Supreme Court’s rejection of ‘Dark Stores’ appeal is recognition of problems in property tax system

Taxes-erased-xThe refusal by the Michigan Supreme Court to accept the appeal of a property tax case by the Big Box retailer Menard’s is recognition of the problems created by the “Dark Stores” theory of property valuation, the Michigan Association of Counties (MAC) said today in reaction to the court’s order.

In May 2016, a unanimous panel of the Michigan Court of Appeals, in Menard, Inc. vs. City of Escanaba, expressly rejected the Tax Tribunal’s reliance on the “Dark Stores” method. Not only did the court find that the Tax Tribunal made a mistake of law, it also found that the tribunal didn’t properly perform its duty in evaluating evidence for determining value.

MAC’s Stephan Currie speaks with Frank Beckmann about Dark Stores issue.

The Supreme Court’s decision means the Court of Appeals ruling stands as precedent and must be followed. That court had ordered the Tax Tribunal to again review the case, taking additional evidence on proper valuation in doing so.

“This is a most promising development,” said Stephan Currie, MAC’s executive director. “The Tax Tribunal has to return to this matter and operate under the orders given by the Court of Appeals to properly assess the value of commercial property.” In this particular case, the tribunal had ruled the Menard property was worth 60 percent less than what Escanaba had determined via standard valuation practices.

MAC was one of several organizations filing amicus briefs in support of the city of Escanaba’s position in the case.

Under the Dark Stores method, the Tax Tribunal has reduced so many valuations of Big Box properties that local revenues to provide public services have been reduced by at least $100 million since 2013. This process is shifting more of the burden onto homeowners to fund the basic public services all Michigan communities and businesses utilize each day.

For more information on MAC, visit www.micounties.org.

Bierlein becomes MAC’s 110th president; 3 newcomers elected to MAC Board

Tuscola County's Matthew Bierlein is sworn in by Judge Amy Gierhart as his wife, Mindy, and children look on. (Rod Sanford Photography)

Tuscola County’s Matthew Bierlein is sworn in by Judge Amy Gierhart as his wife, Mindy, and children look on. (Rod Sanford Photography)

The Michigan Association of Counties (MAC) elected board officers for its 2017-18 term and added two new board members at the MAC Annual Conference, held Sept. 24-26 at the Grand Hotel on Mackinac Island.

Matthew Bierlein, a Tuscola County commissioner, was sworn in as MAC’s 110th president since the organization’s founding on Feb. 1, 1898. During his first address as president to the association, Bierlein called for greater engagement with all of Michigan’s 622 county commissioners.

Joining Bierlein on the board’s executive team are: First Vice President Ken Borton, an Otsego County commissioner; Second Vice President Veronica Klinefelt of Macomb County; and Immediate Past President Shelley Taub, an Oakland County commissioner.

“Our new leadership team brings a great variety of skills and experiences to our board,” said Stephan W. Currie, MAC’s executive director. “We have a great team in place as we begin to implement our strategic plan adopted by the board at the Annual Conference.”

In board elections held at the conference, MAC members in attendance elected three new board members:

  • Joe Bonovetz of Gogebic County
  • Richard Schmidt of Manistee County
  • Jim Storey of Allegan County

Also serving as directors on the board for the 2017-18 term are:

  • Donald Disselkoen (Ottawa County)
  • Philip Kuyers (Ottawa County)
  • Christian Marcus (Antrim County)
  • Joseph Palamara (Wayne County)
  • Robert Showers (Clinton County)
  • Joe Stevens (Dickinson County)
  • Hugh Crawford (Oakland County)
  • Vaughn Begick (Bay County)
  • Stan Ponstein (Kent County)

For more information on MAC, visit www.micounties.org.

MAC’s Currie named Strategic Association Leader by Michigan Society of Association Executives

Stephan Currie addresses the audience at the 16th MSAE Diamond Awards after accepting his honor as Strategic Association Leader for 2017.

Stephan Currie addresses the audience at the 16th MSAE Diamond Awards after accepting his honor as Strategic Association Leader for 2017.

Stephan W. Currie, executive director of the Michigan Association of Counties, was honored Sept. 14 as the 2017 Strategic Association Leader by the Michigan Society of Association Executives (MSAE).

Currie received the honor during the 16th annual MSAE Diamond Awards at The Henry Hotel in Dearborn. The award is presented to an association leader who, in MSAE’s words, “has demonstrated the ability and commitment to going beyond the expected standards of service and professionalism. The award reflects outstanding leadership and achievement in association management. Strategic association leaders serve MSAE and encourage their staff to participate in the association community; contribute to other voluntary membership organizations; and participate in various civic and community affairs.”

In a letter in support of Currie’s nomination, Wayne County Executive Warren Evans noted, “Mr. Currie and his team at the Michigan Association of Counties provided invaluable expertise and support as we sought to reinvent our purchasing process. Our new state-of-the-art system is expected to save our taxpayers millions of dollars while making it easier for qualified contractors to do business with Wayne County.”

In his acceptance speech, Currie said, “I was shocked, and humbled, to learn I had been nominated and then honored. This award reflects the hard work and commitment of the entire MAC team.

Currie became MAC’s fourth executive director since 1968 on Jan. 1, 2017.

MAC urges commissioners to call senators on property tax amendment

veteran image 10-20-14MAC urges county commissioners to call their state senators this morning (Sept. 19) and ask them to support the Casperson amendment to Senate Bill 45, a veterans property tax exemption. This amendment would not diminish existing or future property tax exemption benefits to disabled veterans, but would require the state to reimburse local units for the lost revenue associated with the property tax exemption.
In this way, the state has ownership in the tax exemption policy they enact.
For more information on this issue, contact Deena Bosworth, bosworth@micounties.org or 517-372-5374.

General Fund trends have state in jam, Bosworth tells Bloomberg News

Deena Bosworth, director of governmental affairs

Deena Bosworth, director of governmental affairs

State leaders have put Michigan, county leaders and themselves in a difficult position after years of failing to invest resources in local services, MAC’s Deena Bosworth told a Bloomberg News reporter this week.

In a story detailing the coming crunch on Michigan’s General Fund, Bosworth said, “You can cut services, you can say you’re no longer going to have a court system, foster care. But there’s really not a lot more you can do without more revenue.’’

Bosworth was speaking in the context of the limitations in Proposal A and Headlee that have made it virtually impossible for counties to recover the property revenue crash of the Great Recession, even as Michigan property values are recovering.

“We’re running at 60 percent of what tax revenues were 10 years ago,’’ Bosworth said, referring to the inflation-adjusted revenue figures for a typical county in Michigan.

To read the entire piece, reproduced with permission from Daily Tax Report (Copyright 2017 by The Bureau of National Affairs, http://www.bna.com), click here.

Pension-OPEB report shows need for state to adopt tailored, long-term approach to complex liability issues

Steve Currie

Steve Currie

Michigan needs to tailor long-term solutions to the specific circumstances of local governments struggling to cover pension and OPEB liabilities said the Michigan Association of Counties in response to the new report of a gubernatorial task force.

Gov. Rick Snyder’s Task Force on Responsible Retirement Reform for Local Government met over the winter and spring to study unfunded liabilities exceeding $14 billion for pensions, health and other benefits for employees. The group’s report properly notes that:

  • “As local units across the state are unique and at different stages in dealing with this problem, there is not a one-size-fits-all solution – we must be flexible in our approach.” (page 3)
  • “Attention should focus on the local units experiencing the greatest fiscal stress as it relates to pension and OPEB liabilities.” (page 3)

“It’s important for legislators and citizens to understand that there’s no overnight fix to this issue,” said Stephan W. Currie, MAC’s executive director.

Currie, who served on the 23-member panel, added, “A ‘one-size-for-all’ approach will not work for everyone, which the report rightly highlights. For example, most of our 83 county members either are in solid shape in setting aside money for these commitments or did not extend them in the first place. We need to start with a system that identifies the governments struggling with legacy costs, as is urged in the report.

“MAC is appreciative of the opportunity to participate with a diverse group of stakeholders and looks forward to working with the governor, legislators and others in the ongoing pursuit of stable funding.”

The full report and additional details are available at the governor’s website.

For more information on the Michigan Association of Counties, visit www.micounties.org.

Otsego’s Borton returns from County Leadership Institute with focus on building consensus

Otsego County's Ken Borton is congratulated on his completion of the County Leadership Institute by NACo Executive Director Matt Chase and NACo Director of Strategic Relations Linda Langston. (NACo photo)

Otsego County’s Ken Borton is congratulated on his completion of the County Leadership Institute by NACo Executive Director Matt Chase and NACo Director of Strategic Relations Linda Langston. (NACo photo)

Otsego County Board Chair Ken Borton, also MAC’s second vice president, “graduated” in June from the County Leadership Institute (CLI) put on by the National Association of Counties (NACo). With the “rigorous four-day program offered in partnership with Cambridge Leadership Associates, NACo aims to enhance the capability of county officials to identify and implement innovative solutions to complex challenges facing county government. Attendees learn how to effectively address the demands of personal leadership in a new era of government. This era is characterized as a “permanent crisis” by CLI Program Developer and Cambridge Leadership co-founder Marty Linsky.”

MAC News asked Borton what lessons he drew from the training:

  1.  I learned how to better run a meeting including how to allow constructive engagement of people with opposing viewpoints. This will make for better input on issues prior to making any decisions. They used a great analogy: If you want to make great stew, you can’t just put in one or two of your favorite ingredients and expect it to turn out right. You have to put in a lot of ingredients, including some you may not think you like. Then you have to apply just the right amount of heat in order to make it meld together. On the other hand, if you have all the correct ingredients and apply too much heat, you will just boil over. If you apply too little heat, you will wind up with mush. For me, I found out that I always try to turn down the heat at meetings by using humor. I have a feeling with a little more heat my meetings will be much more productive.
  1. One of the great things about the program was that I made connections with commissioners from all of the country. There are many issues faced by all counties, regardless of which state they are in. It’s an invaluable resource to have these contacts to learn from.
  1. The training left me highly motivated to work with my fellow community leaders to help create a community-wide vision for social and economic growth.

For more information on CLI, visit NACo’s website.

MAC joins call for state attention to infrastructure crisis

roads image mliveMAC joined with a broad coalition of government and business groups at a May 30 event to highlight the ongoing, and worsening, crisis in Michigan’s physical infrastructure.

“Sound infrastructure is vital for economic growth. The drivers of our economy: manufacturing, agriculture and tourism depend on it,” said Andy Johnston, vice president of government affairs for the Grand Rapids Area Chamber of Commerce. “Infrastructure must be a data-driven discussion, and the data is clear. The Legislature needs to keep the funding promises made in 2015 for roads and begin laying the foundation to address other vital infrastructure systems.”

MAC’s Transportation Platform calls for “the logical development, interconnection and sustained maintenance of all transportation designs and infrastructures within our state.”

For more on the issue, see the press release, or visit fixmistate.org.

First 4 standards for indigent defense approved; 180-day compliance clock started

indigent defenseThe first standards from the state’s Indigent Defense Commission (MIDC) were approved late Monday (May 22) by the Department of Licensing and Regulatory Affairs. This decision now begins a 180-day clock for counties to submit their compliance plans for these four particular standards:

  • Education and training
  • Initial client interviews
  • Experts and investigators
  • Presence of counsel in front of a judge

Remember, once a compliance plan has been approved, counties still do not have to comply with the standards (if they are not already complying) until state funding for those measures has been appropriated. After receipt of the funds, counties will have another 180 days to implement the changes.

Additional information can be found on the MIDC website. The complete text of the order is here.

If you have questions, contact Elizabeth Gorz, gorz@micounties.org or 248-330-2288.

MAC praises Rep. VerHeulen for leading effort to resolve court funding questions

federal courtoom detroitLegislation filed today by Rep. Rob VerHeulen (R-Kent) that would keep funding for local trial courts stable and create a special commission to study best practices is an important move toward permanent reform, the Michigan Association of Counties (MAC) said today.

MAC, representing Michigan’s 83 counties, which have responsibility for local trial courts, has been working diligently with legislators and other stakeholders on an improved court funding model since a 2014 Michigan Supreme Court ruling through the traditional funding system into disarray.

In People v. Cunningham in June 2014, the court ruled a lack of statutory authority invalidated the use of fees routinely imposed on convicted defendants. That meant local courts were looking at operating fund losses in the tens of millions of dollars. MAC helped lead a coalition of stakeholders to draft legislation to restore the fee authority, which became law in fall 2014. That fee authority, though, expires this October.

Rep. VerHeulen’s bills, House Bills 4612 and 4613, would again extend the fee authority, this time to Oct. 17, 2020, plus direct the formation of a commission to analyze court funding models and make a recommendation to the Legislature for action. The bills were assigned to the House Appropriations Committee.

“This is a difficult issue, so we are thankful Rep. VerHeulen is, first, ensuring stable operations for our trial courts and, second, putting together a process to enact a better, permanent funding system,” said Deena Bosworth, MAC’s director of governmental affairs. “Since the proverbial clock is ticking, it’s vital for the Legislature to review and advance this legislation to Gov. Snyder’s desk by September.”

For more information on the Michigan Association of Counties, visit www.micounties.org.