

Supplemental budget language was added for the current (FY16-17) budget, as well. The Ambulance Quality Assurance Assessment Program (QAAP tax) was eliminated from the current year budget, but language allowing for its inclusion in the coming budget was retained, though it was amended in an attempt to tighten the revenue base upon which this new tax could be assessed.  Efforts will continue to keep DHHS from implementing this new tax and repealing the language in the Public Health Code.

New funding has been added to the current budget year aimed at providing reimbursement dollars for the under-development local Indigent Defense Commission standards to the tune of $5 million.  As these plans continue to be finalized within each county, the picture will become clearer as to how much more will need to be appropriated for full implementation of those plans.

New funding was also included in this supplemental section for the newly created Municipal Wetland Alliance for wetland mitigation banks ($3.9M) and for a Regional Infrastructure Asset Management Pilot ($2M), both of which could benefit communities around the state.

The Governor’s line item vetoes focused mainly on education or human services program additions and did not impact any of the items referenced above.  The new budget goes into effect on October 1, 2017.

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

2019 Federal Local Safety Program Solicits Applications

The Michigan Department of Transportation (MDOT) is pleased to announce the solicitation of new applications for the fiscal year (FY) 2019 general Local (HSIP) Safety Program. The FY 2019 federal budget for this program is estimated at $9,000,000. This amount may be subject to revisions. Unselected FY 2019 High Risk Rural Road (HRRR) projects will automatically be included in this Call.

Local Agencies may submit more than one project application for consideration. Federal safety funds shall not exceed $600,000 per project or a maximum amount of $2,000,000 per Local Agency, HSIP, and HRRR combined, for the fiscal year. Selected projects are to be obligated in FY 2019.

Application are to be electronically submitted or postmarked by Monday, August 7, 2017. Please click here for additional information.

If you have any questions, please feel free to contact Pamela Blazo, Local Agency Programs Safety Engineer, at 517-335-2224 or at blazop@michigan.gov.

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

2019 Federal High Risk Rural Road Program Call for Application

The Michigan Department of Transportation (MDOT) is pleased to announce the solicitation of applications for the fiscal year (FY) 2019 High Risk Rural Road (HRRR) program. Federal funds for the HRRR program are apportioned from the Highway Safety Improvement Program (HSIP) and derived from the HRRR Special Rule under 23 USC 148(g)(l), The FY 2019 federal appropriation for this program is estimated to be $6,000,000. This amount may be subject to revisions.

Local agencies are allowed to submit more than one project for consideration. Federal safety funds shall not exceed $600,000 per project or a maximum amount of $2,000,000 per Local Agency for the fiscal year, including any select FY 2019 HSIP projects. Any non-selected projects submitted under this HRRR call for projects will automatically rolled over to the general FY 2019 HSIP safety call for projects. Selected HRRR projects are to be obligated in FY 2019; the Local Agency will not be allowed to delay a selected HRRR to a different year.

Applications are to be electronically submitted or postmarked by Monday, August 7, 2017. Please click here for additional information.

If you have any questions, please feel free to contact Pamela Blazo, Local Agency Programs Safety Engineer, at 517-335-2224 or at blazop@michigan.gov.

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

Contact Your State Reps Today and Tell Them to Oppose Income Tax Elimination Bill

Act now logo new-320

***UPDATE:   

The Michigan House just adjourned session for the day (Tuesday) after adopting a substitute version H-3 for HB 4001 that would reduce the income tax rate from 4.25% down to 3.9% by January 1, 2021 and stopping at that point.  Following hours of caucus and floor discussion, the new version was introduced and adopted on the House floor with no explanation of the new version.  The House Fiscal Agency analysis of the new proposal pegs the state’s General Fund loss in the first year and $195 million and progressing upwards to $1.1 billion in FY2021-22.  The H-3 version of the bill is now on 3rd reading in the House and has been listed for action on TODAY’s (Wednesday’s) House calendar. So it is just as important to contact your Reps today and ask them to oppose the sub version of HB 4001. Governor Snyder came out with a statement last night opposed to the revised bill (he was also against the original bill).

Legislation being considered in Lansing would eliminate the state income tax, potentially blowing a massive hole in our budget and destroying vital programs and services communities and your residents rely on every day. Let’s face it, nobody likes to pay taxes. But we need the services those taxes support – police and fire protection, road maintenance, street lighting, drinking water, libraries, parks, and the list goes on and on.

This plan to eliminate the state income tax is moving quickly and we need your help to oppose it. On Feb. 15, a state House committee passed out HB 4001, which would cut $680 million from the state budget in the first, partial year alone. This idea is poor fiscal policy that would harm the state’s future ability to provide critical services for its residents, communities, and businesses. There is no question that with revenue reductions of that magnitude, the remaining statutory revenue sharing payments would be at risk and any future restoration of the cuts from the past decade would be a virtual impossibility.

Proponents of the tax cut say it would spur economic growth and allow people living paycheck to paycheck to see meaningful tax relief and allow them to buy more. A recent Midland Daily News editorial disagreed and broke it down like this: “But the reality is that is a bunch of bunk. A person making $50,000 a year would see a tax cut of $175 — about $3.37 per week (48 cents a day). That’s hardly going to bail out people living paycheck to paycheck and is a very minimal increase in buying power.”

Governor Snyder and Michigan Treasurer Nick Khouri also have spoken against the proposal and recent polling reveals little support for an income tax cut from voters, regardless of political party or geography, and almost no support once voters are told of the impact of the repeal. The poll found 74 percent of people oppose the idea of eliminating the income tax without a plan to replace revenue lost by the state.

Michigan communities have already lost $7.5 billion in revenue sharing dollars since 2002. This is money that should have gone to local communities, but instead state leaders kept the funds for their own budget priorities. Further risking cuts in revenue sharing, coupled with the dramatic declines in property tax revenues from the Great Recession, will only further devastate local governments. We should be talking about growth, not more cuts. With Michigan’s economy finally recovering, we should be looking for ways where our communities can share in that recovery, not push them further into crisis.

Please contact your State Representative today (look up their contact information by clicking here) and tell them to oppose HB 4001.

Matt Bach is director of media relations. He can be reached at mbach@mml.org.

Local Bridge Program Deadline for Applications – May 1, 2017

The Michigan Department of Transportation is pleased to announce the solicitation of applications for candidate projects for the Local Bridge Program. Selected projects will be funded during the 2020 fiscal year (FY). Do not submit projects which cannot be committed to construction within FY 2020. The applications can be submitted by the local agency owner or their consultant. All bridge applications submitted in previous years that have not been selected for funding have been discarded. The total number of applications from any one local agency is limited to five.

The FY 2020 Local Bridge Program budget is estimated at $48 million. This amount may be subject to revisions.

Applications are to be electronically submitted or postmarked by Monday, May 1, 2017. Please click here for more information regarding eligibility and submitting candidate Local Bridge Project Applications.

If you have any questions or need further information, please contact Keith Cooper, Bridge Program Manager, at 517-373-2346 or at cooperk@michigan.gov.

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

Compromise Bill Eliminating Local Cost Sharing with MDOT Sent to the Governor

On July 1, the Governor vetoed SB 557. That bill would have eliminated the local cost sharing provision for cities over 25,000 on MDOT projects. As a result of the veto, Senator Knollenberg, introduced SB 1068 as a starting point to begin working on a compromise.

After months of working with the Senator, MDOT and the Administration, a compromise was reached during lame duck that will eliminate local cost sharing on all limited access freeways. This compromise language will significantly reduce the liability for our largest municipalities and in some cases save them million of dollars.

Although we were disappointed with the Governor’s original veto, we appreciate the willingness of all parties involved to work toward this compromise and are very please with the results. We look forward to the Governor signing this legislation and the positive impact it will have on our communities and their local road networks.

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