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. We are hearing the House Commerce Committee will be taking up House Bill 5097, a bill that would exempt police and fire from PA 54 so they can have retroactive pay increases after a contract expires. This would be detrimental to our ability to settle contracts quickly and efficiently.  The bill will be taken up in committee on Wednesday, March 5.

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 House Bill 5097. You can find the contact information for your Legislators here.

We’re also starting to see some traction on this issue in the media, including an article in Gongwer News Service with the headline “MML Beginning Opposition Campaign on Retroactive Py Raises Bill”. The article, which can be viewed here if you subscribe to Gongwer, includes references to this blog post.

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.

This morning the House Tax Policy Committee passed 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.

This afternoon the Senate Finance Committee unanimously passed 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 by the full Senate next week. We anticipate the bills moving quickly through the legislative process, likely before spring break in April.

League staff and League members (Dearborn Mayor Jack O’Reilly, Holland Mayor Kurt Dykstra, Flint Mayor Dayne Walling and Delta Township Manager Richard Watkins) joined Lt. Gov. Brian Calley yesterday 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

Last week the Senate Banking and Financial Services Committee passed Senate Bill 295, a bill that works to prohibit individuals who own blighted properties from purchasing additional properties.

The legislation would prohibit a prospective bidder from bidding on foreclosed property if the person had any unpaid fines for the violation of a local blight or nuisance ordinance. It would also require prospective bidders to register with the foreclosing governmental unit at least 14 days before a sale.

The bill would require prospective bidders to certify that they did not own property that was subject to a foreclosure judgment in the previous three tax years, or that had been included in a foreclosure petition in the tax year in which the sale was held.

In addition the bill would require the deed for transferred property to provide for the title to revert to the foreclosing governmental unit if, within five years after the sale, the property were transferred to the person who owned it when the foreclosure judgment was entered.

The League supports the concept behind the bill, and we are working with the sponsor’s office to ensure the process is workable.  The legislation now goes to the full Senate for approval.

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