State Budget Process Set to Resume Following Spring Recess

Budget subcommittees in both the House and Senate were hard at work last week wrapping up much of the initial work on their respective appropriation responses to the Governor’s FY17-18 proposed budget.

Responding to requests for additional funding from the League and other local government groups, the House General Government subcommittee sent House Bill 4232 to the full House Appropriations committee recommending a $12.4 million increase to the statutory revenue sharing (CVTRS) line item.  For communities currently receiving a CVTRS payment, these additional dollars would be distributed on a per capita basis, equating to an additional $1.62396 per person.  If adopted as part of the final budget framework, this would be the first statutory revenue sharing increase in three years and a welcome increase in light of last year’s overall revenue sharing cut as sales tax revenue driving Constitutional payments fell below the previous year.

The League also had the opportunity to testify before the Senate General Government subcommittee, making a similar case for increased funding for revenue sharing.  While the Senate subcommittee has yet to complete their proposal, public comments from members of the subcommittee seem to indicate an interest in looking at options for a funding increase to this line.

Once subcommittee work is completed following the spring break, the full Appropriations committees in each chamber will begin their consideration of the various budget recommendations, followed by consideration from the full House and Senate, all before the mid-May consensus revenue estimating conference.  Final budget action is on track for completion in early June.

Please contact your State Representative and Senator and urge them to support an increase to statutory revenue sharing.

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

Senate and House Take First Steps on Transportation Budget

This week the Senate Transportation Subcommittee passed SB 148 and the House Transportation Subcommittee passed HB 4242. Each of these bills appropriates just over $4.3 Billion in transportation revenue to MDOT, counties and cities and villages. Each of these budgets has a baseline appropriation of $491.2 million dedicated to cities and villages. This is an increase of $49.6 million over the current fiscal year.

SB 148 would create a grant based program that appropriates an additional $3.1 million to assist villages with a population under 2000 with resurfacing costs. Grants would be equal to 75% of an individual projects cost and could not exceed $250,000. The Transportation Asset Management Council would administer the grant program and would prioritize projects based on the greatest return on total infrastructure value.

HB 4242 would also dedicate addition resources to local roads by allocating $10 million from the Transportation Economic Development Fund and $2 million from the Local Agency Wetland Mitigation Fund. This would result in an additional $7.9 million for county road commissions and $4.1 million for cities and villages.

These bills are is still a work in progress. The budget is expected to be complete by June 1st so we are at the beginning not the end of the process. As the budget moves forward the differences between the two bill will need to be worked out. The League will continue to track these bills and provide you with ongoing updates as they forward.

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

House Committee Deadlocks on Physically Present to Vote Bill

Legislation that would ban elected government officials from voting remotely through Skype or conference call failed to get majority support in the House Committee on Oversight this week.

House Bill 4184 is a reintroduction of legislation which passed the House and Senate last term, but died after the House declined to vote on a Senate change. The legislation, as introduced, amends the Open Meetings Act to require an elected member of a public body be physically present to vote on an issue in order for a meeting to be considered open to the public. There is one exception that allows one remote video vote a year for a “good cause” such as a serious illness or a family member death.

The committee deadlocked 3-3 on moving the bill to the House floor when one Republican member joined the panel’s two Democrats in voting no. The vote was reconsidered and essentially tabled for the day.

Jennifer Rigterink is a legislative associate for the League handling economic development, land use and municipal services issues.  She can be reached at jrigterink@mml.org or 517-908-0305.

Senate Bill Impacting Municipal Construction Specifications Voted Out of Committee

This week SB 157 was voted out of Michigan Competitiveness Committee on 4-1 party-line vote.The bill states a public entity could not exclude any pipe and piping materials when soliciting bids for a public works project if the pipe and piping materials meets or exceeds the recognized standards for pipe and piping materials on similar projects as determined by the American Society for Testing and Materials (ASTM) or the American Water Works Association (AWWA).

The League believes this bill  would interfere with a municipalities engineer’s judgement and ability to specify pipe or pipe materials for water projects the reflect the needs of their system based on that systems specific needs. We are opposed to this legislation.

We do not believe the goal of this legislation is to provide fair and open competition as supporter have stated, but rather as a way increase the use of a product (PVC) on water and wastewater systems that they already can use, but in many cases and for many reasons choose not to. The bill incorrectly assumes that all pipe materials are the same and that the absence of a material (PVC) in a standard/specification requires state government intervention. Communities and engineers make different pipe material selections to reflect the unique needs and values of their community, considering operational and maintenance costs, and they should retain this ability.

The legislation threatens the important ability of engineers and communities to develop
standard specifications that reflect the needs and values of their community. These
communities are developing water and wastewater systems, not a series of individual projects. Standard specifications are used by federal, state and local governments for all type of infrastructure projects to ensure quality, safety and uniformity.

SB 157 could lead to a significant increase in bid protests and litigation over pipe selection on projects, thereby increasing costs, delaying projects, and subjecting engineers and communities to unnecessary litigation.

We encourage you to reach out to your Senator, express your opposition to this legislation and ask that it not be taken up for a vote on the Senate floor.

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

Revisions to the Lead and Copper Rule Proposed by the Governor

The Governor has proposed Lead and Copper Rule reforms saying “The federal rule is dumb and dangerous. We need a Michigan rule that is smart and safe.” The proposed changes will require both administrative rule changes and statutory changes by the legislature.

Proposed Administrative Rule Changes:

  1. Phase in a reduction in the Lead Action Level from 15 ppb to 10 ppb by 2020.
  2. Require most public water systems to perform a full system inventory identifying
    materials used, such as lead service lines.
  3. Require the establishment of Water System Advisory Councils for most
    community Public Water Systems to assure citizen membership, input, and
    access. The Councils will develop plans for community outreach and education,
    and collaborate with community groups to assure correct implementation of the
    LCR. The Councils will assure access to information regarding corrosion control,
    testing results, remediation processes, educational efforts and general water
    safety.

Proposed Statutory Changes:

  1. Strengthen sampling methods and require annual testing at state licensed
    facilities involving children and vulnerable adults, including schools, daycare
    facilities, nursing homes, health facilities, and adult foster care facilities.
  2. Require public disclosure of testing results or filters on every drinking water
    faucet in state licensed facilities involving children and vulnerable adults. Facilities
    exceeding standards will be required to take remedial action.
  3. Prohibit partial lead service line replacements.
  4. Require landowners and property sellers to disclose to renters or new
    homeowners of any service lines or plumbing that are known to contain lead.

The league will be tracking this issue closely, reaching out to our members for input and offering our thoughts to the administration on these changes.

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

Transportation Asset Management Council Award Nomination Request

We know there are individuals and agency’s making positive progress in the management of public infrastructure; these efforts need to be recognized!  Click the following link for a  memorandum announcing the request for nominations of individuals and organizations for the Michigan Transportation Asset Management Council’s Carmine Palombo Individual Award and the TAMC Organization Award. TAMC Award Nominations Request 2017

A core element of the TAMC work program is educating and reporting on best management practices. The TAMC award has been a tool to recognize leadership and promote success stories across Michigan since 2009.  Help us share these stories by submitting a nomination of a worthy person or organization.

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

Senate OKs Brownfield Redevelopment Bills

On Wednesday the Senate passed a five-bill package (SB 111, SB 112, SB 113, SB 114 & SB 115) which would allow “transformational” redevelopment projects to capture state tax when a gap is identified between the financial viability of a development project and the cost of building that development.

The legislation requires a certain level of private investment from each project based on the population size of the community the project will be located in. The League worked closely with the bill sponsor and stakeholders to have the investment threshold lowered for the lowest population group so more communities would have the opportunity for a transformational project if the legislation is enacted.

In addition to the private investment, a project must show a net economic benefit and get approval from the local unit of government, where the project will be located, before it would be eligible for state tax capture. Only one project could be approved in a community per year, and the total tax capture the state authorizes cannot exceed $40 million per year.

The legislation now moves to the House and has been referred to the Committee on Tax Policy.

Jennifer Rigterink is a legislative associate for the League handling economic development, land use and municipal services issues.  She can be reached at jrigterink@mml.org or 517-908-0305.

Early Morning Income Tax Vote Comes Up Short

After over 12 hours of behind the scenes negotiations, the Michigan House ended up voting down a third alternative for an income tax cut in the early hours of Thursday morning.  The amendments that were proposed to HB 4001 H-3 would have lowered the state’s income tax rate from 4.25% down by .1% per year for the next two years and then any further reduction down to 3.9% would have been conditioned on the state’s Rainy Day Fund having a balance of at least $1 billion.  If fully phased down as proposed, the legislation would have sliced more than $1.1 billion from the state’s General Fund revenues.  Once the final vote was tallied, the amended version only had 52 supporters, with 55 members voting against the measure (see page 4 of the linked pdf to see how each legislator voted).

The Municipal League was joined in opposition to this legislation by a broad coalition of organizations and individuals, including Governor Snyder.  As an organization we are extremely thankful for everyone who engaged with their State Representative this week, urging them to protect revenue sharing and local government services and opposing this bill.  We encourage you to reach back out to those legislators who voted No and thank them for their vote.

While the bill was defeated this morning, it is possible that the vote could be reconsidered in the coming weeks, so please be prepared to re-engage with legislators should this bill come back up.

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

League Testifies on Need to Restore Revenue Sharing

The House Appropriations subcommittee on General Government, which includes the appropriation for revenue sharing, met yesterday to begin their consideration of Governor Snyder’s budget recommendation for the upcoming 2017-18 fiscal year.  This week’s subcommittee hearing centered on revenue sharing and the Municipal League was invited to present our position on revenue sharing to the eight-member subcommittee.

The Governor recently recommended, for the third straight year, that statutory revenue sharing for cities, villages and townships remain flat, at $248.8 million.  The Governor cited an estimated 2.3% expected growth in sales tax revenue to boost Constitutional payments, despite the shortcomings of those same estimates in the budget year that just ended last fall (Constitutional revenue sharing payments fell by nearly $1 million compared to the previous FY).  In his original presentation, the Governor also pointed to the $109 million in additional revenue that local units of government received from the new personal property tax reimbursement process as a reason why he was not restoring dollars into revenue sharing, something which the League quickly responded should not be counted as a proxy for the many years of budget cuts and neglect.

Following a historical overview of the revenue sharing program from the House Fiscal Agency, the Municipal League used our opportunity to address the subcommittee by explaining the important role that revenue sharing plays in every community’s budget. We walked the legislators through the limited resources that communities have available to provide critical services and how this broken system has been disconnected from the economic recovery that the state’s budget has experienced in recent years and the critical need that exists for this budget to include additional funding for revenue sharing, above the Governor’s recommendation.  You can view a copy of the League’s presentation here – Gen Govt SubCommittee-Feb 2017.

Following our testimony, the Michigan Townships Association and the Michigan Association of Counties also addressed the subcommittee urging their support for additional funding.  The subcommittee will continue hearings over the coming weeks with their recommendation due around the spring break.

Please contact your legislator and urge them to support increased funding for revenue sharing.

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

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

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***UPDATE:   

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

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

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

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

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

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

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

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