Congress Reaches Short Term Budget Deal, Administration Proposes Tax Overhaul

Congress has reached a short-term budget deal that adheres to existing overall spending levels and, for the most part, preserves funding for city priorities. Due to the advocacy efforts of the League, NLC and many other stakeholders, Congress did not adopt any of the mid-year cuts that had been proposed by the Trump Administration. This ensures cities will not face unanticipated shortfalls or systematic clawbacks of spent-out FY17 federal funds.

Key programs the budget deal maintains funding for are CDBG and the Great Lakes Restoration Initiative. Specific program outcomes are presented below and indicates whether funding was Decreased, Preserved, or Increased.

Transportation

  • TIGER: Preserved
  • Federal Transit Administration Capital Investment Grants: Increased
  • Essential Air Services: Preserved

Housing

  • CDBG: Preserved
  • Homeless Assistance: Preserved
  • Housing Assistance Vouchers: Preserved

Labor / Education / Health

  • AmeriCorps (Corporation for National Community Service): Preserved
  • IMLS (Library Services): Increased
  • Job Corps: Preserved
  • LIHEAP (Low-Income Housing Energy Assistance Program): Preserved
  • SSBG (Social Services Block Grant): Preserved
  • CCDBG (Child Care Development Block Grant): Increased
  • 21st Century Community Learning Centers: Increased
  • State Response to the Opioid Abuse services: Increased to $500 million

Interior-EPA

  • Clean Water and Drinking Water SRFs: Preserved
  • Brownfields: Preserved
  • Superfund: Preserved
  • WIFIA: Preserved
  • Great Lakes Restoration Initiative: Preserved

Energy-Water

  • Department of Energy Office of Energy Efficiency and Renewable Energy: Increased

Commerce

  • Economic Development Administration Funding: Increased
  • U.S. Census: Increased

Justice / Homeland

  • New funding for countering heroin and opioid epidemic: Increased to $103 million
  • State Local Law Enforcement Grants: Decreased $128 million to $2.08 billion
    •  Byrne JAG: Decreased by $150 million to $1.26 billion
    •  Community Oriented Policing (COPS): Increased
    • Juvenile Justice: Decreased by $23 million to $247 million
    • Violence Against Women Act: Increased
  • State and Local Homeland Security grants: Preserved
    • Urban Area Security Initiative: Increased
    • Flood Hazard Mapping and Risk Analysis: Decreased by $10 million to $178 million
    •  Predisaster Mitigation Fund: Preserved
    • Assistance to Fire Fighters and Staffing for Adequate Fire and Emergency Response (SAFER) grants: Increased
  • Sanctuary Cities: No change to current law

Agriculture

  • Rural Water and waste Water: Preserved
  • Rural Housing: Increased

Additionally, the Trump Administration released their framework for tax reform. In a call with NLC staff late last week, the outline provided for the Administration’s tax overhaul proposal appears to eliminate all state and local income tax deductions, only preserving the charitable and mortgage exemptions.  What was not included in the proposal was any mention of eliminating the tax-free status of municipal bonds.  NLC staff view this omission as a big victory and their contacts in the White House have indicated that municipal bond tax status will not be addressed within a tax reform conversation.  Instead, this issue will be included in the infrastructure spending plan that will likely be a September conversation for the Administration.

The League will continue to work with NLC to show our support for local government priorities in the areas of tax reform, infrastructure and the federal budget.

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.

Michigan Chapter APWA Great Lakes Expo May 23-25 at Grand Traverse Resort

The Michigan Chapter of the American Public Works Association (APWA) will be hosting its annual Great Lakes Expo beginning Tuesday, May 23rd, with educational sessions continuing on May 24th and 25th. The Expo will offer three session tracts for those in Public Works: Management, Operations and Fleet Maintenance. This year’s theme, “Headliners in Public Works”, is embodied in Tim Skubick’s, WWJ Newsradio 950, keynote address in which he will dive into the realm of managing public relations. Attendees will have the opportunity to receive a Michigan Legislative Update from the League’s lobbyist and a Federal Legislative Update from Marty Williams, APWA National. Additional session topics will include:

  • Green Infrastructure Financing,
  • Trenchless Technologies for Water Main,
  • Utilizing Mobile GIS,
  • OMID Project Overview
  • Infrastructure Remaining Useful Life Planning,
  • Intelligent Public Works and Organizational Culture,
  • Workzone Safety,
  • Non-motorized Trail Crossing Design,
  • Application of “Lean” Processing in Public Works,
  • Tier 4 Emission Requirement Update,
  • Various equipment maintenance updates

To register for the Great Lakes Expo, visit http://michigan.apwa.net/, call (248) 370-0000 or e-mail tspencer@bellequip.com.

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.

New Legislation Seeks to Eliminate Local Control in Zoning

Last week legislation was introduced in both the House and Senate to amend the Michigan Zoning Enabling Act. The bills eliminate a local unit of government’s ability to regulate short-term rentals. House Bill 4503 and Senate Bill 329, mirror each other in language, mandating all short-term rentals are a residential use of property and a permitted use in all residential zones. The League disagrees and believes short-term rentals operated as commercial business establishments are inconsistent with residential land use. 

In many places across the state, short-term rentals are taking over once vibrant residential neighborhoods and turning them in to areas transient in nature that go dark part of the year. This is having a detrimental impact on quality of life. An overabundance of short-term rentals can potentially remove affordable homes and housing units off the market leading to decreased enrollment in neighborhood schools. If enacted, this legislation will undo regulations municipalities have put in place to negate these negative impacts and prohibit other communities from regulating in the future. 

We need your help to stop this legislation! The Michigan Realtors Association assisted in writing the bills and are aggressively pushing for quick action. They have been contacting Representatives and Senators in an attempt to say municipalities are overstepping on private property rights, prohibiting property owners from maximizing the value of their property. We know this isn’t accurate, but need you to contact your State Representative and Senator today to urge their opposition for HB 4503 and SB 329! Even if short-term rentals are not an issue in your community, you should be very concerned about the impact of preempting local zoning efforts. If enacted, this legislation would set a dangerous precedent undermining decision-making at the local level. 

Also, please contact the committee chairs where the legislation has been referred urging them to not take up the bills. HB 4503 was referred to the House Committee on Tourism & Outdoor Recreation chaired by Representative Holly Hughes. SB 329 was referred to the Senate Committee on Local Government chaired by Senator Dale Zorn.

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.

Transportation Asset Management Conference May 25 in Mt. Pleasant

The Michigan Transportation Asset Management Council (TAMC) will sponsor
the 2017 Spring Asset Management Conference on Thursday, May 25, at the Mt. Pleasant
Comfort Inn and Suites Hotel and Conference Center, 2424 S. Mission Street, Mt. Pleasant, Michigan. The conference will once again provide a forum for state and local officials to examine the relationship between asset management and the condition of road and highway infrastructure.

With a theme of “From Policy to Practice,” the conference will focus on examples of best
practices at the national, state and local levels, and will offer attendees practical guidance on how agencies are managing transportation infrastructure using condition inventory forecasting and the incorporation of other utility data. This year’s conference will also feature panel conversations from leaders involved with the 21st Century Infrastructure Commission, Michigan’s newly created Infrastructure Asset Management Pilot Advisory Board, and bridge management experts from Michigan’s leading transportation agencies.

Conference registration is being handled by the Michigan Local Technical Assistance
Program (LTAP) by phone at 906-487-2102 or e-mail at ctt@mtu.edu. Registration also can be done online by clicking here. For hotel information and reservations please click here. Seating is limited so early registration is encouraged.

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.

Proposed Ambulance Service Tax Raising Concerns Among Municipalities

A proposal adopted in early 2015 to draw down additional federal Medicaid match revenue to support increased ambulance reimbursements is proving to be a bigger challenge to implement than originally believed and is bringing out potential unintended consequences that could be devastating to communities with publicly-operated ambulance services.

House Bill 4447 became Public Act 104 in July of 2015.  This legislation, among numerous other things, provided the Department of Health and Human Services with authority to develop a Quality Assurance Assessment Program (QAAP) on ambulance services as a financing mechanism to draw down additional Medicaid match from the federal government.  This same financing scheme has been used within other health care industries as a way to improve reimbursement rates for providers without straining the state’s budget.

As originally proposed, this mechanism would have imposed a state tax on ambulance run revenues that the state would have used to improve reimbursement rates for Medicaid-eligible ambulance runs.  In gathering the data and developing the formula needed to arrive at an appropriate tax rate, however, the Department interpreted federal guidelines as requiring that ambulance service providers needed to submit all local government revenues related to providing ambulance services, not simply revenues accrued from ambulance runs.  With this interpretation in place, publicly-operated ambulance providers stand to bear a much larger burden of the proposed QAAP tax than the private ambulance providers who do not provide additional EMS or fire services.

Additionally, the complexity of dividing out costs related solely to ambulance services in communities with multiple tax revenues supporting their fire and EMS services and/or personnel serving multiple functions, including ambulance service, and applying a tax on top of those existing taxes is causing alarm bells to sound for many municipalities that operate their own ambulance services.

The League is participating in meetings with the Department, fire chiefs and other municipal fire personnel, and state legislators in an attempt to get a better understanding of the potential that this program could cause a negative financial impact on communities.  While increased Medicaid reimbursement rates are a laudable goal, they cannot come on the backs of municipalities.  Enough concerns have been raised that warrant this concept be re-evaluated before being implemented.

If your community provides municipal ambulance service, please contact our office to discuss this issue and the potential impact on your community.

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 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.