Category Archives: Municipal Finance

Act 51 Compliance Requirements Due September 30th

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Act 51 compliance requirements are due September 30th as a result of changes that were made to the compliance requirements of Public Act 51 of 1951, Section 18j, MCL 247.668j related to funding from the Michigan Department of Transportation for roadways within local units of government.

To comply, by September 30, 2015, a certificate regarding the compensation plans for your local transportation employees must be completed, signed, submitted to the State Department of Transportation and posted on your municipal website. MDOT has summarized the compliance requirements in FAQ form.

If this form is not submitted by September 30th MDOT may withhold Act 51 funding for non-compliance.

John LaMacchia is a Legislative Associate for the League handling transportation, infrastructure, and energy issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

Proposal 1 Offers Michigan’s Last, Best Chance to Fix Roads with Guaranteed Funding

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John LaMacchia discusses Proposal 1 at a recent Burton City Council town hall meeting.

John LaMacchia discusses Proposal 1 at a recent Burton City Council town hall meeting.

The fate of Proposal 1 will be decided by voters next week (Tuesday, May 5), and there is one thing guaranteed about the outcome: If it passes it will provide a solution to fix Michigan’s crumbling infrastructure and will guarantee funding for transportation, local government, schools. And if it fails? No one can guarantee a solution out of the state Legislature.

That’s the simple message from the Michigan Municipal League’s John LaMacchia, legislative associate, in his many speaking engagements, media interviews and community meetings about Proposal 1 in recent days, weeks and months. LaMacchia has been the League’s voice on Proposal 1 after the League board unanimously endorsed the road funding package in January.

“The one thing that those for and against Proposal 1 agree on is the longer we take to come up with a transportation funding plan, the worse are roads are going to get,” LaMacchia said.

If Proposal 1 passes, it would guarantee, for the first time, that every penny we pay in state fuel taxes goes to transportation.

Bad-bridge-small-for-webLansing would no longer be able to divert taxes paid on gas to some other state program or service.

Here is some additional information about what Proposal 1 would do:

Ballot Proposal:

  • Raises the sales tax from 6% to 7%
  • Exempts sales tax from motor fuel
  • Removes higher education funding from the School Aid Fund
  • Dedicates a portion of the use tax to K-12 education

Statutory Changes Effective Only if Proposal 1 Passes:

  • Increases the tax charged on motor fuel
  • Eliminates the depreciation on vehicle registration fees
  • Increase registration fees on the heaviest trucks
  • Requires more competitive bidding and road warranties
  • Restores the Earned Income Tax Credit to 20% of the federal level

Revenue Generated:

We would fix more roads instead of just fill potholes if Proposal 1 passes May 5.

We would fix more roads instead of just fill potholes if Proposal 1 passes May 5.

Fixing our roads will make them safer by repairing dangerous potholes and improving roadway design. Today, many drivers swerve to avoid dangerous potholes or lose control of their vehicles as a result of flat tires.

According to TRIP, a national transportation research organization, roadway design is a contributing factor in about one-third of fatal traffic crashes. Between 2008 and 2012, 4,620 people died in Michigan car accidents – an average of 924 fatalities per year.

For more information about Proposal 1 go to the League’s Safe Roads Yes! webpage.

To learn more about the Safe Road Yes! campaign go here. View here a series of question and answer videos about Proposal 1. Check out what MML members have to say about Proposal 1. See how much your community will get in additional road dollars and constitutional revenue sharing if Proposal 1 is approved. View which Michigan communities have passed resolutions in support of Proposal 1.

Matt Bach is director of media relations for the Michigan Municipal League. He can be reached at mbach@mml.org. The League’s John LaMacchia can be reached at jlamacchia@mml.org.

Property Tax Exemption for Housing Organizations Sent to the Governor

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House Bill 5182, legislation that would allow the State Tax Commission to grant a local property tax exemption for qualified housing organizations (namely Habitat for Humanity) has been sent to the Governor.

The bill as substituted would say an exemption is in effect for the lesser of 5 years or until the the property is leased to a low-income person or is transferred to another owner. For residential lots the exemption is for 3 years or until the property is leased or transferred.

The League testified in opposition to this legislation. The legislature continues to erode local control by taking local money for state priorities.

Samantha Harkins is the Director of State Affairs for the League handling municipal finance issues.  She can be reached at sharkins@mml.org or 517-908-0306.

Important Special Assessment Tool Pushed Off Till Next Term

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Senate Bill 307, a bill introduced Senator Steve Bieda (D-Warren) that removes population thresholds for communities who want to use a police and fire special assessment as a revenue option has been pushed off till next term.

Under the law currently a city with a population of under 15,000 may levy a police and fire special assessment. A city with a population of more than 15,000 and less than 70,000 in a county with a population between 230,000 and 235,000 may levy an assessment with a vote of the people. The only city that meets this very narrow criteria is the City of Saginaw.

Senator Bieda’s bill would eliminate the population threshold so that any city above 15,000 could levy a special assessment for police and fire under the Act with a vote of its electorate.  The bill was amended to include a 10-year sunset. We are grateful to Sen. Bieda for introducing this important local option.

The League is very supportive of this legislation and will look to secure its passage early next year.

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

Main Street Fairness Bills Pass as Part of Transportation Package

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SB 658 and SB 659, that would require that a sales tax be added on to purchases made by retailers who have a so-called “nexus” within the state, pass as part of the transportation package. These bills are more commonly known as the Main Street Fairness legislation.

The bills includes a seller who sells “tangible personal property” and includes new provisions that a seller is presumed to have a nexus if it uses its employees, agents, representatives, or independent contractors to promote sales to purchasers.

It also tags a seller if it shares management, business systems, business practices, or employees with the seller, or in the case of an affiliated person, engages in “Intercompany transactions” with the seller to establish or maintain the seller’s market.

And a seller is presumed to have a nexus in the state if its total cumulative gross receipts from sales for storage, use or consumption to purchasers in this state exceed $50,000 during the immediately preceding 12 months.

The League supports this legislation .

Samantha Harkins is the Director of State Affairs for the League handling municipal finance issues.  She can be reached at sharkins@mml.org or 517-908-0306

Bill Enforcing Income Tax Collection from Lottery Winners Fails to Secure Passage in the Senate

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House Bill 5924, legislation that would require the Department of Treasury to withhold local income tax from a lottery winner at the time the winnings are claimed, has been pushed of to the next term after not securing passage in the Senate..

While a lottery winner is required to pay local income tax (if applicable), it can be very difficult to enforce. This would aid in that enforcement.

Thank you to Rep. Daley for introducing this legislation and to the committee chair, Rep. Farrington, for giving it a hearing so quickly in the House.

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

Cemetery Perpetual Care Bill Sent to the Governor

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Senate Bill 1125, has been sent to the governor. This legislation that would Public Act 215 of 1937, which authorizes municipalities to own or control cemetery or burial grounds.

The bill would allow a municipality to establish an endowment and perpetual care fund for a municipally owned cemetery as part of an agreement with a community foundation.

It would also require the community foundation to authorize the disbursement of earnings
from the fund to the municipality for care and maintenance of the cemetery. The bill would also require the cemetery to maintain records regarding the use of earnings from
the fund.

In addition the bill would allow the community foundation’s fees and costs associated with the agreement to be paid from the principal of the fund and specify information that the community foundation would have to include in an annual audit.

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

Michigan Local Government Benchmarking Consortium to Host Conference

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Michigan Local Government Benchmarking Consortium’s Benchmarking for Success Conference will take place on Tuesday, December 3 at the Lansing Center from 9;30 am to 4:00 pm. This one-day conference opens with a conversation on Local Fiscal Crisis, Bankruptcy, and Emergency Managers with Eric Scorsone, Extension Specialist, Michigan State University and the Honorable Dayne Walling, Mayor of Flint. Other topics include benchmarking and best practices, and the general macroeconomic outlook and implications for Michigan local governments. A detailed agenda and registration information can be found here.

John LaMacchia is a Legislative Associate for the League handling transportation and infrastructure issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

House Appropriations Committee Votes to Cut CDBG Funds in Half

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The US House Appropriations Subcommittee on Transportation, Housing and Urban Development voted to cut Community Development Block grant (CDBG) funding to communities in half from $3.08 Billion in 2013 to $1.6 Billion in 2014. This reduction is on top of the cuts from the sequester. An amendment by Rep. Fattah (D-PA) would have restored the funding to $3.3 Billion, but was defeated along a party line vote. Please contact your Congressional Representatives and tell them how important CDBG funding is – and that communities cannot absorb a 50% reduction. For Contact information for your Congressional leaders, click here.

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

Contact Your Congressional Representative to Move Marketplace Fairness in House

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Now that the Marketplace Fairness bill, referred to also as the online sales tax parity issue, has moved to the US House of Representatives, local officials need to be contacting their Congressional Representative to urge them to move the bill. Currently, the House introduced bill, H.R. 684, is in the House Judiciary Committee. But, while the bill is not up for the full House yet, we still need to communicate with our delegation so they know how important this issue is to local communities. You can get contact information for your member of Congress here.  This parity would bring hundreds of millions in lost revenue back to Michigan! Urge your Congressperson to Support the Marketplace Fairness Bill!

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