Revenue Sharing Budgets Positioned for Initial Action; Senate Cuts Statutory by 1.5%

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. A 2016-17 Senate budget plan would cut statutory revenue sharing to communities even more. Learn more at SaveMiCity.org

The Michigan House and Senate Appropriations committees made their opening moves on the state budget this week by reporting the full budget bills to the floors of their respective chambers. Following expected floor action on these bills in the coming week or two, each chamber will review the other’s proposal and move toward a final budget deal sometime in early June.

Both proposals continue the current practice of ignoring the fiscal needs of local government, failing to make revenue sharing and the larger issue of municipal finance a budget priority. Without a renewed focus and commitment by the Governor and Legislature, Michigan will continue to occupy last place nationally in our treatment of local government. Learn about the League’s municipal finance initiative at SaveMiCity.org. View how much money your community has lost in revenue sharing here.

The House committee reported an omnibus budget bill, House Bill 5294, to the floor which includes funding for revenue sharing. The House proposal maintains current-year funding for revenue sharing, only deviating from the Governor’s original recommendation by maintaining the $5.8 million that the Governor would have removed for approximately 100 townships that hadn’t received revenue sharing previously.

The Senate committee, on the other hand, moved Senate Bill 788 to the Senate floor with significant changes to the Governor’s proposal for revenue sharing. Statutory revenue sharing would see a 1.5% reduction ($3.85 million) in the Senate version, with the dollars from that reduction being shifted to cover a proposed local match requirement for the purchase of new voting equipment. The League urges you to contact your Senator, asking them to join us in opposition to this approach.

In the Governor’s original budget proposal, the effort to replace existing voting equipment statewide was supported by $10 million in General Fund and $5 million in requested (unidentified) local match. These dollars would be coupled with remaining federal Help America Vote Act funds and dollars appropriated for this purpose in the current budget year. The purchase of new voting equipment has been championed by the County and Municipal Clerks Associations and the Secretary of State’s office, but the call for a local match requirement had not been voiced prior to this year’s budget.

The proposal to accommodate the Governor’s local match request in the Senate version raises serious concerns for the Michigan Municipal League and member communities, even beyond the further erosion of an already devastated statutory revenue sharing base.

  • All cities, villages, townships and counties would benefit from the purchase of new voting equipment, but the local match requirement would only be paid by those cities and villages and few townships that receive a statutory payment. ***Counties and townships that do not receive non-Constitutional revenue sharing payments would pay no local match.  
  • By paying the local match only out of the statutory revenue sharing line, there is no correlation to the actual match requirement for equipment being purchased within each community. In a sample comparing similarly sized communities, one with 19 voting precincts would forgo only about $1,500 in revenue sharing, while another community with only 12 polling places would lose more than $22,000 … and this does not account for the more than 1,000 local government units that would pay nothing in local match!
  • County statutory payments, already funded at 100%, would receive a 2% increase ($4.3 million) in this proposal. Again, without any requirement for a local match for voting equipment purchases by a county.
  • This match requirement would be deducted during the FY 16-17 budget year, yet voting equipment would not be received by any local government until at least 2017 and delivery would like be phased in over two to three years.

Comments have been made that under this proposal, every local unit will receive at least what they received during  the current budget year even with the 1.5% base reduction, but this statement assumes that there will be growth in sales tax revenue driving higher Constitutional revenue sharing payments. Early indications from the most recent Senate Fiscal Agency monthly revenue report reveal that it is unlikely that the state will even meet its already reduced sales tax estimate for the current year, let alone meet the overly optimistic 3.9% growth estimate for the coming year. It is more probable that Constitutional revenue sharing payments will be flat for a third year in a row, if not reduced at some point over the next year.

It is expected that the Senate’s revenue sharing plan will be voted on by the full chamber next week. Please remember to contact your Senator and urge them to begin restoring the cuts of the past decade and reform the way local governments are funded. They should start by rejecting the committee proposal.

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

New “Dark Store” Solution Focuses on Michigan Tax Tribunal Process

A big box "dark store" in southeast Michigan.

A big box “dark store” in southeast Michigan.

State Representative Dave Maturen (R-Vicksburg) introduced House Bill 5578 this week (http://legislature.mi.gov/doc.aspx?2016-HB-5578) with the support of the Michigan Municipal League and other local government groups, to address the ongoing crisis of “dark store” property tax appeals.

The legislation proposed by Rep. Maturen, was developed following a workgroup process which he chaired and involved participation by the League and numerous local assessors, appraisers and other property valuation experts. The proposal would require Michigan Tax Tribunal members to equitably apply universally accepted appraisal standards when deciding larger property tax appeal cases. These standards will provide consistency in determining highest and best use as part of the property valuation process. The legislation would also restrict the consideration of comparable sales that have deed restrictions if the deed restrictions are imposed by the seller to keep competitors of the seller from the  market and  the deed restrictions provide no benefit to the property but only to the seller’s business.

A hearing on the bill is scheduled for 10:30 a.m. Wednesday (April 27) before the House Tax Policy committee. League members are encouraged to contact the legislators on the Tax Policy committee at this link and your own Representative and Senator to explain the importance of this issue and to urge their support for HB 5578. Use the League’s Action Center to contact your lawmakers.

Visit the League’s information page on the Dark Stores issue here: http://www.mml.org/advocacy/dark-stores/

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

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 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.

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.

Michigan Local Government Leaders Discuss Flint Water Crisis with EPA in D.C.

Flint Vehicle City SignThe Flint water crisis was on top of mind for a group of Michigan local government leaders who had the opportunity to meet with U.S. Environmental Protection Agency (EPA) Administrator Gina McCarthy Monday afternoon (March 7, 2016) in Washington D.C.

A contingent of Michigan local government leaders met with the Administrator and Mark Rupp, EPA deputy associate administrator for intergovernmental relations, while in Washington D.C. this week for the National League of Cities Congressional Cities Conference 2016. The Michigan contingent was led by League President and Dearborn Mayor Jack O’Reilly; and League Vice President and Grand Rapids Mayor Rosalynn Bliss. Also attending the meeting were Carolyn Berndt, the NLC’s program director for sustainability and federal advocacy; Flint City Council President Kerry Nelson; Flint City Councilmember Jacqueline Poplar; League CEO and Executive Director Dan Gilmartin; Summer Minnick, the League’s director of external relations and federal affairs; and Chris Hackbarth, the League’s director of state affairs.

A birds-eye view from Flint's amazing Farmer's Market.

A birds-eye view from Flint’s amazing Farmer’s Market.

As most are well aware, Flint is in the international spotlight after elevated blood lead levels were discovered in some Flint children after its water source was switched to the Flint River. It had been purchasing Lake Huron water from the Detroit Water and Sewer System (DWSD). The decision to switch to the Flint River was made while the city was being run by a state-appointed emergency manager. At the time of the switch state regulators never required that the river water be treated to make it less corrosive, causing lead from plumbing and pipes to leach into the water supply. Even though the city reconnected to the DWSD in October, local and state officials continue to warn the public about the ongoing problem, are continuing to distribute bottled water and filters, and are encouraging pregnant women and young children against using the water unless it has been tested because lead levels in some cases continue to exceed what can be handled by the filters.

The Michigan Municipal League Board of Trustees is bringing together a group of technical experts, public works administrators, city managers and local elected officials to discuss response strategies in the wake of the Flint crisis. This task force will discuss the overall link between the current crisis in Flint and Michigan’s broken municipal finance system. They will also develop a response strategy for all of our members to utilize when a resident or the media has questions about the safety of drinking water in their community.

Downtown Flint during the 2013 Back to the Bricks event.

Downtown Flint during the 2013 Back to the Bricks event.

The League believes that the issues we have seen in Flint, Detroit and other cities is a symptom of a larger problem. This isn’t just about replacing the lead pipes in Flint and saying “all fixed.” Certainly there is an immediacy to that issue that needs to be addressed and solved. But even with new pipes there are much broader issues that needs to be addressed. We must fundamentally change the way government operates. We should allow local government to maximize their opportunities to invest in themselves, control costs, and provide services deserving of a 21 century community. Until we allow this flexibility Flint and many other cities in Michigan and across this country will be limited in their ability to provide the foundation for a strong, thriving, diverse community.

As part of the meeting with EPA and Michigan officials vowed to work together to assist Flint and ensure something like this never happens again.

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

Federal Judge O’Meara Plans to Issue Ruling on PA 269, ‘Important Case’ Soon

Dowagiac Mayor Donald Lyons explains why he is opposed to PA 269.

Dowagiac Mayor Donald Lyons speaks at a recent news conference opposed to PA 269. He is one of three League members listed as plaintiffs in a lawsuit.

ANN ARBOR, Mich. – Recognizing the urgency of the case, U.S. District Court Judge John Corbett O’Meara today said he would issue a written ruling soon regarding a lawsuit charging that a “gag order” provision in Public Act 269 is unconstitutional and asking that the law be overturned.

Judge O’Meara heard oral arguments from both sides Thursday morning. Jerome R. Watson spoke as one of the attorneys representing the plaintiffs – 17 local government officials and one private citizen. Defendants in the case are Secretary of State Ruth Johnson and the State of Michigan.

“The heart of this case is not about misusing public funds. This case is about abusing First Amendment rights. This case is all about censorship of speech,” said Watson, of the Miller Canfield law firm, during the hearing at the U.S. District Court, Federal Building in Ann Arbor.

Calling it an “important case,” Judge O’Meara said he hoped to issue a decision soon on the plaintiffs’ request for a preliminary injunction. The case is regarding Subsection 57(3) of Public Act 269, which amended Michigan’s Campaign Finance Act. State law already prohibits governmental officials from using tax dollars to advocate for or against a proposal. This new provision goes far beyond what is constitutionally permissible.

Specifically, subsection 57(3) bans local officials or employees of local governments and school districts from using public resources to communicate with voters by giving them factual information about a ballot measure through radio, television, mass mailing or prerecorded telephone messages within 60 days of the election.

There is urgency to this case because more than 100 school districts and local governments have issues on the March 8 ballot and already are being affected by the 60-day gag order time period.

The case is Robert Taylor et al v. Ruth Johnson and the State of Michigan. It was filed Jan. 26 in the U.S. District Court for the Eastern District of Michigan, based in Detroit.

Lawsuit plaintiffs include Michigan Municipal League members Roseville Mayor Robert Taylor, Algonac City Manager Douglas R. Alexander, and Dowagiac Mayor Donald Lyons. Other plaintiffs are Tuscola County Commissioner Matthew Bierlein; New Haven Community Schools Superintendent Todd R. Robinson; Riverview Community Schools School Board President Gary O’Brien and Superintendent Russell Pickell; Tecumseh School Board President Kimberly Amstutz-Wild and Superintendent Gary O’Brien; Waterford School District School Board President Robert Seeterlin and Superintendent Keith Wunderlich; Goodrich Area Schools Superintendent Michelle Imbrunone; Clinton Community Schools Superintendent David P. Pray; Byron Area Schools School Board President Amy Lawrence and Superintendent Patricia Murphy-Alderman; Warren Consolidated School District Superintendent Robert D. Livernois; Lansing School District Superintendent Yvonne Caamal Canul; and Stephen Purchase, a private citizen.

Matt Bach is director of media relations for the Michigan Municipal League. He can be reached at 810-874-1073.

U.S. Rep. Sandy Levin and Macomb County Area Officials Seek Repeal of ‘Gag Order’ in PA 269

Roseville Mayor Robert Taylor kicks off Thursday's news conference at the Roseville Fire Department.

Roseville Mayor Robert Taylor kicks off Thursday’s news conference at the Roseville Fire Department.

Numerous Michigan Municipal League members and mayors from the Macomb County area attended news conference in Roseville Thursday against the “gag order” provision in the newly enacted Public Act 269.

The highly successful, well-attended event at the Roseville Fire Department was organized and led by U.S. Rep. Sandy Levin, D-Royal Oak. More than 75 people attended and participants included current League board members Ed Klobucher, Hazel Park city manager, and Mark Vanderpool, Sterling Heights city manager, as well as past board member and Eastpointe Mayor Suzanne Pixley. Other communities represented included Roseville, Royal Oak, Ferndale, Center Line, Mount Clemens, Pleasant Ridge, Berkley, Huntington Woods, St. Clair Shores, Fraser, and Warren. View a list of other attendees here.

“Repeal the gag rule, there’s no other alternative. We don’t want a modification, we want repeal of that provision,” Levin stated at the start of the news conference. “Under the new law – passed under the cloak of darkness – within 60 days of an election, a school district or local government cannot tell people whether a millage question appearing on their ballot is a new tax or a renewal of a previous millage, or even tell residents what their tax dollars would be spent on should a millage be approved. The large gathering today of local leaders from various walks of life vowed to turn up the heat until this misguided provision is repealed.”

U.S. Rep. Sander Levin calls for a repeal of the gag order provision in PA 269.

U.S. Rep. Sander Levin calls for a repeal of the gag order provision in Michigan’s PA 269.

Many of the speakers were not just critical of PA 269 (formerly SB 571), but they were angry about it.

A provision in PA 269 places a gag order on ways local officials can communicate with their residents about local ballot questions within 60 days of an election. This gag order is currently in effect for those of with ballot items in the March 8 election and in all subsequent elections. There are more than 100 entities with ballot questions heading to voters March 8, including several in Macomb and Oakland counties.

Specifically, the law prohibits local governments from communicating with voters by giving them factual information about a ballot measure through radio, television, mass mailing or prerecorded telephone messages within 60 days of an election.

“I want this to be perfectly clear,” Klobucher said, “Public Act 269 is nothing less than an attack on the free speech rights of local officials in the state of Michigan to provide information to their constituents. I can’t say that strongly enough.”

Hazel Park City Manager Ed Klobucher speaks against Section 57 in PA 269.

Hazel Park City Manager Ed Klobucher speaks against Section 57 in PA 269.

Klobucher talked about the need to inform voters about a public safety funding consolidation effort involving the city of Hazel Park and the city of Eastpointe a year ago. Voters in both cities overwhelming approved in February of 2015 the creation of the public safety authority that included a 14-mill tax increase. The plan was essential in keeping the two communities financially afloat and out of potential emergency management, he said.

“I cannot believe that I’m standing here in 2016 in the State of Michigan and we are actually debating the issue in which the Michigan Legislature has curtailed our right to educate. Sorry I’m going to continue to open my mouth no matter what, come and arrest me. This is the United States of America and my voice will be heard and I hope all of your voices will be heard as well.”

Jessica Keyser, director of the Ferndale Public Library, spoke on behalf of her colleagues in Macomb and Oakland counties. Keyser, as quoted in the Macomb Daily, said the law violates the most-important responsibility of any librarian: to provide information to the public.

“If they want to throw us in jail, they’ll need to make more room in the cells,” she told the gathering.

Sterling Heights Mayor Michael Taylor addresses the crowd at Thursday's news event in Roseville.

Sterling Heights Mayor Michael Taylor addresses the crowd at Thursday’s news event in Roseville.

Sterling Heights Mayor Michael Taylor said there are already laws in place to prevent local governments from advocating on local ballot issues and a system .

“Last year, the Governor asked Mayors from across the state to share information with our residents about Proposal 1, which was a very complicated ballot measure,” Taylor said. “A few weeks ago, he signed a bill into law that would make me a criminal for doing what he asked me to do less than one year ago. This law needs to be repealed to allow us as public officials to give our residents unbiased, factual information about what we are placing on the ballot for their consideration.”

Macomb County Executive Mark Hackel was also very direct explaining he is “absolutely appalled that this legislature took away the basic Constitutional right of freedom of speech. … This needs to be repealed.”

The League and a coalition of organizations have supported bipartisan efforts to repeal the gag order provision in Section 57 of PA 269 and lift the limitations on local officials trying to give voters important, basic and factual information on local ballot issues.

Warren Mayor James Fouts speaks during the news conference.

Warren Mayor James Fouts speaks during the news conference.

View an article about the Thursday’s news conference by Detroit News reporter Christine Ferretti and another by the Macomb Daily’s Frank DeFrank. View a press release about the event from U.S. Rep. Levin’s office.

Please contact your lawmakers today and ask them to support bills that would repeal Section 57 of PA 269. Read the League’s issue summary, view sample resolutions from Michigan communities seeking repeal, and check out the joint statement calling for repeal, and Chris Hackbarth’s blog detailing League concerns. More.

Matt Bach is director of media relations for the Michigan Municipal League. He can be reached at (810) 874-1073 and mbach@mml.org.

League, other organizations to Governor Snyder: VETO SB 571

Dearborn Mayor and League President Jack O'Reilly discusses SB 571 during a news conference Tuesday, Jan. 5, 2016.

Dearborn Mayor and League President Jack O’Reilly discusses SB 571 during a news conference Tuesday, Jan. 5, 2016.

Governor Rick Snyder needs to veto a campaign finance bill sitting on his desk that would create more problems than it attempts to solve.

This was the basic message of a well-attended news conference Tuesday at the Michigan Municipal League’s Lansing office about SB 571. The event was covered by nearly a dozen members of the media, including radio, TV and print/online. Read articles about the news conference by: the Detroit News, mlive.com, WLNS TV, WILX TV, WOOD TVLansing State JournalDearborn Press & Guide, WSJM radio and subscription news services Gongwer and MIRS. The League’s call to veto this bill (read details about that here from the League’s Chris Hackbarth) seems to be gaining momentum.

Check out this Kalamazoo Gazette article that quotes some Republican lawmakers who are having second thoughts about approving SB 571. View this Detroit News editorial calling for a veto.

Rochester Hills Mayor Bryan Barnett discusses SB 571 during a press conference Tuesday,

Rochester Hills Mayor Bryan Barnett discusses SB 571 during a press conference Tuesday,

Senate Bill 571 passed the legislature on Dec. 16 with some extensive last-minute revisions. The bill expanded from 12 pages to 53 pages, but the very last change is the one we had the press conference about. Section 57 of the bill would prevent public entities from distributing information about a ballot proposal in the 60 days before an election.

“In other words, in the weeks before an election we cannot use a mailing or local cable outlets to inform our constituents if a measure will raise or lower their tax rate, who it will affect, if it will mean the community will be selling a piece of property and where it is, how a charter change will affect them or anything else,” said Dearborn Mayor Jack O’Reilly, president of the Michigan Municipal League.

The legislation would prohibit them from distributing public notices on television, radio and in print media explaining property tax proposals, school bond issues or changes in a local charter.

Orion Township Supervisor Chris Barnett discusses SB 571.

Orion Township Supervisor Chris Barnett discusses SB 571.

“Local officials wouldn’t even be able to tell voters in their newsletter who’s running for city council,” said League CEO and Executive Director Dan Gilmartin.

Chris Barnett, supervisor of Orion Township, said the legislation amounts to a “gag order” on election officials 60 days prior to an election.

“What (voters) expect me to do is answer questions and give them information,” Barnett said.

Republican Rochester Hills Mayor Bryan Barnett said perhaps this is a legislative effort to stop tax increases, but that’s not what’s going on in his community. Over the past four years the largely conservative community has considered seven ballot proposals, and only one was a tax increase.

To educate voters on these issues, which are often complicated, Rochester Hills government has turned to YouTube and public access television. But the line could get blurry.

“Can I respond to a resident asking a question about a millage proposal? It’s very concerning,” Barnett said.

A large amount of media attend a news conference Tuesday on SB 571 at the Michigan Municipal League's Lansing office.

A large amount of media attend a news conference Tuesday on SB 571 at the Michigan Municipal League’s Lansing office.

That concern was echoed by Democratic Dearborn Mayor John O’Reilly, who said “we’re going to end up having a lot of effort made trying to interpret where that line is.”

Governor Snyder has until Jan. 11 to decide whether to sign or veto the bill and already some Republican lawmakers who initially voted for it are saying it might be worth a second look. Read these articles from the Kalamazoo Gazette and Holland Sentinel that talk to lawmakers willing to revisit the bill.

The press conference was emceed by League CEO and Executive Director Dan Gilmartin and featured League Board President and Dearborn Mayor Jack O’Reilly, Rochester Hills Mayor Bryan Barnett and officials representing the Michigan Association of Counties, the Michigan Townships Association, Michigan Sheriffs Association, Middle Cities Education Association, Michigan Association of School Administrators, Michigan County Roads Association, Michigan Association of School Boards, Michigan Infrastructure and Transportation Association, and the League of Women Voters. View a joint press release about the issue.

League CEO and Executive Director Dan Gilmartin kicks off a news conference on SB 571.

League CEO and Executive Director Dan Gilmartin kicks off a news conference on SB 571.

We had nearly a dozen members of the media attend including two Lansing TV stations, Michigan Public Radio, Gongwer, MIRS, mlive, Lansing State Journal, Detroit News and Detroit Free Press.

The League along with numerous communities and organizations have sent letters to Governor Snyder asking him to veto the bill. Read the veto letters from: the League, Michigan Association of Counties, and the Michigan Townships Association.

You can register your opinion about this bill with Governor Snyder during regular business hours at (517) 335-7858. Or go to https://somgovweb.state.mi.us/GovRelations/ShareOpinion.aspx.

Excerpts from articles in mlive and Detroit News about the news conference were including in this blog post.

Matt Bach is Director of Media Relations for the Michigan Municipal League. He can be reached at mbach@mml.org and 810-874-1073.