This morning (Tuesday, Feb. 25, 2014) the Senate introduced a ten bill package that represents months of negotiations on personal property tax (PPT) reform. The Michigan Municipal League’s message on PPT has consistently been 100 percent, guaranteed replacement. The bills do represent 100 percent replacement and a more stable reimbursement mechanism.

The bills, Senate Bills 821-830, will be taken up in the Senate Finance Committee on Wednesday, February 26. We anticipate the bills moving quickly through the legislative process, likely before spring break in April.

League staff and League members joined Lt. Gov. Brian Calley this morning in a news conference about the new PPT package. Go here to read about the news conference. View more photos from today’s PPT press conference. View a League press release about the announcement.

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 General Government Subcommittee heard testimony on the Governor’s Fiscal Year 2015 budget recommendations for the Department of Treasury including the Economic Vitality Incentive Program (EVIP).

The first hour of the committee consisted of testimony from the Department regarding their programs and specific recommendations. The committee then heard testimony from the communities present regarding their concerns with the duplicative reporting requirements and bureaucratic busywork into which the program has devolved.

The committee heard EVIP concerns articulated by Alma City Manager Phil Moore, Howell City Manager Shea Charles, and Middleville Village Manager Rebecca Fleury as well as East Lansing Mayor Nathan Triplett and Clerk Marie Wicks.

The committee appeared receptive to the concerns with the program and will be holding an additional week of testimony to further discuss this issue.

View additional photos from today’s hearing 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

As the Michigan Legislature has considered eliminating personal property tax (PPT), the Michigan Municipal League’s message has been clear and consistent – 100% reimbursement of personal property tax revenue and a stable reimbursement mechanism that includes more than an appropriation. In new legislation expected to be introduced in the Senate today we have achieved both of those goals! View an mlive article about the news conference.

When the Legislature passed PPT reform in December of 2012, the League ultimately remained neutral due to a tie-bar of the entire package to the August 2014 ballot initiative. In the last 15 months we’ve been involved in detailed workgroups with all of the parties involved to work through the many issues with the package, both technical and substantive policy issues.

This morning (Tuesday, Feb. 25, 2014), League staff and League members attended a news conference along with Lt. Gov. Brian Calley to announce the 10-bill package. Speaking on behalf of the League at the event were Dearborn Mayor Jack O’Reilly, a member of the Michigan Municipal League Board of Trustees, and Holland Mayor Kurt Dykstra. Also attending the event were Flint Mayor Dayne Walling and League CEO and Executive Director Dan Gilmartin.

And League President Jacqueline Noonan, mayor of Utica, issued this statement about the announcement: “Hundreds of Michigan communities rely on the personal property tax as a regular revenue source to support essential services, such as police and fire protection, road maintenance and infrastructure improvements,” said Mayor Noonan. “From the very beginning of this effort, the League has maintained that reforming the PPT was a worthy public policy goal. But we’ve consistently sought 100-percent replacement of the PPT revenue. These bills do that. This is very good news for Michigan’s communities.”

In November, the Lt. Governor spoke to our board to discuss a proposal to ask for the League’s support on new bills and the August 2014 vote. The proposal included 100% reimbursement of ALL lost PPT revenue and eliminating the problematic local essential services assessment. It would be replaced with a statewide assessment administered by a new authority that does NOT have to go through the appropriations process. It is a significantly more stable reimbursement mechanism.

The League looks forward to supporting this legislation as it moves through the legislative process and supporting the August 2014 ballot proposal. Please contact your legislators and ask them to support this legislation. Reimbursing 100% of PPT revenue in a stable way has been our goal, and it’s exciting to have the opportunity to achieve it.

View more photos from today’s PPT press conference. View a League press release about the announcement.

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

For years the League has been working on a tax reduction loophole that was created due to the 2002 Michigan Supreme Court case of WPW Acquisition Company v. City of Troy. After Proposal A created the term taxable value, the Legislature passed legislation that allowed for an increase and decrease of certain commercial property’s taxable value based on their occupancy. This was meant to allow the taxable value of income producing property to reflect the ebb and flow of the economy.

Under that system, the City of Troy granted a reduction to WPW Acquisition Company due to a reduced occupancy. However, when the City increased their taxable value when they were more fully occupied, WPW Acquisition Company sued the City, claiming they could not increase their taxable value above 5% or the rate of inflation, whichever is less, due to Proposal A. The Supreme Court addressed the question of increases in occupancy and agreed with WPW. However, the reduction issue due to occupancy was never in question, so a legal loophole, creating tax inequity, was born.

Yesterday morning the House Tax Policy Committee heard testimony on Senate Bill 114, a bill introduced by Senator Vince Gregory (D-Southfield) that amends the General Property Tax Act. The Act’s definition of “losses” includes an adjustment in value, if any, due to a decrease in the property’s occupancy rate, to the extent provided by law. The definition of “additions” includes an increase in value attributable to the property’s occupancy rate if a loss had been previously allowed because of a decrease in occupancy rate, or if the value of new construction was reduced because of a below- market occupancy rate.

The bill would limit the use of occupancy rates in the determination of losses to the period before December 31, 2013. The use of occupancy rates in the determination of additions would be limited to the period before December 31, 2001.

Earlier this week the House Oversight Committee heard testimony on House Bills 5193 and 5194, bills that amend the Open Meetings Act (OMA) as well as general testimony on changes to the OMA.

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 the 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. I was joined by Lori Grigg-Bluhm, Troy City Attorney and President of the Michigan Association of Municipal Attorneys, to discuss these changes.

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 House Tax Policy Committee reported 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 legislation now goes to the full House for consideration.

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

HB 4487, a bill to allow Downtown Development Authority funds to be used for creating and operating a marketing program for local agricultural (think local farmer’s markets), passed out of the full House of Representatives yesterday.  The DDA act does not currently prohibit this type of activity but the sponsor (Rep. Stacey Erwin Oakes, D-Saginaw ) wanted to make it clear that it is allowable.  An additional hope of the bill sponsor is that this legislation would bring to light the ability of DDAs to do this and thus they would begin partnering (or create) with their local farmer’s market in an effort to make it more vibrant.  The MEDC is supportive of this effort to create strong farmer’s markets.

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.  

This week the House Local Government Committee heard testimony on House Bill 5160, a bill that would allow a local unit of government the option of contracting with the county treasurer to administer tax collection.

The bill allows an agreement to let the county collect taxes, and the agreement would have to be approved by the governing body of the city, village or township.

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

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 bill passed by the House 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 bill now heads to the Senate for concurrence and then 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 unanimously reported House 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.

The legislation now heads to the full Senate for its approval.

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