Today the Senate Reforms, Restructuring and Reinventing Committee heard testimony on Senate Bill 850, a bill that would exempt police and fire from PA 54 so they can have retroactive pay increases after a contract expires. In 2011 the legislature passed a number of reforms to help employers control costs and be better stewards of taxpayer resources. One of the, if not the, most significant reform was to prohibit retroactive pay increases after a contract has expired. This game changing statute, PA 54 of 2011, has helped communities settle contracts more quickly and provides more certainty in municipal budgets. Passage of SB 850 would be detrimental to our ability to settle contracts quickly and efficiently.

I urge you to contact your legislators to let them know how detrimental this carve out would be. The arguments the public safety groups use for supporting this bill are that the number of PA 312 filings would proliferate and the legislature only intended this bill to impact teachers.

According to the Michigan Employment Relations Commission there were only 43 PA 312 filings in 2013 as opposed to 69 in 2011. PA 312 filings are significantly lower than they were before enactment of PA 54.

In addition, even if the legislature only intended this for teachers, it has been a game changer for municipal budgets, and it’s critical that we keep this tool to allow local units the opportunity to settle contracts expeditiously and save taxpayers money.

We appreciate all the members who have already contacted their lawmakers on this issue and we hope others follow their lead. It is critical that you please contact your legislators and ask them to OPPOSE Senate Bill 850. You can find the contact information for your Legislators here.

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 House Committee on Detroit’s Recovery and Michigan’s Future reported a package of bills, House Bills 5566-5575, that seek to deal with the bankruptcy in the City of Detroit. The state will appropriate $194.8 million dollars that will go toward the city’s pension system.

In exchange there are a number of conditions set forth in the package. The bills create an oversight commission that will have approval over the city’s major financial decisions including contracts over $750,000 and collective bargaining agreements. As amended in committee if the commission does not reject a contract for $750,000 or more in 30 days it would be deemed approved. Public Act 312 awards are also subject to review by the commission.

The legislation also requires the city to establish the position of chief financial officer. The bills as amended in committee allow the City to choose between defined contribution plans and defined contribution for new hires but caps the city contribution at 7 percent of base pay. The package also prohibits the City of Detroit from opting out under PA 152 of 2011.

The bills limit travel pay for retirement system board members. Additionally they prohibit new millages for the Detroit Institute of Art.

The bills very narrowly define eligibility for these provisions as a city over 600,000 that is in bankruptcy. We expect the legislation to be on the House floor as early as this week, and anticipate the bills will move quickly through the legislature.

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 month Rep. Andy Schor (D-Lansing) introduced legislation that would allow cities to implement land value taxation.  Land value taxation would place the property tax burden on the actual land and not the buildings or improvements.

This concept has been used widely in other states (most notably in Pennsylvania). Land value taxation encourages investment by taxing the value of the land more heavily than improvements. This incents a property owner to develop property in order to balance the tax burden.

Rep. Schor’s bills, House Bills 5495 and 5496, would allow communities to create land value taxation zones similar to what has occurred with Renaissance Zones. The community can have as many zones as it likes, and they don’t need to be contiguous.

We look forward to working with Rep. Schor and other legislators to push forward this innovative concept to give local communities more options to incent development of property. The League’s Partnership for Place Agenda calls for land value taxation as one of many steps to improving Michigan’s communities as well as the state.

A 2013 article by Next City does a really nice job explaining this taxation issue and the benefits of land value taxation. Check it out.

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

The Senate Agriculture committee took up testimony on Thursday on the changes to the Generally Accepted Agricultural Management Practices (GAAMPs) changes.  The Michigan Department of Agriculture and Rural Development testified to and explained the changes.  There were many individuals in attendance wanting to speak with their concerns to the changes.

The changes recently approved by the Commission add a new category 4 that states land is not suitable for livestock if the area of the community is primarily residential (defined as more than 13 homes within 1/8 of a mile of the animals, or with any home within 250 feet of the proposed facility) AND does not allow for agricultural use.  This would still allow a local community to have an ordinance allowing livestock within their community in these areas if they choose to do so.

If our communities have had or continue to have issues dealing with Right to Farm and the GAAMPs especially as this process moves forward with the new changes, please make me aware of them so those concerns can be passed along to the MDARD and then to the Commission (a request they made to us during their last Commission meeting).

Nikki Brown is a legislative associate for the League handling economic development and land use issues.  She can be reached at nbrown@mml.org or 517-908-0305.

 

The House Local Government Committee took up HB 5560, a bill phasing in more online public notices, on Thursday. This bill, phases in online notices over a 10 year period and creates a three tiered system to indicate how many times a public notice should be required in a print publication and online during each phase of the phase-in approach.

The three tiers can be described as:
Tier A: Issues affecting property rights and taxes.
Tier B: everyday business for the local government of public interest.
Tier C: Everyday business that often does not require community feedback but may be of interest to the public or should be readily available online.

By the year 2025, each tier and publication requirement would look like the following, remembering there are two periods of 5 year increments that allow a local community to diminish the number of print notices and increase the number of online notices:
Tier A: Public notice would be posted on the active portion of a website for 30 days.
Tier A with a link: Public notice would be posted on the active portion of a website for 30 days with a link to the full document.
Tier B: Public notice would be posted on the active portion of a website for 14 days.
Tier B with a link: Public notice would be posted on the active portion of a website for 14 days with a link to the full document.
Tier C: Public notice posted on the active portion of the website for 14 days.

There would still be a requirement to have a hard copy on hand at the local unit of government’s office for inspection for the length of time the notice is required. Additionally, there would be an online archival component necessary as well.

We would like to thank Rep. Amanda Price (chair of the committee as well as the bill sponsor) for taking such a thoughtful, comprehensive approach to this issue taking into account the concerns from all sides. The process was long going through each act that required public notices.  HB 5560 is what is being referred to as the “hub bill” that all of those different acts will point to at the public notice portion.  Each of those acts will have to be amended to make that connection to the “hub bill.” Additionally, any direct mailings that are required to property owners in certain acts will be maintained.

HB 5560 will receive another hearing this Thursday. If you are interested in testifying in support of this bill and online notices please contact me.  Additionally, if there are any questions, please do not hesitate to contact me.

Nikki Brown is a legislative associate for the League handling economic development and land use issues. She can be reached at nbrown@mml.org or 517-908-0305.

The finalizing of the 2014-15 fiscal year budget can begin now that the state’s economic forecasters have agreed revenues are lower than they projected in January.

Leaders of the House and Senate Fiscal agencies and the Department of Treasury said revenues for the 2013-14 current fiscal year will be $317 million lower than expected in January, down $253.2 million in the General Fund and $63.7 million in the School Aid Fund.

For the upcoming 2014-15 fiscal year, the revenue estimating conference revised revenues downward by $299.1 million, down $220.5 million in the General Fund and $78.5 million below in the School Aid Fund from the January estimate.

The new estimate is expected to complicate completion of the budget, especially in the General Fund.

The new estimates mean overall revenue would actually drop to the two funds in the current year from the previous one by 0.1 percent. But in 2014-15, revenues in the two funds would grow by 4.1 percent, even with the downward revision.

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.

Yesterday the House Appropriations Committee passed House Bills 5414 and 5501, legislation that would repeal Driver Responsibility Fees. The fees were enacted over a decade ago to penalize “bad” drivers. The fees have contributed more than $100 million to the state’s general fund.

In addition they fund Fire Protection Grants for local communities. Fire Protection Grants are given to communities who have state buildings (i.e., office buildings, prisons, universities) that are not on the tax rolls to compensate for fire protection.

The League approached the sponsors and asked for dedicated funding for Fire Protection Grants. The committee discussed at length that they would find funding for these important grants. The sponsor is working with the House Fiscal Agency to identify a dedicated source of revenue.

 

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

Late last week the House introduced a package of bills, House Bills 5566-5575, that seek to deal with the bankruptcy in the City of Detroit. The state will appropriate $194.8 million dollars that will go toward the city’s pension system.

In exchange there are a number of conditions set forth in the package. The bills create an oversight commission that will have approval over the city’s major financial decisions including contracts over $750,000 and collective bargaining agreements. Public Act 312 awards are also subject to review by the commission.

The legislation also requires the city to establish the position of chief financial officer. The bills require defined contribution plans for new hires and prohibits the City of Detroit from opting out under PA 152 of 2011.

The bills limit travel pay for retirement system board members. Additionally they prohibit new millages for the Detroit Institute of Art.

The bills very narrowly define eligibility for these provisions as a city over 600,000 that is in bankruptcy. Hearings begin for this package on Tuesday, May 13, and we expect they will move quickly through the legislature.

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 Michigan Senate reported its version of the budget that scraps the Economic Vitality Incentive Program (EVIP) and reworks the revenue sharing formula.

The Senate’s proposal includes an additional $31 million for revenue sharing for local communities. The proposal would give a 1 percent increase to all cities, villages and townships who were eligible for EVIP in 2013-14 upon showing they have a dashboard (the only bit of EVIP left in this proposal.)

The remaining $28.6 million would be distributed based upon a formula that looks at adjusted unit type population, taxable value, and tax yield equalization. No payments of less than $3,500 would be made.

In computing unit type population, townships over 20,000 and townships over 10,000 that offer 24-hour police and fire services and water and sewer services to more than 50 percent of their residents would receive the same weight as cities.

The Senate proposal also includes $10 million in grants to communities who show signs of probable financial distress. A community could receive up to $2 million for projects or services to help them move toward fiscal stability.

The Senate Fiscal Agency has put together a comparison of the House and Senate EVIP recommendations that is available here: EVIP comparison

A huge thank you to Senator Pappageorge for removing these burdensome EVIP requirements. On the Senate floor Senate Pappageorge announced that EVIP has done its job, and it’s time to move on. We are always vocal when we don’t like something, so please make sure you take time to say thank you. You can email Senator Pappageorge here.

We are also pleased that we are having a discussion about distributing scarce resources to communities who are providing services. Of the three proposals before us, this one is certainly moving in the best direction to help communities provide essential services and create the kinds of places that will attract and retain talented employees and jobs.

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