This afternoon the Senate Finance Committee considered Senate Bills 754 and 755,  legislation that would accelerate the would amend the Use Tax Act and the General Sales Tax Act, respectively, to accelerate the schedule that excludes from taxation the value of a motor vehicle or recreational vehicle (RV) traded in for a new or used vehicle or RV; the bills would double the annual increase in the maximum dollar amount that may be excluded, and provide for no limit beginning in 2025, rather than 2039.

According to the non-partisan Senate Fiscal Agency, the bills would reduce State and local unit revenue through fiscal year (FY) 2037-38. In FY 2014-15, the bills would reduce State revenue by approximately $23.9 million, including a $19.5 million reduction to School Aid Fund revenue, a $1.2 million reduction in Comprehensive Transportation Fund revenue, and a $3.2 million reduction to General Fund revenue; and would lower local unit revenue by $2.7 million through reduced constitutional revenue sharing payments. Total State and local unit revenue losses would increase to $32.5 million in FY 2015-16 and $38.4 million in FY 2016-17. After FY 2024-25, the revenue losses relative to current law would begin declining, reaching zero in FY 2038-39.

Please contact your legislators and ask them to vote no this legislation that is harmful to local funding.

Samantha Harkins is the Director of State Affairs for the Michigan Municipal League.  She can be reached at 517-908-0306 or email at sharkins@mml.org

This morning the House Tax Policy Committee heard testimony on House Bills 5265, 5266 and 5267, bills that would reduce the state income tax. House Bills 5265-6 would reduce the income tax from 4.25 percent to 4.05 percent. House Bill 5267 would allow additional reductions of 0.1 percent if general fund revenue increased by $300 million or more in the preceding fiscal year.

The League opposes this legislation as we opposed similar legislation in the Senate several weeks ago. There need to be a comprehensive discussion about reinvesting in communities and infrastructure before passing income tax relief.

You can view the League’s letter of opposition here: Tax relief package letter to cmte 2_14

The committee did not vote on the legislation.

Samantha Harkins is the Director of State Affairs for the Michigan Municipal League.  She can be reached at 517-908-0306 or email at sharkins@mml.org

Earlier this week Suzanne Schulz, Director of Planning for the City of Grand Rapids, presented to the Senate Transportation Committee on complete streets.  The League worked several years ago to pass legislation for complete streets, and it is a vital part of our policy platform to creating vibrant communities.

We appreciate Suzanne’s continued education and advocacy regarding the importance of complete streets. You can view Suzanne’s presentation here: Senate Transportation Ctte 2-11-14

Samantha Harkins is the Director of State Affairs for the Michigan Municipal League.  She can be reached at 517-908-0306 or email at sharkins@mml.org

This week the House passed Senate Bill 396, a bill that would amend the General Property Tax Act to provide that, after December 31, 2011, if a property is destroyed due to an accident or natural disaster, the taxable value of the replacement property would be the same as the year of the incident and not subject the Proposal A annual adjustment of the lesser of the rate of inflation of 5 percent.

This would apply to reconstruction properties if the rebuild is done with substantially the same materials as the original, the square footage is not more than 5 percent larger than the original property and it is completed no later than the December 31 in the year that is 3 years after the incident.

The League is opposed to this legislation that will now head to the Governor for his signature.

Samantha Harkins is the Director of State Affairs for the Michigan Municipal League.  She can be reached at 517-908-0306 or email at sharkins@mml.org

Yesterday the Senate Local Government and Elections Committee heard testimony on House Bill 4624, a bill that would make a full-time firefighter’s ability to work as a firefighter in another community a prohibited subject of bargaining.The legislation is supported by the fire chiefs and the Michigan Townships Association.

The League is opposed to this legislation as it violates local control in the bargaining process. The committee did not vote on the legislation.

Samantha Harkins is the Director of State Affairs for the Michigan Municipal League.  She can be reached at 517-908-0306 or email at sharkins@mml.org

Yesterday the Senate Local Government and Elections Committee consideredHouse Bill 4939, a bill that would allow a department head to serve as a city manager.

The legislation was prompted by a community in Rep. Knezek’s (D-Garden City) district where the police chief is serving as interim city manager. Under the current statute this is permissible in communities with less than 25,000 population. This legislation would expand it to larger communities. The substitute that passed committee would limit this option to communities of 100,000 people. We are interested in ensuring that exception is available for communities of all sizes.

We anticipate a vote on this legislation next week.

Samantha Harkins is the Director of State Affairs for the Michigan Municipal League.  She can be reached at 517-908-0306 or email at sharkins@mml.org

Yesterday the Senate Local Government and Elections Committee held testimony on Senate Bill 733, a bill that would amend the governmental immunity law to limit the highway defect liability of a governmental agency for bodily injury to a pedestrian or other person who was not traveling in a motor vehicle on the improved portion of a highway, or for damage to the person’s property.

Under the bill the plaintiff would have to prove that the governmental agency knew or should have known of the highway defect at least 30 days before the incident. In addition the governmental agency would be presumed to have maintained the highway in reasonable repair.

The presumption could be rebutted only by proof that a vertical discontinuity defect of two inches or more in the highway, or another dangerous condition in the highway itself of a particular character, or both, was a proximate cause of the injury or damage.

The committee did not vote on the legislation.

Samantha Harkins is the Director of State Affairs for the Michigan Municipal League.  She can be reached at 517-908-0306 or email at sharkins@mml.org

Yesterday the Governor announced his Fiscal Year 2015 budget which included the same level of funding for fire protection grants that was appropriated last year – $9.2 million.

Fire protection grants are awarded to communities who have state buildings that are not on the tax rolls to include state office buildings, universities and prisons.

We expect budget hearings to begin in the next week, and we will continue to push for additional funding for fire protection grants.

Samantha Harkins is the Director of State Affairs for the Michigan Municipal League.  She can be reached at 517-908-0306 or email at sharkins@mml.org

This morning the Governor presented his Fiscal Year 2015 Budget to a joint meeting of the House and Senate Appropriations Committee. The budget will include a 3 percent increase in funding to the Economic Vitality Incentive Program (EVIP), as well as a 12 percent infusion into a new EVIP line item that eligible communities can tap into, an increase that totals $36 million. Constitutional revenue sharing has also increased by 3 percent totaling $19.4 million. This means there will be an additional $55.4 million coming to cities, villages and townships through these increases. You can view the entire executive recommendation on the State Budget Office’s website (EVIP begins on page 83).

Unfortunately, while we hope this means there is recognition of the importance of reinvesting in communities, the Governor and Legislature have cut funding by more than $6 billion in the last decade. Our municipal finance system is broken, and we will not be able to create prosperous communities without addressing this critical issue.

In addition, there are still significant problems with the EVIP program. Governor Snyder proposes creating a “gold standard” for communities who meet certain criteria. The exact language was not made available, but it could include criteria like high credit ratings and low unfunded liabilities. Communities who meet the “gold standard” would not have to comply with EVIP.

The Governor is also proposing an additional $28.8 million in EVIP for which eligible communities can qualify. It is population based; however, communities who qualify for EVIP would be eligible for this funding if they meet certain criteria that would bump their population numbers by 10 percent for each one they meet.

The criteria are: the “gold standard”; if a community is in the top 25 percent for violent crime; if a community is in the top 25 percent of unemployment or if a community has submitted an approved deficit elimination plan to the Department of Treasury. These new criteria are in addition to EVIP, and frankly they are very confusing. We will be working to make eliminate the current burdensome EVIP criteria, and that will certainly include not adding additional confusing criteria to the mix.

There is no recommendation that we increase transportation funding which is obviously problematic for our local transportation systems. The League has released a statement on the budget that thanks the Governor for recommending an increase in spending but calls on him to address our broken municipal finance system and increase money for transportation.

We look forward to working on both the general government and transportation budgets as hearings start in the coming weeks.

This week the Senate Banking and Financial Services Committee heard testimony on Senate Bill 295, a bill that works to prohibit individuals who own blighted properties from purchasing additional properties.

The legislation would prohibit a prospective bidder from bidding on foreclosed property if the person had any unpaid fines for the violation of a local blight or nuisance ordinance. It would also require prospective bidders to register with the foreclosing governmental unit at least 14 days before a sale.

The bill would require prospective bidders to certify that they did not own property that was subject to a foreclosure judgment in the previous three tax years, or that had been included in a foreclosure petition in the tax year in which the sale was held.

In addition the bill would require the deed for transferred property to provide for the title to revert to the foreclosing governmental unit if, within five years after the sale, the property were transferred to the person who owned it when the foreclosure judgment was entered.

The League supports the concept behind the bill, and we are working with the sponsor’s office to ensure the process is workable.  The committee did not vote on the legislation.