Liquor tax funding change means $25 million boost to counties

A two-bill package designed to extend the capture of liquor tax revenue that counties use for substance abuse programs passed during the last days of the legislative session this week and will soon mean a $25 million boost to counties.

Senate Bills 1222-23, by Sen Wayne Schmidt (R-Grand Traverse), amend the State Convention Facilities Authority Act to extend the sunset on the capture of liquor tax revenue for improvements to the convention facility in Detroit and therefore extend the sunset on the collection of liquor tax revenue for counties.

The issues were tied together when the act was created. Under current law, the collection and allocation of the liquor tax revenue expires once the bonds for the convention facility are paid off. Due to recent increases in liquor tax revenue, those bonds are scheduled to be paid off 13 years early, which would eliminate the future collection of revenue and deplete the allocation to counties. This two-bill package does not extend the 2039 deadline for the bonds to be paid off, but it does allow the facility authority to issue additional bonds for improvements.  

MAC has been working with representatives from the authority to address our need to have counties’ annual allocation reflective of the collection of the liquor tax revenue. Current law states counties receive an increase in their allocation based on a percentage above the previous year’s allocation, not on a percentage of the total tax collected. The excess tax collected is instead allocated to the reduction of the bond debt of the authority. (Again, due to the increase in liquor tax revenue, those bonds are scheduled to be paid off early.)

By allowing the authority to issue additional debt for improvements, the bills do something significant for counties. Beginning in 2023, the baseline allocation in liquor tax dollars for counties will increase by approximately 48 percent — or $25 million. (See county-by-county estimates.) The annual increase will remain the same as current law of 1 percent additional each year, but the baseline will be reset every three years to reflect the increase in revenue from the liquor tax.

Also, current law states 50 percent of the liquor tax revenue received by counties must be allocated to substance abuse programs. SBs 1222-23 will change that requirement to 40 percent (though no less than the amount allocated in FY22). In short, this will be a significant increase in funds toward substance abuse programs and an increase in the amount counties can allocate to their general funds. 

The bills are now headed to the governor for her expected signature.

For more information on this issue, contact Deena Bosworth at bosworth@micounties.org.

Big increase for counties from liquor tax advances from Senate

A two-bill package designed to extend the capture of liquor tax revenue that counties use for substance abuse programs passed the Senate this week. Senate Bills 1222-23, by Sen. Wayne Schmidt (R-Grand Traverse), would amend the State Convention Facilities Authority Act to extend the sunset on the capture of liquor tax revenue for improvements to the convention facility in Detroit and therefore extend the sunset on the collection of liquor tax revenue for counties.

The issues were tied together when the act was created. Under current law, the collection and allocation of the liquor tax revenue expires once the bonds for the convention facility are paid off. Due to recent increases in liquor tax revenue, those bonds are scheduled to be paid off 13 years early, which would eliminate the future collection of revenue and deplete the allocation to counties. This two-bill package does not extend the 2039 deadline for the bonds to be paid off, but it does allow the facility authority to issue additional bonds for improvements.  

MAC has been working with representatives from the authority to address our need to have counties’ annual allocation reflective of the collection of the liquor tax revenue. Current law states counties receive an increase in their allocation based on a percentage above the previous year’s allocation, not on a percentage of the total tax collected. The excess tax collected is instead allocated to the reduction of the bond debt of the authority. (Again, due to the increase in liquor tax revenue, those bonds are scheduled to be paid off early.)

By allowing the authority to issue additional debt for improvements, the bills do something significant for counties. Beginning in 2023, the baseline allocation in liquor tax dollars for counties will increase by approximately 48 percent. The annual increase will remain the same as current law of 1 percent additional each year, but the baseline will be reset every three years to reflect the increase in revenue from the liquor tax.

Also, current law states 50 percent of the liquor tax revenue received by counties must be allocated to substance abuse programs. SBs 1222-23 will change that requirement to 40 percent (though no less than the amount allocated in FY22). In short, this will be a significant increase in funds toward substance abuse programs and an increase in the amount counties can allocate to their general funds. 

The bills received bipartisan support in the Senate and now move to the House for consideration next week.

For more information on this issue, contact Deena Bosworth at bosworth@micounties.org.

Mental health privatization fails in Senate, but threat still looms

Legislation to privatize control of local mental health services, opposed by MAC, was defeated Tuesday in a surprise vote in the Senate.

Senate Bills 597 and 598, by Sens. Mike Shirkey (R-Jackson) and John Bizon (R-Calhoun), were rejected by votes of 15-17 and 15-19, respectively.

These bills would have shifted financial administration of Medicaid mental health services to private Medicaid health plans, taking away public accountability and local governance and replacing it with for-profit private insurance companies.

However, there is still potential for a deal that would insert the language from SBs 597-598 into an already introduced House bill, keeping the possibility of mental health privatization at play in the current lame duck session.

MAC opposes any attempt to shift toward privatization of our local public mental health system, and we urge members to contact their legislators to share their opposition as well.

For more information on this issue, contact Samantha Gibson at gibson@micounties.org.

 

Expect toolkits and more in 2023 on opioid settlement resources

As anticipation for opioid settlement dollars increases, there are numerous resources that counties can expect to see to support the decision-making processes associated with spending. Early in 2023, counties can expect to see documents released from three different groups to assist.

The first to expect will be the “Michigan Opioid Settlement Funds Toolkit: A Guide for Local Spending,” released by MAC in collaboration with Vital Strategies. This toolkit will provide an overview of the settlements, data on the scope of the overdose crisis and information on accessing local data, plus principles, strategies and recommended steps for spending.

The Center for Health and Research Transformation, based in Ann Arbor, will release resources for local governments related to the potential areas for spending with additional information provided regarding the evidence to support specific strategies. This work will provide more details to aid in spending plan development.

The Opioid Advisory Commission is also expected to release a report outlining recommendations for which strategies to fund. While these documents are expected in early 2023, there are numerous other resources that exist, and additional reports and resources will become available in the future.

To view current resources, visit MAC’s Opioid Settlement Resource Center.

For more information on this issue, contact Amy Dolinky at dolinky@micounties.org. 

 

Election winners crowd into New Commissioner School sessions

Executive Director Stephan Currie addresses NCS audience in Frankenmuth on Nov. 28.

More than 130 newly elected commissioners, returning commissioners and administrators gathered in Saginaw and Barry counties this week for the first two of four in-person New Commissioner School settings.

MAC Executive Director Stephan Currie welcomed attendees to both locations, explaining how MAC would be their partner on their “journey” into county public service. Currie also led a group discussion at each site, inviting veteran commissioners in attendance, such as Michael Webster of Saginaw County, to share personal experiences from their initial weeks and months on county boards. MAC Board directors, such as Vaughn Begick of Bay County and Second Vice President Jim Storey of Allegan County, also provided perspectives for the commissioners-elect.

Deena Bosworth, director of governmental affairs, briefed attendees on MAC’s advocacy work and on the sea change coming to the State Capitol via the Democratic victories in the November 2022 General Election.

On-site sessions of the New Commissioner School, a 50-year partnership of MAC and MSU Extension, continue in December in Marquette County (Dec. 5) and Roscommon County (Dec. 12).

Vaughn Begick of Bay County speaks with attendees at the NCS site in Frankenmuth.

Deena Bosworth discusses MAC policy development at Barry County site on Nov. 29.

 

Trio of county officials graduates from NACo Leadership Academy

MAC would like to acknowledge and congratulate the August 2022 NACo Leadership Academy graduates from Michigan. They join more than 5,000 graduates and current participants from across the country benefitting from the 12-week online program enabling existing and emerging county leaders to achieve their highest potential:

• Darcy Weaver, human resources director, Leelanau County
• Jenifer Boyer, emergency management coordinator, Midland County
• Michael Andrews, policy and fiscal analysis supervisor, Oakland County

The January 2023 cohort for the Leadership Academy is just around the corner. Prioritize leadership development for your team today and deliver results for your team and County. Scholarships are available. 

CLICK HERE TO LEARN MORE AND ENROLL

 

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U.S. Treasury issues final rule for State & Local Fiscal Recovery Funds Program

On Thursday, the U.S. Department of the Treasury issued the Final Rule for the State and Local Fiscal Recovery Funds (SLFRF) program, enacted as a part of the American Rescue Plan, which delivers $350 billion to state, local, and Tribal governments to support their response to and recovery from the COVID-19 pandemic.

Click here to view the final rule text. Click here to view a user-friendly overview of the major provisions of the final rule.

Treasury hosting webinars to review the rule and field questions from local officials. Click on the date to register:

• Jan. 10 at 4 p.m. EST
• Jan. 12 at 1 p.m. EST

There are capacity limits for these sessions, but Treasury will record them and post for later viewing.

To date, Treasury has distributed more than $245 billion to state, local, and Tribal governments as a part of the SLFRF program. Recipients of funds were encouraged to begin using funds under the interim final rule, which was released in May 2021. A recent analysis by the Center on Budget and Policy Priorities found that state governments have appropriated nearly 70 percent of their available funds as of November 2021.

The final rule, which takes effect on April 1, 2022, provides state and local governments with increased flexibility to pursue a wider range of uses, as well as greater simplicity so governments can focus on responding to the crisis in their communities and maximizing the impact of their funds.
 
The final rule provides additional clarity and flexibility for recipient governments, including:

• First, Treasury has expanded the non-exhaustive list of uses that recipients can use to respond to COVID-19 and its economic impacts — ensuring states and localities can adapt quickly and nimbly to changing public health and economic needs. This includes clarifying that recipients can use funds for certain capital expenditures to respond to public health and economic impacts and making services like childcare, early education, addressing learning loss, and affordable housing development available to all communities impacted by the pandemic.
• Second, Treasury has expanded support for public sector hiring and capacity, which is critical for the economic recovery and in maintaining vital public services for communities.
• Third, Treasury has streamlined options to provide premium pay for essential workers, who bear the greatest health risks because of their service in critical sectors.
• Fourth, Treasury has broadened eligible water, sewer, and broadband infrastructure projects — understanding the unique challenges facing each state and locality in delivering clean water and high-speed broadband to their communities.
• In addition to these expansions, Treasury has greatly simplified the program for small localities — many of whom have received a historic federal investment in their communities through this program – including through the option to elect a standard allowance for revenue loss rather than calculating revenue loss through the full formula.

For more information, visit Treasury’s SLRF page.

House passes bills for 4-year terms; historic change headed to governor

The largest change affecting county commissioners since 1968 is headed to Gov. Gretchen Whitmer’s desk after the House of Representatives approved this week two bills to adopt four-year terms for commissioners.

Whitmer is expected to sign Senate Bill 242, by Sen. Ed McBroom (R-Dickinson), and SB 245, by Sen. Jeremy Moss (D-Oakland), which cleared the House this week on 75-29 votes. The legislation would start four-year terms with the 2024 election cycle.

“Deena (Bosworth) and I have been at MAC for 10 years and this has been at the top of the MAC to-do list every day,” said Executive Director Stephan Currie. “This is such an exciting victory after so many years of work in the halls of the Capitol. All credit goes to Deena and Meghann; Board Director Jim Storey for his consistent advocacy and testimony before committees; and, most importantly, our members who kept reminding legislators of the need for this change.”

Since 1968, voters in Michigan have elected county commissioners to two-year terms from geographic districts. Michigan has been one of only five states that has required two-year terms for all commissioners, even though all other elected county offices have four-year terms.

“This is just one of those moments you hope to have in your career in public advocacy,” said Bosworth. “I want to thank the bill sponsors, Sens. McBroom and Moss, and all of the county boards who passed resolutions in support of our effort. The power of MAC is in our members and that fact shone through this year on this issue.”

For more information on this issue, contact Deena Bosworth at bosworth@micounties.org.

Veteran Property Tax Exemption reimbursement bills introduced

This week, Sen. Bumstead (R-Newaygo) introduced a two-bill package that would provide relief to local governments by reimbursing them for their loss of property tax revenue due to the 2013 legislation granting disabled veterans a property tax exemption. Senate Bill 783 and Senate Bill 784, co-sponsored by 11 other senators from both sides of the aisle would turn the property tax exemption into a refundable income tax credit payable to the local tax collecting unit.

The legislation would still require the veteran to file an affidavit with the local tax collecting unit, the only difference is that the form will change slightly, allowing the local unit to submit for the refundable credit to cover the deferred property taxes.  Upon a payment by the state, the local unit will then be required to provide written notification to the individual who filed the affidavit explaining the payment or rejection by the state. 

This approach would not disrupt the current process veterans go through to get the exemption, it simply requires the local unit to defer property tax collection until the Department of Treasury dispenses the payment for reimbursement.  All 100% disabled veterans, and the widowed spouses of a 100% disabled veteran, that previously claimed the veteran property tax exemption prior to January 1, 2023 are still eligible for the same benefits under the new income tax credit that goes into effect on January 1, 2023.

For more information on this issue, contact Deena Bosworth at bosworth@micounties.org.

Updated: Rules for open meetings revert to old form on Jan. 1

Public meetings in Michigan governed by the state’s Open Meetings Act (OMA) will revert to pre-COVID rules on Jan. 1, 2022. This means that commissioners cannot participate in a county board session as a voting member via electronic means, with only one narrow exception.

As detailed in a new memo from the law firm of Cohl, Stoker & Toskey, P.C., the permissive rules for remote participation granted under Public Act 254 of 2020 expire at the end of 2021. At that point, the only way a commissioner can participate remotely as a voting member is if the member must be physically absent due to military duty.

Boards, of course, can continue to livestream their public sessions. And commissioners who cannot be physically present can utilize remote means to listen to the meeting, but they cannot participate or vote as part of the board.

The memo reminds county boards to ensure their board rules, procedures and by-laws are modified to be consistent with the Open Meetings Act.

House Bill 5467, introduced by Rep. Phil Green (R-Tuscola), would allow for some members of the public body to participate remotely where there is otherwise a quorum physically present at the in-person meeting.

However the language as currently proposed expressly prohibits the remote participant from voting, which is inconsistent with the intent to return to the previous system whereby a remote participant could vote so long as there was a quorum physically present.

MAC has expressed our interest to the bill sponsor in getting the legislation to return to the old “pre-covid” system whereby a member for any reason could participate remotely, including voting, where a quorum was physically present.  While there may be opportunity to revert to allow this type of meeting option, it will not be possible to complete necessary statutory changes prior to year-end.

For more information or questions, please contact Meghann Keit-Corrion at keit@micounties.org.

Healthcare spending bill in House Appropriations Committee 

Another supplemental proposal was offered this week to the House Appropriations Committee – this time related to healthcare spending. House Bill 5523, introduced by Rep. Julie Calley (R-Ionia), appropriates $1.2 billion toward efforts addressing health care recruitment and retention, as well as funding COVID testing in schools and supporting monoclonal antibody sites. The funds are all from federal dollars, with $400M from the state allocation through the American Rescue Plan Act.

Specifically, the proposal includes:

– $667 million would be allotted overall for COVID testing, of which $300 million directed to purchase COVID-19 tests= for schools

– $300 million to a Healthcare Recruitment and Retention Reserve Fund, of which $150.0 million would be available and the remaining $150.0 million is not available to be expended until funds are approved through the legislative transfer process.

– $50 million to establish COVID-19 early treatment sites.

– $25 million to purchase additional monoclonal treatment, in addition to federally allocated supply

–  $10 million in a competitive grant program for nursing facilities to convert multi-resident rooms into single resident rooms. Grant awards would reimburse 50% of the cost.

A full list of details can be found here. The bill hailed praise from the healthcare sector, but with few remaining session days, the bill will likely not pass prior to the end of the legislative year.

For more information or questions, please contact Meghann Keit-Corrion at keit@micounties.org.

MAC opposes public record fee bills

A bill to limit the fees paid for property records passed out of committee this week and is on the House floor. HB 4730, sponsored by Rep. Julie Calley (R-Ionia), would limit the revenue county treasurers collect for the dissemination of records for parcels of property. The bill was originally introduced as part of a package that would have carried the same limitations on fees for other county electronic records, but has since been scaled back to just fees charged by treasurers. 

 

Currently, a county treasurer can charge 25 cents per parcel record, which is not easily separated from the entirety of the parcel records, so it comes in a batch. The bill on the other hand, would state that the qualified data file would have to include at least four of the required fields instead of having to include all of them in the records for each parcel of property. In other words, it limits how much they can charge for parcel records. Zillow is the primary advocate for this bill, seeking less costly access to the records that the treasurers compile, record, keep and update. 

 

MAC continues to work with other organizations representing county-wide elected officials effected by this legislation and is currently opposed along with the Michigan Association of Registers of Deeds and the Michigan Association of County Treasurers. 

 

For more information on this issue, contact Deena Bosworth at bosworth@micounties.org.

The Michigan Department of Treasury announces the next Chart Chat webinar 

The Michigan Department of Treasury is pleased to announce our next Chart Chat webinar at 2 p.m. on Thursday, December 16, 2021.

The Chart Chat Webinar Series provides updates to local government officials on accounting-related topics, updates from the Michigan Department of Treasury and information on sound fiscal management.

This Chart Chat webinar will cover:

• Requirements for Accepting Federal Funds
• Fiscal Indicators – A Recap of All Four and How They Work Together
• First Responders Grant Program

To register, please visit:

https://us06web.zoom.us/webinar/register/WN_5a_ki0onSvWK9R1_MI-umQ

We are currently accepting submissions for the questions and answers portion of the webinar. To submit a question, please email LAFD_Audits@Michigan.gov.

Correction: Michigan’s 83 counties will have 619 commissioners in 2023

Michigan’s 83 county governments will be led by 619 elected county commissioners after the 2022 elections, following decisions this fall by the county apportionment boards. The Nov. 19 Legislative Update had incorrect figures for Oceana County, which changed the total.

The new total is a decrease of 3 commissioners from the current roster of 622 commissioners established after the last census and apportionment process.

Eight counties increased the size of their boards for 2023. The biggest boost was 2 seats, done in 5 counties, including Kent County, which, at 21, will have the largest board in the state on Jan. 1, 2023.

Seven counties reduced the size of their boards, with the largest reduction in Antrim, which is going from 9 districts to 5. Oakland County, which currently has the state’s largest board at 21, reduced its board ranks to 19 for 2023. See full corrected list here.

MDHHS expands Opioid Health Home services to additional counties

The Michigan Department of Health and Human Services (MDHHS) has expanded the Opioid Health Home (OHH) initiative to more Michigan counties to provide intensive care management and care coordination services for Medicaid beneficiaries with an opioid use disorder (OUD), a move applauded by MAC this week.

“The U.S. Centers for Medicare & Medicaid Services (CMS) recently approved Michigan’s State Plan Amendment (SPA) to expand its Opioid Health Home initiative into PIHP Regions 6, 7 and 10. The expanded SPA will allow thousands of Medicaid beneficiaries meeting the eligibility criteria to receive OHH services,” MDHHS reported.

A Health Home is a benefit awarded to Medicaid beneficiaries who have a diagnosed with an Opioid Use Disorder and reside within one of the following Prepaid Inpatient Health Plan (PIHP) regions/counties:

• PIHP Region 1 (counties in the Upper Peninsula)
• PIHP Region 2 (21 northern-most counties of the Lower Peninsula)
• PIHP Region 4 (specifically Calhoun and Kalamazoo Counties)
• PIHP Region 6 (Lenawee, Livingston, Monroe, Washtenaw)
• PIHP Region 7 (Wayne)
• PIHP Region 9 (Macomb County)
• PIHP Region 10 (Genesee, Lapeer, Sanilac, St. Clair)

“Individuals who meet the criteria are able to work with a team of providers who will attend to a beneficiary’s complete health and social needs. Participation is voluntary and enrolled beneficiaries may opt out at any time.”

“MAC supports additional and expanded services of this program, which has been extremely successful in many counties so far,” said Governmental Affairs Associate Meghann Keit-Corrion.

For OHH-specific information, including eligibility and available resources, visit Michigan.gov/OHH. 

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Supreme Court hands state a win over locals in Headlee case

In a blow to local governments, the Michigan Supreme Court sided with the state in a constitutional argument over what dollars should count toward the state’s mandated share of revenue spent on local governments. The ruling, in the case of Taxpayers for Michigan Constitutional Government v State of Michigan, found that post-Proposal A school funding from the state can be counted toward the state’s minimum Headlee Amendment payment to local governments.

This refers to Section 30 of the Headlee Amendment adopted by the voters in 1978:

“Section 30 provides that the proportion of state spending devoted to local governments shall not be less than the proportion in effect in FY 1978-79, the year in which the Headlee amendment passed,” explains this 2017 report from Public Sector Consultants. “That year, local aid as a share of state spending was 41.6 percent; some years later, in the aftermath of a suit brought by Oakland County, the local share was recalculated and set at 48.97 percent.”

Plaintiffs in the case had argued the state has miscalculated the payments owed by including the amount it pays school districts, which were primarily locally funded prior to Proposal A. This shift to state payments altered the formula and therefore lessened the required payments to local governments. However, the court rejected that argument.

The decision did leave one small portion of the case still open: the amount of money that is sent to public school academies. This issue has been sent back to the Michigan Court of Appeals for consideration.

For more information on this issue, contact Deena Bosworth at bosworth@micounties.org.