Obsolete Property Rehabilitation Act Sunset Extension Approved

Following Senate approval earlier this year, the House today overwhelmingly passed SB 673, a bill to extend the sunset of the Obsolete Property Rehabilitation Act from December of this year until the end of 2026. This act has been used in communities across the state to assist in the redevelopment of obsolete buildings and putting properties back in to productive use.

Thank you Senator Horn for continuing to be an advocate on this issue and keeping a valuable local tool that assists our communities in redevelopment and economic development.

The legislation now goes to the Governor for his signature.

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.

Additional 2014-2015 PPT Reimbursement Funds Released

The Local Community Stabilization Authority (LCSA) announced the release of nearly $3.5 million of additional PPT reimbursements today.  In October of 2015, 214 cities received over $15.7 million as reimbursement for operating losses due to the small taxpayer exemption from 2014 and 2015.  Following a law change (HB 5176 – PA 124’16) to make a technical correction to the distribution formula, an additional $3.46 million is set to be distributed to those same eligible cities.  Checks are set to be mailed today, June 2nd, 2016.  The official notice from the LCSA can be read here – LCSA PPT Notice.June2016

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

Dark Stores Assessment Issue: Time is of the Essence, Contact Lawmakers this Weekend!

Please contact your state Representatives TODAY and leave a message asking for their support of HB 5578, which is the legislative fix to the Dark Stores assessment issue negatively affecting many of our communities. This is an extremely important issue that is already hurting many communities and will likely be impacting your community soon. Use our Action Center to get your Representatives contact information and send them a sample letter that we’ve drafted.

As you may have read, Michigan communities have momentum on this issue thanks to a Court of Appeals ruling Friday that validates the case against the Dark Stores property valuation method. Some people in the state Legislature view this court ruling as a reason for them not to take action on HB 5578. But that is not the case. The court ruling is good news but HB 5578 is still needed because it affirms the decision by the Court of Appeals and sets clear guidelines for the Michigan Tax Tribunal, where this issue originated.

The sponsor of this bill Rep. Dave Maturen has 26 co-sponsors from both parties and it passed out of the House Tax Policy committee in an 11-2 vote.

Please tell your Representatives to take up and vote in support of HB 5578 this week in the State House.

For further information about the bill and the previous committee testimony, please review these Inside 208 articles – “Committee Approves Dark Store Fix – Contact Your Legislator”, “New Dark Stores Solution…”  and “Michigan Municipal League Members Testify…”.  Or visit the League’s Dark Stores Information Page.

Senate Transportation Committee Votes to Eliminate Local Cost Sharing Requirement with MDOT

Act 51 currently requires that all incorporated cities and villages with a population larger than 25,000 to pay a portion of the Michigan Department of Transportation’s project costs for opening, widening, and improving state trunkline highways within that incorporated city or village. A city or village is required to pay 12.5% of the project cost if their population is greater than 50,000, 11.25% of the project costs if their population is between 40,000 and 50,000, and 8.75% of the project costs if their population is between 25,000 and 40,000. This statute affects 45 cities in Michigan.

SB 557, sponsored by Senator Knollenberg, would eliminate the requirement for incorporated cities and villages greater than 25,000 to cover a portion of the Michigan Department of Transportation projects cost. As Michigan works to develop a 21st century transportation network the League believes these 45 cities should no longer be required to subsidize MDOT’s costs for the following reason:

  • All country road agencies and incorporated cities and villages with a population less than 25,000 are not required to pay a portion of MDOT’s project cost creating inequity in the system.
  • The funds used to pay for the cost of these projects comes directly from the 21.8% percent of funding received by cities and villages under Act 51. This results in less than 21.8% of Act 51 funding actually being used on local roads.
  • These matching funds can cost a local road agency a significant portion of their Act 51 funding.
  • Covering these project costs can delay, reduce, or eliminate future rehabilitation or reconstruction projects and significantly hinder a city’s ability to conduct routine maintenance such as snow plowing
  • MDOT’s planning process allocates state spending on projects based on the needs of their system without taking into account a city’s ability to contribute to the cost of those projects as required by Act 51. An unexpected bill from the Department could cripple a city’s local road program for years

This week the Senate transportation committee agreed with the League’s opposition to this provision within Act 51 and unanimously voted to eliminate it.

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

Personal Property Tax Implementation Process Continues to Evolve

A series of bills amending the new personal property tax reform effort were signed by the Governor this month.  House Bills 5525-5527, 5545, and 5176 were all signed with immediate effect over the past two weeks.

The bulk of this package of bills arose from Treasury’s initial experience, early this year, with the first phase-out of Eligible Manufacturing Personal Property certification filings. As Treasury worked with the assessing and business communities, they discovered numerous concerns with the structure of the forms, filing deadlines, and process for dealing with corrections or amendments to those filings.  The main result in these bills was an agreement to allow a 2016-only extension of the EMPP filing window for businesses until May 31st of this year.  The bills also included amendments to address the state and local process for handling any additional filings and/or corrections that occur as a result of those filings.

While HB 5176 was originally requested by the League to address a technical concern with the distribution formula for revenue that is set to be sent to the 300+ cities that received a reimbursement check last fall for their small taxpayers exemption losses from 2014 and 2015, the extension of the filing window for EMPP also necessitated a short delay in the reimbursement schedule from PPT losses from October 20th, 2016 until November 20, 2016.  This delay will only impact the 2016 reimbursement payment timing.  Treasury has been awaiting the statutory correction to the formula so that they could distribute approximately $3.5 million additional dollars to those cities eligible for reimbursement of those small taxpayer exemption losses.  Reimbursement checks from this $3.5 million fund should be distributed before the end of this month.

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

State Reaches Revenue Consensus as Precursor to Finalizing Budget

The House and Senate Fiscal Agencies met with officials from Treasury this week to conduct the annual May Consensus Revenue Estimating Conference.  As a follow-up to the January revenue conference that established the basis for the Governor’s original budget presentation, this week’s conference is used as the baseline for final decision-making by Legislative leaders and the Governor on the current year budget and the FY 16-17 budget scheduled to begin October 1st.

As reported in many news stories this week, the state’s sales and corporate income tax revenues have been running below what was estimated in January for the current year while Medicaid and other human services caseload costs are running higher than expected.  The potential impact on the current and upcoming proposed budgets have been reported to be in the $400 million range, subject to numerous line item and policy adjustments that could alter that impact. The overall consensus is that the proposed spending levels in next year’s state budget will need to be scaled back, but whether any reduction would be proposed for statutory revenue sharing payments is yet to be determined.  Early comments from legislative leaders are that they will look to reduce proposed increases from the Governor’s original proposal before looking at line items like revenue sharing.  The League continues to advocate aggressively to protect the existing payment level and urge the Legislature to find ways to improve the funding level in this critical item.

The continuing weakness in sales tax collections will have an impact on Constitutional payments to communities around the state for the remainder of this year.  According to the Consensus Estimate for sales tax revenue, the current projection for Constitutional revenue sharing is a 0.7% decline in FY 2015-16 relative to FY 2014-15.  Because these payments track with actual sales tax collections, the impact on forthcoming Constitutional payment from Treasury will adjust according to the revenue received.

For FY 2016-17, the Consensus projection is for a 1.7% increase relative to FY 2015-16, but that number will be revised at least two more times based upon the January 2017 and May 2017 revenue estimating conferences.

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

LaMacchia: Infrastructure Issues in Flint Symptom of Larger Problem

The League's John LaMacchia (center, right) and fellow panelists.

The League’s John LaMacchia (center, right) and fellow panelists.

What’s happening in Flint, Detroit and other cities is a symptom of a larger problem. A problem where cities in Michigan are only allowed to fall with the economy but not to prosper as the economy grows. And it’s only going to get worse if we don’t change the way the nation invests in communities.

This was a key message by the Michigan Municipal League’s John LaMacchia when speaking Thursday in Washington D.C. as part of Infrastructure Week 2016. The Infrastructure Week celebration organized by the National League of Cities and its partners is to raise awareness about the nation’s infrastructure needs. Cities construct and maintain the majority of our nation’s infrastructure and depend on a solid infrastructure network to provide safe and healthy communities, and grow their local economies.

The League's John LaMacchia is in Washington D.C. this week for the National League of Cities Infrastructure Week celebration. As part of his work, LaMacchia (center left) met with U.S. Rep. Dan Kildee (right).

The League’s John LaMacchia is in Washington D.C. this week for the National League of Cities Infrastructure Week celebration. As part of his work, LaMacchia (center left) met with U.S. Rep. Dan Kildee (right).

LaMacchia, assistant director of state affairs for the League, spoke as part of a panel discussion on “Securing Our Water Future: 21st Century Solutions for 21st Century Cities”. Other panelists were Council Member Matt Zone, City of Cleveland, Ohio, and National League of Cities 1st Vice President; Council Member Ron Nirenberg, City of San Antonio, Texas, and Chair, National League of Cities Energy and Environment Committee; Commissioner Heather Repenning, President Pro Tempore, Los Angeles Board of Public Works; Tyrone Jue, Senior Advisor on Environment to Mayor Ed Lee, City of San Francisco, California; Jonathan Trutt, Executive Director, West Coast Infrastructure Exchange; and Clarence E. Anthony, CEO and Executive Director, National League of Cities.

LaMacchia discussed the Flint water crisis and explained how the Flint issue is part of a much larger infrastructure problem in communities statewide.

Some of his key points included:

  • Flint Mayor Karen Weaver and Gov. Rick Snyder agree Flint’s lead-tainted service lines need to be removed. But it will take at least $55 million to replace all the lead-tainted lines. Money for water infrastructure has been put into appropriations bills in the Michigan Legislature and U.S. Congress, but the bills are still making their way through those legislative bodies.
  • The service lines are just part of the problem. The rest of Flint’s water system, from aging water mains to other infrastructure, needs to be totally replaced. The city’s water system loses a large percentage of the water to leaks, one reason Flint has some of the highest water rates in the country. Again, the City of Flint will need help from the state and federal governments to modernize its water infrastructure, a process that is expected to cost of hundreds of millions of dollars.
  • When we look at Michigan as a whole we have neglected to properly invest, maintain and right size our infrastructure.
    The league's John LaMacchia speaks on a panel during Infrastructure Week in Washington D.C. May 19, 2016.

    The League’s John LaMacchia speaks on a panel during Infrastructure Week in Washington D.C. May 19, 2016.

  • For nearly 30 years Michigan has been about 10 million people yet we have increased the amount of infrastructure in the state by roughly 50% and giving little thought to how we would maintain both the old and new infrastructure.
  • Time and time again we have built new water and sewer plants without capitalizing on the existing capacity of a nearby system.
  • This not only speaks to how we have been inefficient in managing infrastructure in Michigan but also how we have disinvested in our communities in general.
  • Why cities are important: Our goal at the Michigan Municipal League is to make Michigan communities places people want to be. Places that can attract a talented work force and businesses. Having placemaking strategies in all communities is important. But it’s hard to even think about creating great places when you’re fighting every day not to drown. How can you attract businesses and a work force if your roads are crumbling, bridges are in disrepair and you’re communities have slashed the number of police officers, firefighters, public works employees and more?
  • The numbers show that some states – particularly Michigan – do not understand the importance of cities as economic drivers. If they did they would be investing in cities. But unfortunately they are disinvesting in cities.
  • According to U.S. Census data all but one state showed growth in municipal general revenue between 2002 and 2012. View chart here.
  • Many want to blame this on a single state recession but the numbers tell a different story.
  • Why is this the case in Michigan – property values decrease in 2008 crash and the Michigan Constitution limits their ability to recover, PLUS revenue sharing to the tune of $7.5 billion over the last decade plus.

LaMacchia concluded explaining Michigan’s system for funding municipalities is fundamentally broken and unless it gets fixed we’re going to see more situations like what’s happening in Flint and Detroit occur in other communities.

Also earlier this week, NLC released a new report called, Paying for Local Infrastructure in a New Era of Federalism. Read a blog about the report by the League’s Summer Minnick.

Matt Bach is director of media relations for the Michigan Municipal League. He can be reached at mbach@mml.org and 734-669-6317.

Committee Approves Dark Store Fix – Contact Your Legislator!

Underutilized Mall in Wyoming (2) dark storesThe House Tax Policy committee today reported House Bill 5578 with a bi-partisan 11-2 vote.  Following multiple committee hearings spanning the past six months, today’s positive committee vote had been anticipated, based upon the amount of work done by the sponsor and local government advocates.

As the committee vice-chair, Rep. Dave Maturen was able to draw upon his extensive appraisal background to educate the members of the committee on the dark store problem and develop the language in the proposal, in conjunction with help from the League and numerous local government organizations and officials.

The language in HB 5578 provides very simple guidance to the Michigan Tax Tribunal that aligns directly with the existing, accepted methods of valuation that all assessors are trained to follow. This proactive acknowledgement of the three standard methods of valuation, coupled with language that restricts the Tribunal from accepting self-imposed deed restrictions as a true sales comparison are designed to restore balance to the decisions of the Tribunal and ensure that these decisions are based on the best data available.

We need your help to ensure that this bill will be voted on by the full House! The Michigan Chamber of Commerce and the Michigan Retailers Association are aggressively opposing this bill and contacting Representatives and Senators in an attempt to block further action on the bill. They claim that the only problem is uneducated local assessors who are over-assessing these large retailers.

Their direct message to legislators is; “Local governments are trying to legitimize their over-assessments and lack of persuasive evidence before the MTT by making scapegoats out of job providers who have successfully challenged their over-assessments and the MTT.”  Your involvement and personal contact with your Representative and Senator are the only way to counteract these attacks and ensure that this critical legislation moves before the Legislature recesses for the summer.  Please contact your State Representative and Senator today to urge their support for HB 5578!

For further information about the bill and the previous committee testimony, please review these Inside 208 articles – “New Dark Stores Solution…”  and “Michigan Municipal League Members Testify…“.  Or visit the League’s Dark Stores Information Page.

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

 

Local Infrastructure Report Released by National League of Cities

The National League of Cities released a new report Paying for Local Infrastructure in a New Era of Federalism. Declining funding, increasing mandates and misaligned priorities at the federal and states levels have put responsibility for infrastructure on local governments. But what ability do cities have to take up this call? The authority of cities to meaningfully address growing infrastructure challenges is bound by levers authorized to them by their states. The report finds that cities are limited in the number and scope of tools they are authorized to use, and that access to these tools is highly uneven in states across the country.

Summer Minnick is the Director of External Relations and Federal Affairs. She can be reached at 517-908-0301 or sminnick@mml.org.

League’s John LaMacchia in Washington D.C. Talking Infrastructure

The League's John LaMacchia.

The League’s John LaMacchia.

The Michigan Municipal League’s John LaMacchia will be in Washington D.C. Thursday to participate in Infrastructure Week 2016. The celebration organized by the National League of Cities and its partners is to raise awareness about the nation’s infrastructure needs. Cities construct and maintain the majority of our nation’s infrastructure and depend on a solid infrastructure network to provide safe and healthy communities, and grow their local economies.

LaMacchia, assistant director of state affairs for the League, will speak 2:30-4 p.m. Thursday, May 19, as part of a panel discussion on “Securing Our Water Future: 21st Century Solutions for 21st Century Cities”. The panel discussion will be live-streamed on the NLC’s Facebook page.

Other panelists are Council Member Matt Zone, City of Cleveland, Ohio, and National League of Cities 1st Vice President; Council Member Ron Nirenberg, City of San Antonio, Texas, and Chair, National League of Cities Energy and Environment Committee; Commissioner Heather Repenning, President Pro Tempore, Los Angeles Board of Public Works; Tyrone Jue, Senior Advisor on Environment to Mayor Ed Lee, City of San Francisco, California; Jonathan Trutt, Executive Director, West Coast Infrastructure Exchange; and Clarence E. Anthony, CEO and Executive Director, National League of Cities.

LaMacchia will discuss the Flint water crisis but he’ll explain how the Flint issue is part of a much larger infrastructure problem in communities statewide.

Also earlier this week, NLC released a new report called, Paying for Local Infrastructure in a New Era of Federalism. Declining funding, increasing mandates and misaligned priorities at the federal and states levels have put responsibility for infrastructure on local governments. But what ability do cities have to take up this call? The authority of cities to meaningfully address growing infrastructure challenges is bound by levers authorized to them by their states. The study finds that cities are limited in the number and scope of tools they are authorized to use, and that access to these tools is highly uneven in states across the country. Read a blog about the report by the League’s Summer Minnick.

View the report here: http://www.nlc.org/find-city-solutions/city-solutions-and-applied-research/infrastructure/local-infrastructure-funding-report

View the full infrastructure week schedule here: http://www.nlc.org/influence-federal-policy/infrastructure-week-2016

Matt Bach is director of media relations for the Michigan Municipal League. He can be reached at mbach@mml.org.