Earlier this week the Senate Finance Committee reported HB 5074, a bill that would change the monthly interest rate that a county treasurer can charge other taxable units in the county that have delinquent property taxes due. The current monthly rate of interest is one percent. Under the bill, the monthly rate of interest would be “up to” one percent.

Under Michigan’s tax reversion process, county treasurers can assess “chargebacks” under the protocol they follow when local units of government have borrowed from a county’s delinquent tax revolving fund. If summer and winter property taxes are not collected by March 1 of the following year that the tax is owed, local treasurers pass on notices of unpaid or delinquent taxes to county treasurers. In many counties, the county treasurer runs a delinquent tax revolving fund.

This week the Senate Economic Development Committee considered Senate Bills 658 and 659, bills that would force more online retailers to collect sales tax at the point of the sale. Current law requires customers to report online sales and pay taxes on those sales, but enforcement is not efficient.

This legislation goes hand in hand with the Marketplace Fairness legislation the League has been supporting at the federal level.

The League supports the bills, and 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

This afternoon the Senate Finance Committee reported Senate Bill 402, a bill that would ultimately reduce the rate of the state income tax from 4.25 percent to 3.9 percent.

The legislature is mandated by statute to provide revenue sharing payments to local units of government, yet in the last decade it has diverted $6 billion to fill its own budgetary holes.

We’ve repeatedly heard “there’s no revenue to share” even though that statement has obviously been uttered by those who do not understand that revenue sharing belongs to local units of government. The state’s role is merely to collect the revenue and remit it to the local units. It has broken that promise.

Either way now that there is “revenue to share” there has been zero discussion about giving that money back to local units in hopes of restoring the money that has been taken unlawfully. As a result the League opposes any sort of tax relief without a comprehensive discussion of how state resources should be allocated.

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 Military and Veterans Affairs Committee heard testimony on Senate Bill 428, a bill dealing with the purchase of U.S. flags by local units of government.

The substitute bill considered by the committee (flag bill) requires a local unit of government to purchase flags made in the United States if there they are competitively priced with flags made in other countries. If a local unit purchases a flag from another country (because competitively priced ones are not available), the local unit must post on its website the location where the flag was purchased.

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

This morning the House Tax Policy Committee reported 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 now heads to the full chamber for review.

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 Rep. Earl Poleski (R-Jackson), Chair of the House General Government Appropriations Subcommittee, addressed the League board to talk about the upcoming budget.  The general government budget is the budget that contains revenue sharing and the Economic Vitality Incentive Program (EVIP).

Board members were direct with Rep. Poleski in discussing their frustration with funding cuts to revenue sharing and challenges with the EVIP program.

Utica Mayor and League President Jacqueline Noonan was concerned over Poleski’s comments about how new EVIP standards will look at legacy costs. Noonan explained many communities, hers included, have been doing all they can to address legacy costs and to now possibly get a requirement to do so is bothersome.

“At the very basic level I have some resentment that the Legislature seems to think that those of us in local government don’t know what we’re doing and that we haven’t already done all of these things,” Noonan told Poleski. “In fact, we are trying very hard – well intentioned, intelligently planning – to fund those legacy costs.”

Linden Mayor and Former League President David Lossing found it interesting that Governor Snyder in his recent State of the State address asked the federal government to distance itself from state government budget issues and yet the state of Michigan wants to be closely involved in local budget issues. He encouraged Poleski to form a work group to study and potentially reform three key areas of municipal financing – the personal property tax, Proposal A and the Headlee Amendment.

“As I listened to the governor’s State of the State address last week I find it really ironic that as he was calling for an amendment to the U.S. Constitution to get the Congress to consider to get the federal government out of state budget issue areas the state still intervenes on our local budget issue areas through EVIP,” Lossing said.

Grand Rapids Commissioner Rosalynn Bliss, MML board member, said the importance of placemaking and creating vibrant communities as a way to spur economic development throughout the state is seemingly not understood among lawmakers.

“I’m frustrated to hear over and over from state officials, ‘that we know what the problem is and we’ll fix it.’ We got to come up with a solution quickly,” Bliss said.

We appreciate Rep. Poleski’s taking time to address the board and answer tough questions. He expressed a willingness to explore changes to the municipal finance system as well as ways to deal with pension and OPEB obligations.

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 the House Tax Policy Committee heard testimony on two pieces of legislation that would require assessors to get written permission to enter structures in order to assess them.

House Bill 5172 requires written consent for an assessor to enter a structure, and if that consent is denied the assessor cannot increase the value of the property based on any assumptions.

House Bill 5173 states that the assessor’s procedural manual may not require a homeowner to grant an assessor access to a property nor may an assessor access a property without written permission.

There was significant concern voiced by a number of committee members on this legislation. Obviously this legislation would significantly hamstring the ability of our assessors to do their jobs.

The committee did not vote on the legislation, and they are currently not scheduled to be taken up at next week’s meeting.

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

Last night the Governor gave his State of the State address. He did mention the need to invest in roads, but there was no mention of reinvesting in communities or fixing the state’s broken municipal finance system.

The following statement is from Utica Mayor and Michigan Municipal League President Jacqueline Noonan regarding the state budget surplus announced yesterday (Thursday, January 16, 2014):

“We strongly support the Governor’s ongoing call to fix Michigan’s crumbling roads and bridges, but we grow increasingly disappointed in the total lack of concern for fixing the state’s archaic and broken municipal finance system.  Unless and until the Legislature and Governor stop raiding funds that by law were supposed to go to local communities for police and fire, roads and bridges, and other essential services, Michigan’s per capita income levels will continue to lag other states and the nation, and more of our cities will plummet into fiscal crisis. Not only is this not sustainable for the status quo, but it keeps Michigan from being competitive in attracting and retaining talent and jobs in a global market. While fiscal crises confront cities all across Michigan, the silence and lack of solutions to fix the state’s broken municipal finance system from the Governor and Legislature is deafening.”

“To move Michigan forward, the League, along with numerous partners, has developed a policy vision and plan for Michigan’s cities called the Partnership for Place: An Agenda for a Competitive 21st Century Michigan. You can view this policy agenda here:www.mml.org/advocacy/partnership-for-place.html.”

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

Next Wednesday the House Tax Policy Committee is considering two pieces of legislation that would require assessors to get written permission to enter structures in order to assess them.

House Bill 5172 requires written consent for an assessor to enter a structure, and if that consent is denied the assessor cannot increase the value of the property based on any assumptions.

House Bill 5173 states that the assessor’s procedural manual may not require a homeowner to grant an assessor access to a property nor may an assessor access a property without written permission.

Obviously this legislation would significantly hamstring the ability of our assessors to do their jobs. The legislation will receive a hearing on Wednesday, January 22 at 9 a.m. Please contact your legislators and ask them to vote no on this 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 the House Oversight Committee heard testimony on House Bills 5193 and 5194, bills that amend the Open Meetings Act.

House Bill 5193 prohibits a local unit from going into closed session in connection with anticipated litigation. House Bill 5194 indicates that if a public body reenacts a disputed decision in cases where an action has been initiated to invalidate a decision of a public body then that reenactment is not a defense to a criminal action.

The League testified in opposition to this legislation. In particular the changes to HB 5193 are confusing and unnecessary. We further indicated a desire to amend the statute to allow reasonable (as opposed to actual) attorney fees and to allow the discussion of the sale of property (in addition to purchase and lease of property) in closed session.

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