Michigan Transportation Asset Management Council Seeks Communities for Awards

Passing this along from our friends at the Michigan Transportation Asset Management Council:

On behalf of the Michigan Transportation Asset Management Council (TAMC) we are seeking agencies and individuals to recognize for their efforts in asset management and best practices. Detailed instructions and information for the submittals and past award recipients are linked below.

The TAMC has established the Organizational Achievement Award to acknowledge those agencies that have incorporated the principles of asset management and adopted an asset management plan to help guide their investment decisions. In addition, the TAMC Awards Program provides agencies around the state with excellent examples to establish their own programs and practices. All Public Act 51 road agencies are eligible to be nominated for this award.

Additionally, the TAMC wants to recognize individuals providing outstanding support of Asset Management and the TAMC. Nominees for the Carmine Palombo Individual Achievement Award can include elected officials (state or local), support staff from state agencies, regional and metropolitan planning organizations, county road agencies, local units of government, the education community or other individuals involved in promoting asset management in Michigan.

Award submittals are due Friday, July 1, 2022, to Gloria Strong, TAMC Departmental Technician, strongg@michigan.gov. Please refer to the criteria and instructions documents (click here) to assist you with your nominations. Questions can also be directed to Gloria at (517) 402-3599. Pending the amount of award nominations, recognition may be part of the 2022 TAMC conference programs.

The awards will be presented at the TAMC Asset Management Conference, celebrating our 20 years, September 28, 2022 at the Great Wolf Lodge in Traverse City, MI.

Thank you in advance for all your efforts.

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.

White House Releases New Infrastructure Law Guidebook/Webinars

The White House and US Department of Transportation shared the following information yesterday on the recently signed Bipartisan Infrastructure Law.  The new law combined a reauthorization of federal transportation funding with significant other infrastructure investments in water, broadband, electric vehicles and charging, cybersecurity, and the nation’s energy grid.  This $1.2 trillion, 5-year spending plan is now starting to take shape and funds are expected to begin flowing to the states this Spring.

Monday’s communication offers stakeholders a detailed guidebook on the new law (BUILDING A BETTER AMERICA_FINAL) and registration option for two separate webinars later this week (see below).

According to the communication from the White House/USDOT…

The Bipartisan Infrastructure Law, signed in mid-November, is historic in its size – the largest ever investments in broadband, rail and transit, clean energy, and water, just to name a few – as well as the breadth of programs and sectors included in the law.  Implementing the largest investment in our nation’s infrastructure in generations will require deep partnership alongside Members of Congress, Governors, Mayors, Tribal leaders, local officials, and community members.

Today, the White House is releasing a Bipartisan Infrastructure Law guidebook to provide information so you know what to apply for, who to contact, and how to get ready to rebuild. This guidebook is a roadmap to the funding available under the law, as well as an explanatory document that shows direct federal spending at the program level. We will continue to update this resource online at Build.gov.  Our goal is for you—communities all across America—to take full advantage of the opportunity this new funding presents.

To help stakeholders better understand how to use this document and hear the latest updates on the Bipartisan Infrastructure Law implementation, we are hosting two webinars over the next week:

Resources:

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

Rural Bikeways Planning and Design Training Sessions in March and April

We’re passing this along to Michigan Municipal League members at the request of the Michigan Department of Transportation.

Rural Bikeways Planning and Design: Virtual Bicycle Facility Training

Classes: March 22, 24, or April 19, 2022
Sessions: 1 – 4 p.m.

This 3-hour virtual online course features planning and design approaches for bicycle facilities in a rural context. The program will look deeper into the challenges and solutions for establishing safe and connected bicycle networks within and between rural communities. These concepts will be illustrated using national best practices, case studies, and actual projects in rural communities.

Objectives: Special bikeway design considerations in small town, village, rural, and agricultural areas. Achieving low stress bicycle network planning in rural and small-town contexts. Addressing connectivity issues between rural and urbanized areas. Selecting appropriate bicycle facilities based on context. Appropriate crossing treatments based on roadway characteristics.

Experts: Toole Design Group Planners & Engineers

Audience: This course is for village, city, township, county, and Michigan Department of Transportation (MDOT) managers, engineers, planners, and officials; rural and metropolitan planning organization staff; and other stakeholders.
Registration: This course is provided free by MDOT. Please use below link.

Please RSVP by March11 for March classes and by April 8th for April class. Class link will be provided via a separate email prior to the day of the class.

Accommodations: Accommodations can be made for persons who require mobility, visual, hearing, written or other assistance for participation. Large print materials, auxiliary aids or the services of interpreters, signers, or readers are available upon request. Please contact Orlando Curry @ 517-241-7462 or complete Form 2658 for American Sign Language (ASL) located on the Title VI webpage https://www.michigan.gov/mdot/0,4616,7-151-9621_31783—,00.html. Request should be made at least five days prior to the meeting date. Reasonable efforts will be made to provide the requested accommodation or an effective alternative, but accommodations may not be guaranteed.

To register for class: https://www.research.net/r/5FNNYDG

 

Legislative Session Reaches Mid-Point

The Michigan House and Senate wrapped up their work last week for the calendar year as the mid-point of the current 2021-22 legislative session.  Following the holidays, the legislature will return to session on Wednesday, January 12, 2022 to resume action.  All legislation introduced during 2021 remains eligible for action through the end of 2022.

Year-end legislative activity centered on the book closing supplemental (HB 4398) and the passage of the Economic Development package (SB 769,771 and HB 4082, 5603) that the small taxpayer PPT expansion was tied into (HB 5351).

The book closing supplemental appropriated nearly $850 million between Fiscal Years 20-21 and 21-22 across a variety of state departments.  Of main interest to League members was the appropriation of $140 million in federal emergency rental assistance funds for rental and utility assistance to preserve housing and avoid eviction, almost $200 million in non-discretionary ARPA funds through MDOT for airports and transit agencies with nearly $170 million of that appropriation aimed at the state’s primary airports, and $140 million of FEMA funds to the Michigan State Police for emergency and disaster response and mitigation.

The Economic Development package (SOAR – Strategic Outreach and Attraction Reserve) was signed by the Governor this week and has been outlined as follows:

  • $1 billion for two new MEDC job creation funds to use for cash incentives for large corporations and construction site improvements
  • $409 million in grants for businesses affected by the COVID-19 shut-downs

https://www.bridgemi.com/michigan-government/michigan-legislature-passes-1b-incentive-plan-big-projects-gm

The inclusion of the expansion of the Small Taxpayer Exemption component of the Personal Property Tax reimbursement system was outlined in our Inside 208 blog following the late night action last week and was also discussed on the MIRS News Monday Podcast.  In the Governor and Legislature’s final move to secure the necessary votes for passage of this piece in the Senate, they added $75 million into the funding bill for the SOAR package (Senate Bill 85) to cover the first year’s cost of the expansion (which doesn’t kick in until 2023). The Senate Majority Leader and numerous other legislators made public comments committing to securing a long term reimbursement mechanism and discussions on this replacement will be a top priority for the League in the new year.

Three different supplemental budget proposals also saw action by one chamber during recent weeks.  House Bills 5522, 5523 and SB 565 provide some insights into legislative ARPA spending priorities around public safety, public health investments, and water and sewer infrastructure. These bills will likely form the basis for ongoing ARPA and state GF/GP fund balance spending negotiations that will continue in earnest in the new year.  Our team is heavily engaged, through our coalition efforts, in shaping the spending proposals within these bills and developing additional spending plans outside of these subject areas.

Other year-end legislative action can be headlined for League members by what did not happen.  No further action took place on HB 4722, the short-term rental zoning preemption or on SB 429, the aggregate mining preemption bill.  The legislature also failed to act on an extension for continuing to allow remote meetings under the Open Meetings Act.  As of December 31, 2021, local emergency declarations will no longer be allowed for remote meetings of public bodies under the OMA.  The marijuana caregiver package we are supporting was also held up, pending additional negotiations.

The Legislature did finalize action on Senate Bill 698, that extends the freeze on situs for assessment of equipment being used by remote workers and House Bills 5502-5506 which shifts the personal property tax business filing to a one-time filing with Treasury.  The state-funded cancer presumption for workers compensation was expanded to include part-time, paid on-call, and volunteer firefighters in House Bill 4172. The cost of this expansion will be supported by deposits to the state’s First Responder Presumed Coverage Fund from the state’s internet wagering proceeds.  A five-year extension of the sunset for the Transformational Brownfield program was also sent to the Governor prior to last week’s recess in Senate Bill 671 with League support.

A local fiscal “early warning” proposal was introduced right before the holiday recess.  Senate Bill 780 was introduced alongside a full repeal of the state’s Emergency Manager law.  SB 779 simply repeals all of Act 436 of 2012. The two bills are not tie-barred together but we expect the legislature to begin deliberation on the two proposals in the new year. In discussions with the Department of Treasury and the bill sponsor prior to introduction, we expressed grave concerns with the original approaches outlined in SB 780 and proposed numerous revisions.  We continue to work with the Department and the bill sponsor to ensure local autonomy in fiscal decisions and raise awareness of the broad range of factors outside of a local unit’s control that could contribute to a community’s financial situation and ensure that those factors are acknowledged by any legislation on this topic.

Also introduced last week was the reform of the disabled veteran property tax exemption that the League has been requesting.  Senate Bills 783784 were introduced on December 8th and the proposal would shift the burden of the veteran property tax exemption to the state’s income tax through the Homestead Property Tax credit program.  These bills have 12 bi-partisan Senate sponsors and we will be aggressively advocating for passage of these bills in the coming year.  League members are encouraged to contact their legislators to express support for these bills.

Following their return in January, the legislature will resume action on the remaining ARPA and state budget fund balance spending plans as they prepare for the Governor’s next executive budget recommendation and State of the State speech in late January/early February.

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

US DOT Details New Infrastructure Act Impact on Michigan

The US Department of Transportation released an analysis today of how the recently signed Infrastructure Investment and Jobs Act would impact the State of Michigan for the transportation-specific programs outlined in that bill.

The $1.2 trillion IIJA included the necessary transportation reauthorization of the former FAST Act and is estimated to offer Michigan a more than 30% increase in our annual federal road and bridge formula allocation.  Michigan will receive approximately $7.8 billion over the next five years from the transportation reauthorization components of the IIJA.  The 30% increase will bring in nearly $500 million in additional road and bridge funding annually to the state, not including any of the $100-200 billion of competitive grant opportunities that Michigan will be able to apply for.

The attached outline from US DOT also highlights the formula funding that Michigan is expected to receive in program areas like motor vehicle, commercial vehicle, bicyclist, and pedestrian safety, public transportation, electric vehicle infrastructure, Amtrak passenger rail expansions and freight rail safety and improvements, and airport infrastructure investments.

Competitive grant opportunities will also be available to state and local governments:

Safe Streets for All ($6B, new) – This program will provide funding directly to local and tribal governments to support their efforts to advance “vision zero” plans and other
improvements to reduce crashes and fatalities, especially for cyclists and pedestrians.
Rebuilding American Infrastructure with Sustainability and Equity (RAISE)
Grants ($15B, expanded) – RAISE grants support surface transportation projects of
local and/or regional significance.
Infrastructure for Rebuilding America (INFRA) Grants ($14B, expanded) – INFRA
grants will offer needed aid to freight infrastructure by providing funding to state and
local government for projects of regional or national significance. The BIL also raises the cap on multimodal projects to 30% of program funds.
Federal Transit Administration (FTA) Low and No Emission Bus Programs ($5.6B,expanded) – BIL expands this competitive program which provides funding to state andlocal governmental authorities for the purchase or lease of zero-emission and low-emission transit buses as well as acquisition, construction, and leasing of required
supporting facilities.
FTA Buses + Bus Facilities Competitive Program ($2.0B, expanded) – This program provides competitive funding to states and direct recipients to replace, rehabilitate, and purchase buses and related equipment and to construct bus-related facilities including technological changes or innovations to modify low or no emission vehicles or facilities.
Capital Investment Grants (CIG) Program ($23B, expanded) – The BIL guarantees
$8 billion, and authorizes $15 billion more in future appropriations, to invest in new highcapacity transit projects communities choose to build.
Federal Aviation Administration (FAA) Terminal Program ($5B, new) – This
discretionary grant program will provide funding for airport terminal development and
other landside projects.
MEGA Projects ($15B, new) – This new National Infrastructure Project Assistance
grant program will support multi-modal, multi-jurisdictional projects of national or
regional significance.
Promoting Resilient Operations for Transformative, Efficient, and Cost-saving
Transportation (PROTECT) Program ($8.7B, new) – PROTECT will provide $7.3
billion in formula funding to states and $1.4 billion in competitive grants to eligible
entities to increase the resilience of our transportation system. This includes funding for
evacuation routes, coastal resilience, making existing infrastructure more resilient, or
efforts to move infrastructure to nearby locations not continuously impacted by extreme
weather and natural disasters.
Port Infrastructure Development Program ($2.25B, expanded) – BIL will increase
investment in America’s coastal ports and inland waterways, helping to improve the
supply chain and enhancing the resilience of our shipping industry. BIL overall doubles
the level of investment in port infrastructure and waterways, helping strengthen our
supply chain and reduce pollution.
5307 Ferry Program ($150M, existing) – BIL retains the $30 million per year passenger ferry program for ferries that serve urbanized areas.
Electric or Low Emitting Ferry Program ($500M, new) – This competitive grant
program will support the transition of passenger ferries to low or zero emission
technologies.
Rural Ferry Program ($2B, new) – This competitive grant program will ensure that
basic essential ferry service continues to be provided to rural areas by providing funds to States to support this service.
Federal Highway Administration (FHWA) competitive grants for nationally
significant bridges and other bridges ($12.5B, new) – This new competitive grant
program will assist state, local, federal, and tribal entities in rehabilitating or replacing
bridges, including culverts. Large projects and bundling of smaller bridge projects will be
eligible for funding.
FTA All Station Accessibility Program ($1.75B, new) – This competitive grant
program will provide funding to legacy transit and commuter rail authorities to upgrade
existing stations to meet or exceed accessibility standards under the Americans with
Disabilities Act.
Charging and fueling infrastructure discretionary grants (Up to $2.5B, new) – This
discretionary grant program will provide up to $2.5 billion in funding to provide
convenient charging where people live, work, and shop.
Reconnecting Communities Pilot Program ($1B, new) – This new competitive
program will provide dedicated funding to state, local, MPO, and tribal governments for
planning, design, demolition, and reconstruction of street grids, parks, or other
infrastructure.
FHWA Nationally Significant Federal Lands and Tribal Projects ($1.5B, expanded)
– This discretionary program provides funding for the construction, reconstruction, and
rehabilitation of nationally-significant projects within, adjacent to, or accessing Federal
and tribal lands. BIL amends this program to allow smaller projects to qualify for funding
and allows 100% federal share for tribal projects.
Strengthening Mobility and Revolutionizing Transportation (SMART) Grant
Program ($1B, new) – The SMART Grant program will be a programmed competition
that will deliver competitive grants to states, local governments, and tribes for projects
that improve transportation safety and efficiency.

Dollars from this new act are expected to begin flowing to states and local governments in the first half of 2022.

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.

League President and Westland Mayor Bill Wild Meets with U.S. Energy Secretary Granholm About American Jobs Plan

Westland Mayor Bill Wild, MML President, and Grand Rapids Mayor Bliss, former MML President, met with U.S. Energy Secretary Jennifer Granholm Friday about the American Jobs Plan.

Westland Mayor and Michigan Municipal League Board President Bill Wild met with U.S. Secretary of Energy Jennifer Granholm Friday about the American Jobs Plan.

The meeting was organized by the U.S. Conference of Mayors. Mayor Wild, along with Grand Rapids Mayor Rosalynn Bliss, former League Board President, gave a presentation to the Energy Secretary. There is language within the $2.3 trillion Jobs Plan to support clean energy bock grants for state, local and tribal governments. The mayors were in support of this provision, Wild said.

“We are pushing to reauthorize the Energy Efficiency and Conservation Block Grant from 2009 and not try to create a new block Grant. The data is already available and the results are proven that it met the goals of the program and created/saved jobs,” Mayor Wild said.

President Biden recently announced the American Jobs Plan to rebuild the economy and create good-paying jobs for workers in America’s cities, towns and villages through investments in infrastructure and workforce development.

The League has advocated for additional investment in infrastructure in the traditional sense (roads, bridges, water, and sewer), but also in a more broad-based community infrastructure view (broadband, housing, parks and workforce development). This plan addresses many of those areas. Read more about the Jobs Plan in this Inside 208 post by the League’s John LaMacchia.