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.

Governor Whitmer Delivers State of the State Message, Calls for Expanding Local Road Funding Options

Governor Whitmer delivered her third State of the State this evening with a focus of bi-partisanship and a theme she coined as “Fixing the Damn Road Ahead”.

The speech was delivered remotely for the first time in Michigan history and was markedly shorter than past speeches as a result.

The Governor reminded viewers of the bipartisan successes of the past year through agreements reached on the pandemic-impacted budget, the MI Reconnect plan for job training support and grants, and the Clean Slate package with delivered criminal justice reforms. She called for similar bipartisan action in the coming year.

Much of the speech focused on the Administration’s efforts to fight the pandemic, but on the policy front, the Governor identified proposals to improve K-12 education funding, expanded unemployment benefits, a new program to provide teacher support grants, and a call to renew the expired Good Jobs For Michigan economic development incentive that was first utilized by Pfizer at their Michigan facility that is now providing the COVID-19 vaccine.

Governor Gretchen Whitmer delivers her 2021 State of the State Address on Jan. 27.

Of interest to League members, the Governor went back to the road funding issue by calling for the Legislature to work with her to expand local road funding options.  It is expected that this will be a more collaborative recommendation, with no specific end result in mind, but pointing to bills introduced last term that would have provided for the option of a local vehicle registration fee and allowed for a local gas tax to be implemented.

She also called again for passage of her water infrastructure proposal she announced in the fall.  The MI Clean Water plan would reallocate $500M in existing federal revenues and state bond funds to support local clean water and contaminate clean-up investments.

In response to the speech, the Municipal League released this statement. League CEO and Executive Director Dan Gilmartin also wrote this opinion piece for Crain’s Detroit Business Forum series about how our Legislature and Governor can help communities emerge from the pandemic in 2021.

More details on these initiatives and other spending priorities are expected in two weeks when the Governor unveils her next budget recommendation.

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.

Lame Duck Round Up – Week 1

This week kicked off the first full week of lame duck legislative activity since the November election.  The League’s advocacy team is engaged on multiple fronts to promote a number of pieces of legislation we have been supporting and defending against a host of proposals that will harm local control and local budgets.

While the full calendar of expected lame duck session days is still a bit murky, our team is preparing for this lame duck period to extend through December 17th, giving legislators and committees two more weeks to try and complete legislative priorities.

Given that limited schedule, this first week of action focused on putting a large number of bills in play so that they could have enough time to be completed before the final adjournment for the year.

The following is a brief summary of action that occurred this week on bills that the League’s State & Federal Affairs team is engaged with…

  • HB 5824-5825 – These bills would codify the Governor’s Executive Order from earlier this year, that the court’s struck down, which extended the March and July Boards of Review.  The League supported these bills in Senate committee earlier this week and the full Senate voted today in unanimous support.
  • SB 1234 & HB 4828 – These bills are identical to each other and amend the current residential property tax poverty exemption to assist with various COVID-related impacts residents are facing as they attempt to apply for the exemption.  The League and the City of Detroit testified in support of these bills in both the House and Senate committees this week.  The full Senate reported SB 1234 unanimously this afternoon and further work is expected on the bills next week.
  • SB 11051106 – These two bills would exempt all utility-grade solar projects from the industrial personal property tax and replace that lost property tax revenue with a $3500/MW Payment In Lieu of Tax.  This amounts to pennies on the dolar for many local units versus the existing tax liability and would require mandatory approval of the exemption by all local units. The League previously testified in opposition to these bills, but did indicate a willingness to engage in discussions on a more reasonable PILT alternative that communities would have the option to employ, if this was a development they were choosing to incent. These bills were reported by the Senate in their original format earlier today along a mainly party-line vote and we continue to oppose.
  • SB 1153 & 1179 & HB 6198 & 6284 – These four bills are part of four identical tax exemption packages being considered by both the House and the Senate to provide Meijer and other commercial retailers with full sales, use, and personal property tax exemptions for all large-scale consumer goods handling warehouse distribution equipment and so-called “micro-fulfillment” system equipment used by retailers to assist with filling online orders.  The League and all other local government and school groups testified in both chambers in opposition to these bills.  The Senate reported the bills from committee yesterday and are expected to vote on the package later today.
  • SB 1203 – Would amend 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. While the League took no position on this legislation, we are tracking its movement and making the argument that this proposal should be accompanied by a similar freeze in work location for remote workers whose ordinary work location falls within a city income tax community.
  • HB 6454 – This bill was introduced earlier this week to address the negative interactions between Headlee and Proposal A before any property value reductions from the current pandemic recession impact local budgets.
  • SB 676 & 1137 – These bills have been developed in response to a recent Michigan Supreme Court decision that found that all “excess” proceeds from a tax foreclosure sale must be paid to the former owner of the property.  This court  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 or work group discussions and negotiations with local units, the County Treasurers Association, and the Michigan Dept of Treasury, these bills were reported from the Senate this week by a unanimous vote.
  • SB 431 – The League continues to strongly oppose this blatant move 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 brought up for a vote on the Senate floor later today and the League is vigorously working with our allies to secure enough votes to block its passage.
  • HB 6207 and SB 1246 – This legislation extends the current Open Meetings Act allowance for remote meetings during the current pandemic.  The current sunset date of 12/31/2020 would be extended through March of 2021 under the bill. The League has made this change a primary focus of our advocacy during lame duck. The bill was reported by House committee earlier this week and is expected to move off the House floor early next week.
  • HB 5822 – This League supported this legislation in House committee earlier this week to allow the City of Grand Rapids to establish their own Land Bank Authority in light of the recent dissolution of Kent County’s Land Bank.
  • SB 54 – This bill would restore Michigan’s state-level Historic Tax Credit program that was repealed under former Governor Snyder.  This proposal has long been supported by the League and was reported unanimously from committee and overwhelmingly out of the Senate earlier today.
  • HB 6440 – This is the main bill in a more than 100-bill package that would reform 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.  The package was brought up on the House floor where it awaits sufficient support for passage.
  • HB 4035 – Legislation that allows regulation of dangerous behavior of dogs without reference to breed.  The League is neutral on this bill following significant negotiations to achieve the current compromise language and the bill was reported from Senate committee earlier this week.
  • HB 6448 & 6467 – These bills provide amendments to the recently enacted COVID employment protections that were passed earlier this fall by expanding the types of critical infrastructure workers exempt from the new law’s 14 day quarantine requirements. The League testified in support of both HB 6448 and HB 6467 in the House Judiciary Committee along with officials from the cities of Oak Park and St. Clair Shores, while also stressing the importance of incorporating all critical municipal services, like water and wastewater, in the exemption from the quarantine requirements.  Both bills passed House Judiciary Committee and await action on the House floor.
  • SB 234 – This proposal would allow Police Academy enrollees to be held accountable for tuition support from a municipality if they do not end up working for that community.  The League supports this proposal and it was reported from committee earlier this week.
  • SB 714  – Bill provides for the erection of certain emergency structures to prevent shoreline erosion.  Following a number of months of workgroup negotiations with EGLE, the League supported the version that was reported by the House committee this week.  The compromise proposal will streamline the application and processing timeline and allow for coordinated application processing with the Army Corps of Engineers.
  • HB 4733 Speed Limits – This bill would further clarify local government’s ability to adjust speed limit below the 85th percentile speed when we are able to demonstrate a situation with hazards to public safety through an engineering and safety study. This bill was voted out of House Ways and Means Committee this week with the League’s support.
  • SB 12151218 Movable Bridges – The League and Bay City officials testified in support of a package of bills in Senate Economic and Small Business Development Committee this week that would 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, legislation was needed that would allow 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. This package received bipartisan support this week as it moved unanimously out of the Senate.
  • HB 5762 – Provides for waste water or drinking water energy performance contracting projects to be funded by the state revolving loan fund. The League supported this legislation based on the added flexibility to this program that will continue to increase opportunities for funding for municipalities.  The bill was reported from House committee earlier this week and awaits final floor action.

Many of the bills outlined above will likely see continuing action next week.  League members are encouraged to connect with their legislators on these issues.  Please reach to anyone of the State & Federal Affairs team if you have questions on these or any other bills.  Thank you for your support!

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 – Hazard Premium Payroll Deadline Extended

Earlier today, Governor Whitmer signed House Bill 5396, the omnibus budget for the state fiscal year that starts tomorrow, October 1st.

The Senate Fiscal Agency summary of the budget agreement can be reviewed here.

The House Fiscal Agency analysis can be viewed here.

Major components of the budget deal included:

  • A restoration of the August 2020 $97 million statutory revenue sharing cut.  For the coming year, statutory revenue sharing will be funded at the same level as originally set for last year.
  • An extension of time for communities to pay out federally funded CARES Act first responder hazard pay premiums (see below).  The payroll deadline was moved out from September 30th to October 31st, based on a Municipal League request.
  • A $35 million increase to local road agencies (counties and cities/villages) based upon the final implementation of the $600 million state income tax earmark as part of the 2015 road funding deal.
  • $24 million was appropriated as disaster relief grants to help areas around the state that have been devastated by flooding.
  • The Business Attraction & Community Revitalization Program within MEDC was increased by $20 million.
  • Federal Community Development Block Grant funding was increased by $15 million.
  • $5 million was appropriated in anticipation of the passage of the League-supported Senate Bill 54, which would restore the Michigan Historic Preservation Tax Credit program.
  • A one-time authorization of $800,000 for blight removal grants in Redevelopment Ready Communities.

In response to the Governor’s budget signing, the Michigan Department of Treasury released the following information relative to the payroll time extension for hazard pay and a reporting deadline extension for funds received as a result of the August revenue sharing swap…

Updates for CARES Act Grant Programs

The Michigan Department of Treasury has a few short updates and reminders about the First Responder Hazard Pay Premiums Program (FRHPPP) and Coronavirus Relief Local Government Grants (CRLGG) Program.

First Responder Hazard Pay Premiums Program (FRHPPP)

  • Today, the Gov. Gretchen Whitmer signed legislation that extends the deadline for when eligible hazard pay premiums must be paid to employees, changing the date from September 30, 2020, to October 31, 2020.
  • The application deadline for submitting reimbursement requests remains September 30, 2020.

Coronavirus Relief Local Government Grants (CRLGG) Program

  • The CRLGG Program’s first quarterly reporting due date will be extended. The Quarterly Financial Status Report was anticipated to be due on October 7, 2020. The federal government provided the state of Michigan an extension, so this date will be extended for local units of government.
  • A new date for local reporting has not been set yet. The reporting will be done in an online system that will launch mid-October. We are finalizing training sessions and due dates. More information will be forthcoming.
  • If a local unit does not plan to spend all their CLRGG Program funds, unused funds must be returned to the state Treasury Department. Returned payments must be accompanied by Form 5733, Treasury CARES Act Return of Funds Received Form. Form 5733 is available on the CRLGG website.

Additional Information

Additionally, the Michigan Department of Treasury has developed a webpage with numbered letters, memorandums, webinars, and resources regarding COVID-19 updates for local governments and school districts. This webpage was created to ensure Michigan communities have access to the most up-to-date guidance and is updated frequently with information and resources as they become available.

Questions about CARES Act-funded grant programs should be directed to the Revenue Sharing and Grants Division at 517-335-0155 or Treas-CARES@michigan.gov.

 

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

$2 Trillion Federal Stimulus Bill Headed To President

The US Senate passed H.R. 748, the CARES Act, Wednesday night and the House voted Friday to send the bill to the President.  The bill appropriates more than $2 trillion as an economic stimulus effort in response to the COVID-19 pandemic.

Within the final proposal, a $150 billion stabilization fund for state and local governments was secured that MML and NLC had advocated for with our congressional delegation.  The $150 billion will be distributed to states and directly to local governments that have a population greater than 500,000.  Local governments of less than 500,000 population would receive any funding from the state’s allocation.  Early estimates show Michigan receiving over $3.8 billion from this fund.

The bill also provides money for community development block grants and provides relief to the municipal bond market by allowing the purchase of municipal securities (with maturities greater than 6 months) in the secondary market.

In comments from our partners at NLC, one key item they were unable to get corrected relates to the previous federal stimulus bill, public law 116-127 (HR 6201), the Families First Coronavirus Response Act.  Under this new law, governmental employers are required to provide paid sick leave and paid emergency family leave. However, unlike most employers, governmental employers will not get the benefit of the tax credits for providing these benefits.

Below you will find a list of key items that NLC had been advocating for in the Senate bill based upon the latest version they were able to review before passage:

AIRPORTS

Federal Aviation Administration, Airport Improvement Program (AIP) – $10 billion to maintain operations at our nation’s airports that are facing a record drop in passengers. AIP funds will be distributed by formula.

Essential Air Service (EAS) – $56 million provided to maintain existing air service to rural communities. This funding is necessary to offset the reduction in overflight fees that help pay for the EAS program.

TRANSIT

Federal Transit Administration (FTA), Transit Infrastructure Grants – $25 billion for transit providers, including states and local governments across the country, for operating and capital expenses. Funding will be distributed using existing FTA formulas.

RAIL

Amtrak – Provides $492 million in grants for the Northeast Corridor and $526 million in grants for the broader national network to cover revenue losses related to coronavirus. In addition, funding is provided to help states pay for their share of the cost of state supported routes.

USDA

  • RURAL DEVELOPMENT – $145.5 million
  • RURAL BUSINESS COOPERATIVE SERVICE – $20.5 million

HHS

  • Low Income Home Energy Assistance Program (LIHEAP)  $900 million to help lower income households heat and cool their homes.

EPA

  • $770,000 for the Superfund program to prevent, prepare for, and respond to coronavirus, domestically or internationally for necessary expenses for cleaning and disinfecting equipment or facilities of, or for use by, the Environmental Protection Agency

Commerce

  • Economic Development Administration: $1,500,000,000
  • Manufacturing Extension Partnership: $50,000,000
  • Legal Services Corporation: $50,000,000

Small Business Administration

  • Economic Injury Disaster Loans: $562,000,000

HUD

  • Tenant-Based Rental Assistance: $1,250,000,000
  • Project-Based Rental Assistance: $1,000,000,000
  • Public Housing Operating Fund: $685,000,000
  • Community Development Block Grants: $5,000,000,000
  • Homeless Assistance Grants: $4,000,000,000
  • Housing for the Elderly: $50,000,000
  • Housing for Persons with Disabilities: $15,000,000

Broadband Connectivity

  • $25,000,000 for U.S. Department of Agriculture Distance Learning, Telemedicine and Broadband Program
  • $100,000,000 extension for U.S. Department of Agriculture ReConnect rural broadband competitive grant/loan program
  • $200,000,000 for Federal Communications Commission telehealth pilot program

Law Enforcement, Public Safety & Criminal Justice

  • Resources for Federal, State and Local Law Enforcement: $850 million for the Byrne-Justice Assistance Grant Program (Byrne-JAG)
  • Federal Bureau of Prisons: $100 million
  • Federal Law Enforcement: $55 million for the Federal Bureau of Investigation, Drug Enforcement Administration, U.S. Marshals Service, and U.S. Attorneys
  • Federal Judiciary: $7.5 million for three accounts in the Judicial Branch.
  • Family Violence Prevention Services: $45 million to support families during this uncertain time, and to prevent and respond to family and domestic violence, including offering shelter and supportive services to those who need it.

Personal Protective Equipment

  • Defense Production Act: $1 billion to allow the Department of Defense to invest in manufacturing capabilities that are key to increasing the production rate of personal protective equipment and medical equipment to meet the demand of healthcare workers all across the nation.
  • Assistance to Firefighter Grants: $100 million for personal protective equipment for first responders.

Disaster Assistance

  • Disaster Relief Fund: $45 billion to provide for the immediate needs of state, local, tribal, and territorial governments. Reimbursable activities may include medical response, personal protective equipment, National Guard deployment, coordination of logistics, safety measures, and community services nationwide.
  • Emergency Management Performance Grants: $100 million for state, local, territorial, and tribal governments to support coordination, communications, and logistics.
  • National Guard: $1.4 billion for deployments to sustain up to 20,000 members of the National Guard, under the direction of the governors of each state, for the next six months in order to support state and local response efforts.
  • FEMA’s Emergency Food and Shelter Program: $200 million

The National Conference of State Legislatures has also provided the following summary of the Senate’s action with additional links to supplementary information – NCSL link.

Speaker Pelosi and officials with the Federal Reserve have indicated the potential for additional additional legislative or administrative stimulus support and both have identified state and local government needs as candidates for additional support.  We will provide additional information  as it becomes available following the expected House action and signature by the President.

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

Whitmer Administration Pitches FY21 Budget Proposal

In addition to the League’s official media statement in response to the Governor’s budget presentation yesterday, here are some of the more critical details for League member communities:

The Governor’s Fiscal Year 2020-21 budget utilizes $11 billion in General Fund dollars, just barely higher than the $10.7 billion spent in the 2000 state budget.  Overall this budget proposal would spend nearly $62 billion from all sources, up almost 4% from the current budget year.  With limited new revenue to spend and the ongoing debate over road funding, the Governor focused most of her new programming proposals on the K12 education budget and talent/job training programs.

Constitutional Revenue Sharing payments are estimated to increase by 1.9% ($16.4M) over current year directly tied to expected sales tax revenue growth.  These dollars are distributed to all CVTs on a straight per capita basis.

Statutory Revenue Sharing payments are proposed to increase by 2.5% ($6.5M).  These dollars would flow in direct proportion to what eligible CVTs received in this current budget.

A new grant program that would allocate $40M in one-time dollars for planning and infrastructure improvements that would address municipal impacts from climate and high-water erosion concerns ($10M for local government planning and $30M for infrastructure projects).  Planning grants will be limited to a $200,000 maximum per award and infrastructure grants limited to no more than $2.5M per award.  A 20% local match will be required.

A new Rapid Environmental Contamination Response program is being proposed that would be funded with $20M to deal with initial abatement activities at contaminated properties.

While the MDOT budget proposal does not reflect any of the revenue related to the Governor’s proposed $3.5B bonding proposal for state trunkline roads, it does include about $200M more than the current year budget, with $132M of that amount coming from the final phase of the General Fund earmark diversion from the 2015 road funding package and nearly $50M in expected increased federal highway revenues.  Transit and rail programs are also proposed to receive an additional $30M under the Governor’s budget proposal.

The Community Revitalization and Business Attraction program at MEDC would see their line item returned to prior year funding levels ($100M) following the current year’s $20+M reduction.

An additional $36.5M is recommended to continue funding local court system costs for indigent defense commission standard requirements.

The budget proposal also calls for a supplemental/current year appropriation of $14M to fund local clerk expenses related to the upcoming March Presidential Primary election.

Copies of the Governor’s Executive Budget Proposal can be downloaded here.  Specific proposal briefing papers and copies of the proposed budget bills can be viewed on the State Budget Office webpage here.

Now that the Governor’s budget has been presented, the House and Senate Appropriations committees will begin their review of the overall budget and each individual department starting next week.  The Senate General Government budget subcommittee is already scheduled to begin reviewing the budget that houses revenue sharing on February 12th.  Legislative review and deliberation will occur through the spring break period, with the May Consensus Revenue Estimating Conference serving as the final benchmark in the process before legislative leaders and the Governor sit down to hammer out final details in an effort to complete the budget prior to the new July 1st deadline.

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

Legislature Officially Hits Halfway Mark of Term

With the voting this week, the Legislature officially wrapped up their activity for the year and reached the halfway point of the 2019-2020 legislative term.  The House and Senate are now on recess until January 8th.  All bills introduced in 2019 continue to remain eligible for action until the end of 2020.

Most of the Fall/year-end action these past two weeks has centered on arriving at a deal to resolve the budget cuts and transfers the Governor applied to the Legislature’s budget plan that was submitted just ahead of the October 1st beginning of the current fiscal year.  Following the Governor’s $1.5 billion of cuts and shifts, the debate over finding a compromise heated up and resulted in a deal that was sent to the Governor early this week.  Senate Bills 152 and 154 and House Bills 5176 and 5177 comprised the main pieces of this long-awaited agreement and encompass restoring about half of the GF/GP line item vetoes.  In another action, the Legislature also approved a series of budget transfers totaling over $82 million.  Of key interest for League members, the SB 152 supplemental restored the full $27 million for commercial forest, purchased lands, and swamp/reverted PILT payments to local units of government.  Other impacts to certain local units of government were also restored, like secondary road patrol grants, county jail reimbursements, $15 million for PFAS and emerging contaminate clean-up, blight removal and urban search and rescue grants, $10 million for 2020 census related activities, and $13 million more in GF/GP for road repairs.

The two House Bills moved in conjunction with the budget bills establish a new requirement that the state budget be completed by July 1st every year and that any future State Administrative Board transfers not occur without prior notice to the Legislature.

The other item of focus during the last session days of 2019 related to creating new gaming authority for Michigan’s three commercial casinos and the state’s tribal gaming casinos.  The new authority outlined in House Bills 4307 and 4916 (among other bills) paves the way for internet gaming and sport betting in Michigan.

In other legislative activity this Fall, the House moved HB 5124 with a nearly unanimous vote over to the Senate for future consideration.  This legislation provides an additional, optional tool for local units of government to coordinate with their county to assist residents already afforded a poverty exemption from losing their homes to tax foreclosure.

A six bill legislative package intended to provide more protections for local units of government and stricter requirements for asbestos abatement contractors was recently reintroduced and reported from the House Natural Resources committee. The League has specifically engaged with House Bills 5046, 5047 and 5050. These bills will require asbestos abatement contractors to provide an affidavit to the local unit of government detailing any outstanding environmental violations or criminal offenses prior to entering the contract, require the community contact the Department of Energy, Great Lakes and Environment to investigate any outstanding consent orders, judgement or criminal offenses, and allow local governments to include a provision in a contract that would allow the municipality to withhold any payment to a contractor found by EGLE to have violated environmental regulations within the last 12 months. The full package is anticipated to appear in House Ways and Means Committee in January.

This first year of the 2019-2020 term wrapped up with the League working against a number of local zoning preemption bills. HB 4046 dealing with the zoning of short-term rentals had one hearing where local units of government from across the state expressed their opposition. As a result that bill sits in the House Local Government committee without the support needed to advance it. SB 431 looks to further restrict municipalities in regulating aggregate (gravel) mining operations. We anticipate this bill getting a hearing in Senate Transportation committee, and a bill to be dropped on the House side, early next year.

On the economic development front, SB 54 seeks to restore the state historic tax credit  and had its first hearing earlier this week. We are working to secure another hearing early in 2020, continuing discussions and encouraging legislators to restore this needed tool. SBs 493 and 494 seek to extend the sunset dates of the Commercial Rehabilitation Act and the Commercial Redevelopment Act. Both bills have cleared the Senate and we anticipate the House taking them up early next year. The Good Jobs for Michigan legislation from last term is also seeking a sunset extension through SB 492. This bill is on the Senate floor awaiting a vote.

Since the Governor first took office there has been a constant drumbeat on increasing funding for transportation. Unfortunately the conversation never really materialized in 2019. There is hope that 2020 could still bring new revenue but the consensus is that it won’t be in the form of a .45 cent gas tax increase. The League will continue its engagement with the administration and legislative leaders to pursue a plan that invests in local roads and transit.

Both the House and Senate introduced a package of bills this Fall that would reform a number of transportation issues. Everything from allowing locals to raise their own gas tax (HB 4963) and vehicle registration fees (HB 4964), to requiring approval and identification of funding sources when expanding a local road (SB 521) were debated. Many of the bills are still being worked on, but HB 4966 which would allow cities and villages more flexibility when it comes to spending their Act 51 revenue did passed out of House Transportation Committee. We are hopeful that the new year will begin with a renewed attention on local transportation funding options and we will continue to work with Chairman O’Malley and Representative Sneller on these bills.

Finally, EGLE has announced three public comment dates in mid- January for the PFAS Draft Rules for Supplying Drinking Water to the Public.  Grand Rapids (Jan 8) , Ann Arbor (Jan 14), and Gaylord (Jan 16) are the three communities selected to host these public comment hearings based on their unique experiences with PFAS contamination. The PFAS draft rules were recently released from the Environmental Rules Review Committee on Nov. 14th. The ERRC decided after deliberation over two meetings to allow the rules to move on to the public comment phase, but they retained their authority to bring the draft rules back to the ERRC following the public comment period and before review from the Legislature’s Joint Committee on Administrative Rules (JCAR). The League provided testimony on the stakeholder feedback process and initial review of the draft rules at the Oct. 31 ERRC meeting. See our blog with the details on the public hearings here.

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

State Budget Battle Goes Into Overtime

As expected, following the Legislature’s movement of budget bills that the Administration had not signed off on, Governor Whitmer responded aggressively to the legislative spending proposal by issuing 147 separate line items vetoes within the 16 departmental budget bills she signed.  Signing the bills allowed her to avoid a state government shutdown, while the nearly $950 million in spending cuts across all but two of the budgets served notice to legislative leaders of the need to return to the negotiating table.  Following the release of the vetoes, the State Administrative Board met today, on the first day of the new fiscal year, and utilized an obscure legal procedure that allowed the Governor to shift nearly $625 million additional dollars to different lines/programs from those newly appropriated, original line items within 13 different department budgets.

The following budget programs/line items may be of interest to League members:

  • Revenue sharing – Constitutional payments are dictated by sales tax growth which is expected to increase by about 1.7% over current year ($14.2 million) – Statutory revenue sharing payments received an increase of 2.3% for $5.8 million matching the House’s recommendation from earlier this spring and only slightly less than the Governor’s original 3% increase proposal.
    • Additionally, all statutory revenue sharing payments have been rolled into the base appropriation – no more “one-time” or supplemental grants
  • The $1 million new line item for local assessor training grants resulting from last fall’s assessing reform legislation was vetoed by the Governor
  • More than $27 million of local payments in lieu of taxes for Commercial Forest, Purchased Lands, and Swamp & Tax Reverted Lands was vetoed by the Governor
  • Numerous Treasury Local Government Program lines totaling nearly $5 million were shifted and rolled up into one line as a result of State Ad Board actions.
  • MEDC/MSHDA –
    • The Governor shifted $500,000 for blight removal grants ($250,000 rural blight elimination & $250,000 city of Detroit projects performed by nonprofits) along with four other line items totaling over $9 million and transferred those funds into workforce development programs.
    • The Legislature reduced the Business Attraction & Community Revitalization by $26 million ($105.4 million to $89.4 million) with $10 million of the reduction redirected to the new Rural Jobs and Capital Investment Fund that was created last fall.  The Governor vetoed this $10 million redirection.
    • Community Development Block Grants were funded at $47 million, same as previous year
    • The Legislature increased Pure MI funding to $37.5 million (an additional $1.5 million).  The Governor vetoed the entire line.
  • EGLE –
    • $120 million for water infrastructure was appropriated, matching closely to Gov Whitmer’s original budget proposal for clean water projects
      • $30,0000 for Lead and Copper Rule implementation
      • $40,000,000 for PFAS and emerging contaminants
      • $35,000,000 for Drinking Water Revolving Fund loan forgiveness
      • $7,500,000 for affordability and planning
      • $7,500,000 for private well testing – the Governor shifted these dollars into the Lead and Copper Rule implementation line item through State Ad Board action
    • Surface water grants to watershed councils ($675k), Cooperative lakes monitoring program ($150k), and PFAS and emerging contaminates grants to municipal airports ($15m) were among the EGLE line items vetoed by the Governor.
  • LARA –
    • $80 million in MI Indigent Defense Commission grants were continued for the coming year – slight reductions to reflect one-time costs from first year being removed
    • No line item vetoes in this budget, but a number of lines were shifted through State Ad Board action to allow greater spending flexibility by the Department
  • State Police –
    • The Governor vetoed the entire $13 million Secondary Road Patrol program line item.
    • The $654,000 Local Law Enforcement Agency Training Grants line item and MI International Speedway traffic control support ($600,000) were vetoed by the Governor.
    • Through State Ad Board action, the Governor also shifted more than $2 million from a proposed new Trooper School into the Forensic Science line and another $2 million from the First responder communication network line item into an In-car camera video streaming network line item.
  • MDOT –
    • The Legislature included $400 million in GF ($132 million to fully implement the 2015 package one year early, $175 million for roads, $25 million for the Local Bridge programs, $68 million for special projects include specific bridges that Governor Whitmer visited during summer press events). This does not include an addition $468M in earmarked income tax revenue that is a result of the 2015 package. When combined, $868M in non-user fee revenue was proposed to go to roads.  The Governor vetoed $375 million of this GF addition and then shifted the remaining $25 million into transit programs, with an additional $6 million each for Local Bus Operating and Public Transportation Development Service Initiatives, and $13 million sent to the Transit capital – urban line item.
    • The Legislature included $1 million for demolition of the Carbide dock as part of the Soo Locks project which the Governor shifted through the State Ad Board, along with $600,000 from the Marine passenger service line item over to the Intercity Passenger Services line item for a combined addition to that line of $1.6 million.
    • The Governor also used the State Ad Board to shift nearly $40 million from the Rail freight and rail economic development line over to the Rail passenger service line item.

Numerous other legislative priorities were vetoed or redirected by the Governor today, prompting strong reactions on both sides of the political aisle.  The Governor has called for a Thursday meeting of the four “quadrant” caucus leaders to get back to the budget negotiating table.  It remains to be seen how closely the Governor will tie further budget negotiations to a resumption of long term road funding discussions.

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