Category Archives: Social Networking

City Income Tax Communities Oppose Senate Changes

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The Michigan Senate voted Tuesday, Dec. 15, 2015, to discharge House Bill 4462 from the Senate Finance committee and then inserted language that many of the 22 income tax communities have weighed in on opposing. Despite the opposition, the Senate passed it late Tuesday night on a vote of 21-17.

The new language added by the Senate would allow a “voluntary” written agreement between an income tax levying city and an owner of property located in the city on behalf of a qualified employer or with a qualified employer who would make an advance payment of the withholding tax that would normally be deducted from employee compensation and remitted to the city, equal to the nonresident rate for the duration of the written agreement.

The Michigan City Income Tax Administrators Association, representing all 22 income tax cities met last week to discuss this proposal and subsequently, the 14 cities who were represented at the meeting passed a unanimous resolution opposing this proposal. Those cities represented at the meeting were: Grand Rapids, Muskegon, Pontiac, Saginaw, Lansing, Springfield, Jackson, Big Rapids, Lapeer, Ionia, Portland, Detroit, Battle Creek and Flint.

Beyond the grave concerns over the administrative burden that this type of concept would place on a city, there were numerous questions raised about the ability to administer such an agreement, where there is no model to follow and no other similar allowance for treatment of income tax and the federal, state, or local level.  Negative consequences for the taxpayer, possible loss of revenue for the city, and an inability to ensure accountability or compliance were among many of the reasons cited in opposition to this idea.

The League is working with these communities to oppose this legislation now that the bill has been returned to the House.

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

New Federal Transportation Bill, FAST Act, Becomes Law

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President Obama signed the FAST (Fixing America’s Surface Transportation) Act yesterday, making the first long term transportation bill in a decade official. There are some big wins for local governments within the new law, which is worth approximately $305 billion. A good, comprehensive 13 page summary of the law can be found here.

The biggest win for local communities, quite simply, is that it is a 5 year arrangement and local leaders will not have to wonder what will happen every six months under more extensions. The League had been advocating first and foremost for a bill that expands beyond the next fiscal year to enable more long-term planning for transportation projects. Specifically, there are many other significant victories being highlighted in the bill, which spans 1300 pages.

The Surface Transportation Program is now the Surface Transportation Block Grant Program and increases the amount allocated to local leaders from 50% to 55% over the length of the bill and gives locals greater flexibility in how the funds are spent.

The Surface Transportation Block Grant Program would now house the Transportation Alternatives Program, and is proposed to be increased from $835 million to $850 million. And the bill gives Metropolitan Planning Organizations additional flexibility in how to spend their funds.

Transit Oriented Development would be eligible for the TIFIA program and the minimum project size threshold would be lowered to $10 million, expanding the program significantly for smaller projects.

The Michigan delegation was mostly supportive with both Senators voting yes and twelve of the fourteen Representatives voting for the bill as well. Congressmen Amash and Huizenga were the two no votes.

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

Congress Poised to Pass Long-Term Transportation Package This Week

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For the first time in ten years, Congress is on the verge of passing a long-term transportation package and there are some big wins for local governments within the new deal. The committee of House and Senate negotiators have agreed to the new bill worth approximately $305 billion, entitled the FAST Act (Fixing America’s Surface Transportation), and both Chambers are expected to pass it by the deadline of this Friday, December 4th. The biggest win for local communities, quite simply, is that it is a 5 year arrangement and local leaders will not have to wonder what will happen every six months under more extensions. The League had been advocating first and foremost for a bill that expands beyond the next fiscal year to enable more long-term planning for transportation projects. Specifically, there are many other significant victories being highlighted in the bill, which spans 1300 pages.

The Surface Transportation Program is now the Surface Transportation Block Grant Program and increases the amount allocated to local leaders from 50% to 55% over the length of the bill and gives locals greater flexibility in how the funds are spent.

The Surface Transportation Block Grant Program would now house the Transportation Alternatives Program, and is proposed to be increased from $835 million to $850 million. And the bill gives Metropolitan Planning Organizations additional flexibility in how to spend their funds.

Transit Oriented Development would be eligible for the TIFIA program and the minimum project size threshold would be lowered to $10 million, expanding the program significantly for smaller projects.

The bill is being paid for by a series of sources, not including any changes to the federal gas tax. Some of the sources include the Federal Reserve surplus account, selling a portion of the Strategic Petroleum Reserve and cutting the dividend the Federal Reserve pays to some member banks.

We will notify you as soon as the bill has cleared both the House and Senate later this week. We’ll know more details of the bill in the coming days, but the changes identified so far show significant improvement for local governments and their support for transportation infrastructure by the federal government. We’re pleased after all these years to be on the verge of such a victory!

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

Senate Committee Reports Bill To Expand Recreation Authorities

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Michigan Municipal League members, including Big Rapids Mayor Mark Warba (right), testified in Lansing recently on an issue facing park and recreation authorities.

Michigan Municipal League members, including Big Rapids Mayor Mark Warba (right), testified in Lansing recently on an issue facing park and recreation authorities.

Working in conjunction with officials from the City of Big Rapids, the League was successful in getting Senate Bill 481 (Booher) reported from the Senate Local Government committee earlier this week.

The bill, modeled on similar legislation from previous sessions, would expand the definition of an eligible municipality to include a school district.

This change would allow a city, village, or township to partner with a school district to form a recreation authority allowing broader access to recreation programming and facilities throughout a region.

Big Rapids Mayor Mark Warba (left) testifies in Lansing.

Big Rapids Mayor Mark Warba (left) testifies in Lansing.

Language was added in this bill to address concerns raised previously about the need to clarify the appropriate use of any funds raised by an authority that included a school district.

Following a committee hearing in which Big Rapids city and school officials testified in support of the bill, the committee voted the bill out to the full Senate for consideration once they return from break in December.

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

Budget and Speaker Action in US House of Representatives

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The Unites States House of Representatives just took some significant action on critical issues which had been looming. They passed legislation which suspends the debt ceiling until March of 2017 and lifts budget caps set by sequestration by $80 billion through September 2017. That increase will be split evenly between discretionary spending and non-discretionary spending. This could result in positive outcomes for local government programs in the coming year and a half. Senate members have sounded mostly positive about the deal. Essentially at the same time, they voted Paul Ryan (R-WI) to serve as the next House Speaker, ending weeks of turmoil within the GOP caucus. 

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

Possible Federal Debt Limit and Budget Deal This Week

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A deal to increase the federal debt limit and set some federal budget figures has been struck by Congress and the President, according to many sources out of Washington DC. The deal would raise the debt ceiling through March 2017 and would lift sequestration caps in the budget for fiscal years 2016 and 2017. Currently it appears that long term federal transportation solutions are not included in the agreement. While the plan has not been made public yet, it is expected to be within the next day or two. Congress has only a few days left to act before the current federal debt limit is reached, so time is winding down for an agreement. Additionally, it is believed that there is a desire by many in the Republican caucus to strike an agreement before a new Speaker takes the helm.

Join #CitiesLead2016 to Encourage Presidential Candidates to Address City Issues

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`The National League of Cities has launched Cities Lead 2016, which is a new platform for local officials to engage with Presidential candidates on important city issues. By signing up here, you can receive updated information on the campaign and send a message that you want to hear candidates address key issues that impact cities and villages such as transportation, economic development issues and public safety. On the NLC’s website for the campaign, you can download a brochure on the issues, learn about all the candidates and find additional resources. Please help us get local issues into the Presidential spotlight!

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

Transportation Sees Action in Congress

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The House Transportation and Infrastructure Committee voted this week to support a six year federal transportation bill, the Surface Transportation Reauthorization and Reform – STTR – Act of 2015 (H.R. 3763), which has provisions that are seen as being very favorable to local governments – similar to that of the DRIVE Act passed by the Senate prior this summer. This includes incremental growth in local government funding under the Surface Transportation Program and preserving local authority to allocate funding for multi modal transportation networks under the proposed STP Set Aside. One major difference however, is that the House proposal does not provide for a funding stream for the nearly insolvent Highway Trust Fund, whereas the Senate plan did have three years of funding proposed. But this step is seen as important and positive for getting a long term transportation plan on the books soon. While there may be another short term extension before the House and Senate can resolve their proposals and agree on how to fund them – the hope is that this deal can be in place by the holidays.

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

House Passes $1.2 Billion Road Funding Plan that Relies on $600 Million in General Fund Revenue

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A fire truck makes an emergency run over crumbling roads in Macomb County.

A fire truck makes an emergency run over crumbling roads in Macomb County.

Late last night the Michigan House of Representative passed a plan that would raise $1.2 billion to fix Michigan’s infrastructure but relies heavily on state general fund revenue to do so. The plan could have a significant negative impact on the essential services that communities provide and Michigan Municipal League has consistently expressed our concern with any road funding solution that would jeopardize the long-term fiscal sustainability of this state and its communities.

This plan contains $600 million in new revenue and $600 million in general fund revenue. The new revenue would be generated by increasing gas taxes by 3.3 cents and registration fees by 40%. The plan does not identify where the existing revenue will come from. The following bills were included in the House passed plan.

• HB 4370 provides $200 million in tax relief by expanding the Homestead Property Tax Credit and also dedicates $600 million of income tax revenue to transportation. Based on current revenue and expenditure projections, this statutory dedication of General Funds would not result in a year end budget deficit greater than $60 million in the next five years.

• HB 4736  increases passenger and commercial vehicle registrations an average of $55 (40%) per vehicle. Additionally, the bill provides for plug-in hybrid ($30) and electric ($100) vehicle registration fee increases resulting in $400 million revenue increase for transportation.

• HB 4614, HB 4616, and HB 4738 provide for gas/diesel tax increases to 22.3 cents (increase of 3.3 cents) per gallon by 2019. The bills also implement diesel parity, institute a process for taxing alternative fuels, and tie the fuel tax rate to inflation resulting in $200 million revenue increase for transportation.

• HB 4610 allows townships contributing 50% or more to a road project to require an RFP for pavement projects over $50,000 and gravel projects over $25,000.

• HB 4611 requires an RFP process for all projects over $100,000 for MDOT. Local road agencies must do RFPs for all projects, excluding routine maintenance, over $100,000, unless the local road agency affirmatively finds that they can do it themselves for less.

• HB 4737 requires MDOT and local road agencies to secure warranties, where possible, for construction and preservation projects over two million dollars.

• SB 414 creates an automatic rollback of the income tax rate equal to the amount General Fund revenue exceeds the rate of inflation annually. The rollback begins on January 1, 2019 and the tax cut level will be dictated by annual General Fund levels and will vary from year to year.

The League strongly encourages Governor Snyder and quadrant leaders to restart their conversation and come up with a road funding plan that does not jeopardize the essential services that Michigan citizens rely on, such as police and fire protection, schools and public transit.

Additionally, the League encourage you to reach out to your individual Senator and ask them to pass a long-tern fiscally sustainable solution that relies more on new revenue and less on general fund revenue , does not jeopardizes future state budgets and does not  negatively impact the essential services communities provide.

View a League media statement on the House roads plan.

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.