PPT Reimbursement and Budget Preparation Guidance from Michigan Department of Treasury

The Michigan Department of Treasury has asked us to share some information detailing changes to the Personal Property Tax local government reimbursements for 2016-17 budget preparation. Treasury has prepared a document below and requested the Michigan Municipal League pass it along to our members. If you have any questions, there is contact information at the end.

Here is the information from Treasury:

In 2012, legislation was passed providing new personal property tax exemptions for small taxpayers (starting in 2014) and eligible manufacturing personal property (EMPP, phase-in starting in 2016).  The Local Community Stabilization Authority (LCSA) Act, 2014 PA 86, requires reimbursement for the loss from the personal property exemptions.  The payments are made using the Authority’s share of the 6% use tax.

How the Loss in Taxable Value is Measured.  Beginning for 2016, the personal property exemption loss is calculated by subtracting each local unit’s current year taxable value of all industrial and commercial personal property from its 2013 taxable value of industrial and commercial personal property.  Calculations include IFT property, with IFT new facility TV reported at 50%.  Calculations exclude property classified as either industrial or commercial personal in one year but classified as either real property or utility personal in the other year.  County equalization directors will report the personal property exemption loss amounts to Treasury.

Millage Rates Being Reimbursed.  All types of millage are being reimbursed.  Except for local school district/ISD debt millage, reimbursements are calculated using each taxing unit’s sum of the lowest rate of each individual millage levied between 2012 and the immediately preceding year.  Treasury posts these rates on the Internet by May 1 of each year.  School districts/ISDs must report their current-year debt millage to Treasury by August 15.

Calculation of Reimbursements.  The personal property exemption loss is multiplied by the millage rates being reimbursed.  It is estimated there will be 100% reimbursement for all losses.  While all millages are being reimbursed, the reimbursements for certain losses and millage are calculated separately.  The following losses/millages are guaranteed 100% reimbursement:

  • Local school district and ISD millages;
  • Millage used to fund essential services, i.e. police, fire, ambulance and jails, including the loss from expiring tax exemptions that is reported on Form 5403 by the assessor;
  • Tax increment financing loss, including, for certain TIF plans, any loss from increased captured value; and
  • 2015 small taxpayer exemption loss.

Reimbursement for other millages may be at less than 100% or more than 100%, depending on the total calculated losses for those millages and the $ available for reimbursement.  We estimate the LCSA will have sufficient $ to reimburse all losses at 100%.

Beginning for 2019, 5% of the $ available for reimbursement under the previous paragraph will be distributed based on each taxing unit’s share of EMPP tax loss calculated using a modified acquisition cost of exempt EMPP.  That 5% is increased by 5% each year for 20 years, until no $ are distributed under the previous paragraph.

Taxing units will not have to claim reimbursement, except for tax increment financing plans, which will file Form 5176.  Reimbursements for most millage will be calculated using millage rates already available to Treasury.  Most local school districts receive reimbursement for their basic operating mills through operation of the state school aid formula.

Timing of reimbursements.  Reimbursement for county allocated millage will be paid on September 20th.  Reimbursement for other county millage, township millage, and other millage levied 100% in December will be paid the following February 20.  All other millage reimbursements will be paid on October 20th.

Fiscal Year 2016-2017 budget preparation.  In estimating FY 17 revenues, for the millage rates being reimbursed, local units should assume that their FY 17 property tax revenues from industrial/commercial personal property, including LCSA reimbursement, will equal their FY 14 property tax revenue from industrial/commercial personal property.  Millage increases after 2012 will not be reimbursed.

Total Amount of Reimbursements.  Reimbursements will total $374 million for calendar year 2016 losses, increasing to over $500 million for calendar year 2021 losses, as the EMPP exemption phases in.

For additional personal property tax reimbursement information, please email TreasORTA@michigan.gov, or call 517-373-2697.

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

Michigan Road Preservation Association Annual City County Workshop

Michigan Road Preservation Association Annual City County Workshop will be held on April 7, 2016 in Lansing. The workshop will explore the best practice of pavement preservation. Attendees will learn:

• Best treatments to use at each point along the pavement deterioration curve
• Technical advantages and specifications for specific treatments
• Find answers from peers and industry leaders that can help guide local agency preventive maintenance decision making.

For more information about the workshop please click on the following link. MRPA Annual Workshop 2016

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.

Transportation Asset Management Council Spring Conference

The Michigan Transportation Asset Management Council has finalized the spring conference program for Wednesday, April 13 at the Dearborn/Detroit Hilton DoubleTree Hotel and Conference Center. The agenda and hotel reservation information can be found at the following link. 2016 Spring Asset Management Program Agenda

The TAMC Conference Committee put together a broad spectrum of topics this year and we are very excited for the event.  The goal was to provide value across a diverse audience and discuss emerging issues such as the new Federal Performance Management regulations, new technologies in pavement maintenance,  incorporating other corridor utility information in Transportation Asset Management planning, and learning Asset Management strategies from our neighbors to the North.  The conference will also include updates from Director Kirk Steudle, the MDOT Metro Region, TAMC activities and reporting of 2015 bridge and pavement conditions.

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.

 

MDOT seeks applications for 2017 High Risk Rural Road program.

The Michigan Department of Transportation (MDOT) is pleased to announce the solicitation of applications for the fiscal year (FY) 2017 High Risk Rural Road (HRRR) program. The FY 2017 federal budget for this program is estimated to be $2,000,000.

A HRRR is defined as: 1) any roadway functionally classified as rural major or minor collector or a rural local road that the crash rate for fatalities and incapacitating injuries exceeds the statewide average for those functional classes of roadway, or 2) any roadway functionally classified as rural major or minor collector or a rural local road that will likely have increases in traffic volumes that are likely to create a crash rate for fatalities and incapacitating injuries that exceeds the statewide average for those functional classes of roadway.

For more information on the High Risk Rural Road program please click here. For the electronic submittal form click here.

If you have any questions, please feel free to contact Pamela Blazo at (517) 335-2224 or at blazop@michigan.gov.

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.

Michigan Investment in Municipalities Worst in Nation – By Far, Census Data Shows

The League's Anthony Minghine discusses revenue sharing during the news conference Monday afternoon.

The League’s Anthony Minghine discusses revenue sharing during the news conference Monday afternoon.

How bad is the municipal finance situation in Michigan? It’s the worse in the nation over the last decade, according to new data unveiled at a Michigan Municipal League news conference Monday, March 21.

And the culprit? State policies and politicians who have ignored the needs of cities, in the process damaging the state’s overall economy.

U.S. Census data shows Michigan is the ONLY state in the nation where municipal revenues overall declined from 2002-12 (the most recent information available).

Across the state, municipal revenues were down by 8.63 percent over that period, led by a 56 percent reduction in state revenue sharing.

Meanwhile, overall state revenues increased 39 percent. The numbers show that the state balanced its budget on the backs of cities.

The successful news conference was covered by multiple news outlets and also was live-streamed.

savemicity-large-websticker-72dpiView articles by the Detroit News, Gongwer, the Associated Press, Crain’s Detroit Business, the Detroit Free Press, MIRS News Service and WDET radio. The Free Press report is a column by Nancy Kaffer and does a particularly good job explaining the plight of cities.

You can see all the details at SaveMICity.org, a new web site the Michigan Municipal League has set up to provide information about the severity of the municipal finance problem facing Michigan, and offer solutions over time.

The website also has a new data base showing the revenue sharing dollar amounts diverted from every community in the state from 2002 to 2015.

More than $7.5 billion has been diverted statewide in that time period. Look up your community’s information here.

One of the many charts showing how Michigan has disinvested in its cities more than any other state in the state. That tiny red line you see is Michigan.

One of the many charts showing how Michigan has disinvested in its cities more than any other state in the state. That tiny red line you see is Michigan.

“Our cities are facing desperate conditions,” said League CEO and Executive Director Dan Gilmartin.

And he pointed to “fundamentally flawed” state policies providing for municipal finance, including massive cuts in revenue sharing since 2002, limits on assessment increases, but none on decreases, and other punitive state policy decisions.

Across America, the statewide average increase in municipal revenues was more than 40 percent.

The state with the next worse municipal finance revenue growth was Ohio, and there revenue grew by 25.7 percent. Around the nation, the average increase was more than 40 percent.

League Associate Executive Director and COO Tony Minghine has been leading a task force of League members and staff in examining the situation and brainstorming solutions. Minghine explained at the news conference that state policies have led to “strategic disinvestment” by cities, as they struggle to balance budgets in the face of declining revenues. He asked rhetorically whether Flint might have been able to avoid its man-made water contamination catastrophe if it had received the $63 million in revenue sharing withheld by the state since 2002 as a part of state budget balancing.

Minghine said more revenue is just one part of the League’s plan to be laid out in coming months, to try to address the pressing situation. He said cities will ask for legislative approval to address cost issues and look at the structure of local services in ways that are today prohibited by state law.

Another chart showing how Michigan has disinvested in its cities more than any other state in the state.

Another chart showing how Michigan has disinvested in its cities more than any other state in the state.

Wayne Mayor Susan Rowe showed how the situation is facing her city, which has seen revenue sharing cut by a cumulative $7.8 million since 2002 and has lost millions more in tax base due to decisions made at the state level regarding assessment practices. Wayne has laid off half its police force and still will run out of money in 2017. “We need the state to keep its promises to cities,” she said.

Mitch Bean of the Michigan Economic Consulting Group minced no words in putting the current plight of many cities on state policies. He pointed out that the combination of the Headlee Amendment to the state constitution and Proposal A allow assessments to drop during hard times, but limit their growth during good times. As a result, even a relatively well-off community like Farmington Hills, which saw assessments drop 30 percent from 2008 to 2012, will likely not see its tax base return to 2008 levels until 2025.

Why should state policymakers care about what they are doing to cities? Shanna Draheim of Public Sector Consultants, which has prepared a new report “Creating 21st Century Communities, Making the Economic Case for Place” said the result of these state decisions is that Michigan cities are lagging successful communities in attracting new talent. And that means the state is lagging in that vital category. You can see it in state personal income data, where Michigan has gone from a top 15 state to a bottom 15 state in per capita income since 2000.

Speakers during Monday's Michigan Municipal League press conference in Lansing. From left, Mitch Bean, Wayne Mayor Susan Rowe, Eric Lupher, Anthony Minghine and Dan Gilmartin.

Speakers during Monday’s Michigan Municipal League press conference in Lansing. From left, Mitch Bean, Wayne Mayor Susan Rowe, Eric Lupher, Anthony Minghine and Dan Gilmartin.

“States that have invested in cities are doing the best. They are growing economically. Michigan has the opportunity to do the same,” said Draheim.

But not unless we make some major changes to the state’s municipal finance policies, in a way that will let cities create the safe, walkable, fun locations that people want to move to. Until that happens, all of Michigan will suffer as the state’s economy sputters and fails to provide the public goods and economic opportunities that benefit all of us, whether we live in a big city, or rural township.

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

Libraries Push for Tax Capture Opt-Out

The Michigan Senate voted overwhelmingly today to send a seven-bill package over to the House that would allow separate millages for library purposes to opt-out of tax capture situations.  Senate Bills 579 and 619-624 moved out of the Senate this morning despite strong opposition from local government groups, including the League.

A separate discussion has been underway in the House for the past year, that would look at TIF and DDA reform from a much broader perspective.  At the same time, the Snyder Administration has initiated a workgroup process on this issue.  The League and many individual League member communities have been invited to participate on those workgroups that have bee set up to examine this topic at a holistic level.  A different group of Senators have expressed an interest in talking about TIF/DDA reform along those broader lines, as well.  Any reform proposals in this area need to be viewed comprehensively and not approached in a piecemeal fashion and we will continue to advocate from that standpoint, looking to preserve these important local economic development tools.

These Senate bills are scheduled to be referred to the House Tax Policy committee where the League will be working to oppose them.  Please contact your State Representative and let them know that this is a complex, important issue for all local governments and that TIF districts are a critical tool for local economic development that should not be dismantled.

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

Tuesday’s Election Fills House Vacancies

In addition to the Presidential Primary on Tuesday, three Michigan House districts held special general elections to fill vacancies.  The three districts that held special elections were the 75th in the city of Grand Rapids, the 80th in Allegan County and the 82nd district in Lapeer County.  With these seats filled, only one vacancy remains in the 110 member House of Representatives following the resignation of Derek Miller (D-Warren).  Miller was appointed Macomb County Treasurer at the end of January.  The special election to fill the remainder of the current term in that now vacant 28th House District will take place later this year to coincide with the August primary and November general elections.

On Tuesday in Grand Rapids, democrat David LaGrand was elected as State Representative, taking over for former Rep. Brandon Dillion, who now works for the Michigan Democratic Party.  LaGrand won with over 77% of the vote.

In Allegan County, republican Mary Whiteford was elected as State Representative, taking over for former Rep. Cindy Gamrat.  Whiteford was elected with nearly 64% of the vote.

In Lapeer County, republican Gary Howell was elected as State Representative, taking over for former Rep. Todd Courser.  Howell won with just under 59% of the vote.

LaGrand, Whiteford and Howell will serve out the remainder of the current term, through the end of 2016, and are expected to run for re-election in the fall.

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

League’s Dan Gilmartin Talks Flint Water Crisis, Infrastructure Issues at Congressional Briefing

Michigan Municipal League CEO and Executive Director Dan Gilmartin participates in a Congressional Briefing on the Flint Water Crisis and infrastructure issues in Washington D.C. Wednesday.

Michigan Municipal League CEO and Executive Director Dan Gilmartin participates in a Congressional Briefing on the Flint Water Crisis and infrastructure issues in Washington D.C. Wednesday.

WASHINGTON, D.C. – Michigan Municipal League CEO and Executive Director Dan Gilmartin and fellow municipal leaders from across the nation called for a partnership between cities, states and the federal government to improve the country’s ailing infrastructure.

Gilmartin participated in a panel discussion at the Congressional Capitol Briefing earlier today (March 9, 2016) in Washington D.C. Gilmartin and the panel discussed national infrastructure issues and the Flint water crisis. Other scheduled panelists were Mayor Mark Stodola, of Little Rock, Arkansas; Councilmember Greg Evans, of Eugene Oregon; and Councilmember Andy Huckaba, of Lenexa, Kansas.

The panel also discussed whether federal policies are keeping pace with local efforts to reevaluate and reconfigure infrastructure for the next generation. More than 200 members of Congress and congressional staff attended the event at the Capitol Visitors Center Auditorium. The briefing is part of the National League of Cities annual Congressional City Conference concluding today.

In response to the Flint water crisis, the NLC on Tuesday announced a resolution that declared that the nation’s cities stand united in support of Flint. The resolution also included a call to Congress and the Administration to resolve the Flint Water Crisis. View the resolution here.

Here is an excerpt of the press statement about the resolution:

NLC is also calling on Congress and the administration to support robust funding for all water infrastructure mechanisms, including the Clean Water and Drinking Water State Revolving Loan Fund programs and the Water Infrastructure Finance and Innovation Act.

“The true tragedy is that the families-and children-impacted by the lead contamination in Flint will endure long-term education and mental health impacts,” said National League of Cities President Melodee Colbert-Kean, councilmember, Joplin, Mo.”The federal government must make a long-term commitment to help these families with the challenges that lie ahead.”

“The Flint drinking water crisis is unconscionable and unacceptable. Cites stand in solidarity with Flint, and the National League of Cities stands united with all American cities in the need to update our nation’s deteriorating water infrastructure,” saidNational League of Cities CEO and Executive Director Clarence E. Anthony. “We must invest in the infrastructure our communities depend on. We need the federal government to step up, and work with cities to make sure there will never again be another disaster like in Flint.”

“The tragic events in Flint are a wake-up call for the nation. Policies that ignore critical infrastructure needs result in a shameful disinvestment in our cities, leading to problems like we are experiencing in Flint,” said Dan Gilmartin, executive director and CEO of the Michigan Municipal League. “The Michigan state government has shorted communities $7 billion in revenue since 2000. The Flint crisis is the latest result of this ruinous policy.”

Access to clean drinking water is fundamental for the health and well-being of America’s communities and families. Lead-contaminated drinking water can have permanent and long-term effects on mental health, IQ and development, particularly in infants and children.

There is an urgent need to invest in our aging water infrastructure nationwide. The EPA estimates the U.S. water infrastructure capital needs to be approximately $720 billion over the next 20 years.

View the full press release about the resolution here.

NLC is the nation’s largest and most representative membership and advocacy organization for city officials, comprised of more than 19,000 cities, towns, and villages representing more than 218 million Americans.

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

Michigan Leaders Outline Three Local Government Priorities for U.S. Congress

U.S. Senator Debbie Stabenow, D-Michigan, speaks to Michigan Municipal League members in Washington D.C. during the NLC Congressional City Conference Tuesday, March 8, 2016.

U.S. Senator Debbie Stabenow, D-Michigan, speaks to Michigan Municipal League members in Washington D.C. during the NLC Congressional City Conference Tuesday, March 8, 2016.

A contingent of Michigan local government leaders were in Washington D.C. today to meet with U.S. Senators Debbie Stabenow and Gary Peters on legislative priorities for local communities. The three priorities requested were in the areas of municipal bond tax exemptions; marketplace fairness and online sales tax parity; and transportation funding among other issues.

The Michigan contingent in Washington D.C. this week for the National League of Cities Congressional Cities Conference 2016 was led by League President and Dearborn Mayor Jack O’Reilly; and League Vice President and Grand Rapids Mayor Rosalynn Bliss. Also attending were about 30 Michigan local government leaders, including Lansing Mayor Virg Bernero, Fenton Mayor Pro Tem and NLC Board Member Pat Lockwood; League CEO and Executive Director Dan Gilmartin and Summer Minnick, the League’s director of external relations and federal affairs.

The group has been meeting with various Congressional offices in the Capitol during their visit.

U.S. Senator Gary Peters meets with members of the Michigan Municipal League in Washington D.C. Tuesday, March 8, 2016.

U.S. Senator Gary Peters meets with members of the Michigan Municipal League in Washington D.C. Tuesday, March 8, 2016.

Here are details on the three priorities presented:

  1. Continuing to have municipal bonds be tax exempt. The tax exempt status of municipal bonds is critical to investment in infrastructure and provides tremendous economic growth in our communities. Eliminating that exemption would harm the future development of critical infrastructure projects and the jobs that come with them. The group encourages the Michigan Congressional Delegation to reject any attempt to eliminate or limit the traditional tax exemption for municipal bonds.
  2. Support marketplace fairness and online sales tax parity. Last Congressional session, the Senate passed the Marketplace Fairness Act with a vote of 69-27 in a bipartisan manner. This would have allowed state and local governments to collect an estimated $23 billion in online sales taxes, thus ending the online sales tax ‘break.’ However, to great disappointment, the House failed to act before session ended and we are starting over with new legislation this session. Gary Peters and Rosalynn Bliss edited-smallWhile exact estimates vary, Michigan stands to collect hundreds of millions of dollars from purchases that are avoiding the tax today. This session the bill, S. 698, is sponsored by Senator Enzi (R-WY) and has 22 co-sponsors. Within the past few weeks, Congress passed a bill to, among other things, prevent state and local governments from taxing internet access. As part of getting support needed for that bill, we understand that Senate leaders agreed to have a floor debate on the Marketplace Fairness bill later this year. By failing to pass legislation to bring tax equity in the retail industry, we are punishing those who have invested in our communities. Main Street retailers currently operate at a 5-10 percent disadvantage because they are required to collect sales taxes while remote sellers are not. And, we are leaving billions of dollars on the table which could be used to help invest in other areas for economic growth and/or reduce the deficit. Marketplace Fairness simply allows states and local governments to enforce existing sales tax laws. It does not create new taxes or increase existing ones. The Michigan contingent encourages passage of S. 698 for the benefit of our state and local economies.
    League President and Dearborn Mayor Jack O'Reilly and the League's Summer Minnick meet with U.S. Sen. Gary Peters.

    League President and Dearborn Mayor Jack O’Reilly and the League’s Summer Minnick meet with U.S. Sen. Gary Peters.

  3. Increase funding for transit and multi-modal transportation. Last year, Congress passed and President Obama signed the FAST (Fixing America’s Surface Transportation) Act, making the first long-term transportation bill in a decade official. There are some wins for local governments within the new law, which is worth approximately $305 billion. However, while there are many positives with the FAST Act, there are still investment needs in our transportation infrastructure. Our nation must continue to make greater investments in transit and multi-modal transportation in order to be competitive worldwide. The Michigan contingent hopes that in having a conversation about increased investment in transportation that we can focus more on all users of transportation networks and not primarily on vehicle users. While the FAST Act was extremely helpful to local communities by providing some stability in transportation funding, the Michigan leaders request Congress for a long-term mechanism for increased funding must still be debated. Additionally, increasing funds for transit and multi-modal transportation is critical to the future prosperity of our communities.

Posted by Matt Bach, the League’s director of media relations, on behalf of Summer Minnick League’s director of external relations and federal affairs. Summer can be reached at sminnick@mml.org.

League CEO Dan Gilmartin to Speak at Congressional Briefing on Flint Water Crisis

Dan Gilmartin is interviewed during the NLC Congressional City Conference in Washington D.C. this week.

Dan Gilmartin is interviewed during the NLC Congressional City Conference in Washington D.C. this week.

WASHINGTON, D.C. – Michigan Municipal League CEO and Executive Director Dan Gilmartin will participate in a Congressional Capitol Briefing Wednesday in Washington D.C. and talk about national infrastructure issues and the Flint water crisis.

Gilmartin will be part of a panel that will inform members of Congress about the most pressing infrastructure issues facing cities today. They also will delve into whether federal policies are keeping pace with local efforts to reevaluate and reconfigure infrastructure for the next generation. More than 200 members of Congress and congressional staff are expected to attend the event taking place 10 a.m. Wednesday, March 9, 2016, at the Capitol Visitors Center Auditorium. The briefing is part of the National League of Cities annual Congressional City Conference happening this week.

Through his work with communities, Gilmartin is recognized as a national leader in the fields of urban revitalization, placemaking, local government reform, and transportation policy.  Model D Media has referred to him as “an urban thinker with an eye for the small, oft-unnoticed changes that can make ‘places’ out of streets and buildings.”  Dan serves as a member of the Michigan Future, Inc. Leadership Council and on the Placemaking Leadership Council.

Joining Gilmartin on the panel will be other local experts who will discuss the water crisis in Flint and what it means for federal-state-local relations nation-wide; contrasting state and local perspectives on accountability in the transit funding process; competing public and private interests in the broadband market; and differing federal and local points of view on infrastructure finance.

Other speakers include Mayor Mark Stodola, of Little Rock, Arkansas; Councilmember Greg Evans, of Eugene Oregon; and Councilmember Andy Huckaba, of Lenexa, Kansas.

NLC is the nation’s largest and most representative membership and advocacy organization for city officials, comprised of more than 19,000 cities, towns, and villages representing more than 218 million Americans.

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