State has $14.26 billion to use for FY25 General Fund

Michigan’s legislators will have $236 million more available for the fiscal 2025 General Fund budget than was expected in January.

In its final session before the Legislature completes its 2025 budget work, the Consensus Revenue Estimating Conference (CREC) concluded there will be a net amount of $14.26 billion to spend for the General Fund, state spending plan that covers many county-related functions.

This figure is up $235.6 million from the CREC projection from January 2024.

These conferences are required by statute to determine the state of Michigan’s financial resources as lawmakers draft annual budgets.

“With Michigan’s revenue outlook appearing to be stable if not growing slightly, we hope to see the manifestation of growth to continue to benefit not just the state, and infrastructure, but with counties as well through revenue sharing,” said MAC’s Deena Bosworth.

Notable information from the May 17 presentation on Michigan’s economy and budget:

• The state would enter FY25 with a “rainy day” reserve fund of $2.1 billion, after substantial growth in interest earnings. As recently as FY19, the reserve fund held only $1.15 billion.
• CREC continues to show the state falling further below the revenue limit imposed by the Headlee Amendment, which was adopted in the 1970s. For the next two fiscal years, the state could raise an additional $12 billion ― essentially a second state General Fund ― and still comply with Headlee’s restrictions.
• The housing affordability outlook is not good, but, conversely, that is positive news for businesses involved in home construction that are trying to fill unmet demand.
• Michigan employment is above pre-pandemic levels.
• Inflation in Michigan is “turning slowly,” with housing the major issue there.

For more information on MAC’s budget advocacy, contact Deena Bosworth at bosworth@micounties.org.

Policy Summit will focus on financial issues with opioids, roads, jails

The 2024 MAC Policy Summit on June 25 will feature briefings on Medicaid jail policies, the latest news on using opioid settlement dollars, a potentially massive shift in how Michigan funds its roads and an overview of counties’ long-term fiscal health.

Registration is now open for the session, with a $75 fee covering either the virtual option or attendance in-person at the AC Hotel Lansing just off U.S. 127 in the capital city.

CLICK HERE TO REGISTER.

The event is designed to allow county leaders to get to and from Lansing in a reasonable schedule. However, MAC has secured a room block at the AC Hotel (3160 E. Michigan Ave., Lansing) for $149 per night.

Agenda

9 a.m. – 9:40 a.m.: Registration and Continental Breakfast

9:40 a.m. – 10:40 a.m.: Medicaid Inmate Exclusion Policy and the Medicaid Section 1115 Waiver

• Presenters: Robert Sheehan, CEO, Community Mental Health Association of Michigan, and Samantha Gibson, governmental affairs associate, MAC

10:45 a.m. – 11:45 a.m.: Opioid Settlement Funds: Year in Review

• Presenter: Amy Dolinky, technical adviser, opioid settlement funds planning and capacity building, MAC

11:45 a.m. – 12:30 p.m.: Lunch

12:30 p.m. – 1:30 p.m.: Why and How to Conduct a Road Usage Charge Pilot in Michigan

• Presenter: Baruch Feigenbaum, senior managing director of transportation policy, Reason Foundation

1:30 p.m. – 2:30 p.m.: Beyond the Numbers: Assessing the Resilience of Michigan County Governments’ Finances

• Presenter: Stephanie Leiser, lead, Michigan Local Government Fiscal Health Project at the Center for Local, State, and Urban Policy

For more details on the presentations, the hotel and parking tips, visit MAC’s events page.

Participants in the summit will earn 1 credit hour toward certification in MAC’s County Commissioner Academy.

 

Legislator remarks, energy law featured in new MAC videos

The Legislative Panel was held on May 1 at the 2024 Legislative Conference. (Rod Sanford Photography)

MAC has added new videos to its YouTube playlist from the 2024 Michigan Counties Legislative Conference in Lansing, April 29-May 1:

• Energy Siting Law Workshop (April 30) led by Sarah Mills of the University of Michigan

• Basics of Public Act 233
• What’s a county to do under the act?
• Pros and cons of available options

• Legislative Panel held on May 1

• Senate Minority Leader Aric Nesbitt on indigent defense reform
• Comments on public safety funding
• Rep. John Fitzgerald on road funding
• Rep. Graham Filler on partisan dynamics in the House

Presentations and other documents from the conference can be found on MAC’s website.

 

Prospects for huge revenue sharing gain detailed in podcast

Legislators continue to grind on a fiscal 2025 state budget, a document that could yield a massive reform in county revenue sharing, a Podcast 83 team member detailed this week in a new episode.

While the governor, the House and the Senate all have proposed increases in revenue sharing, it’s the Senate approach that is most attractive, said Governmental Affairs Director Deena Bosworth.

Like the House, the Senate is pursuing MAC’s trust fund proposal of carving out a portion of the state sales tax for use in dedicated fund for counties.

“(The Senate) wants to do 9.1 percent of the state sales tax for cities, villages, townships and counties. And they are not doing the public safety percentage (which the House is pursuing),” Bosworth said. “So, Sen. (John) Cherry made the recommendation that we’re going to take a bigger piece of the sales tax, which is a $52.5 million increase. He says whatever your county got in fiscal year 24 is absolutely the minimum. And then that additional $52.5 million that he is recommending for this year is going to get distributed out to counties based on an inverse relationship to their taxable value.”

In other Capitol news:

• Samantha Gibson explained MAC’s opposition to a bill on prisoners earning release credits that could disrupt the state’s “Truth in Sentencing” rules.
• Madeline Fata explained the huge burdens that could fall on county clerks and other local election officials if the current version of the so-called “Michigan Voting Rights Act” legislation were to be adopted.

View the full episode, recorded on May 13, by clicking here.

Previous episodes can be seen at MAC’s YouTube Channel.

And you always can find details about Podcast 83 on the MAC website.

 

Register now for next ‘Chart Chat’ webinar from Michigan Treasury

Registration is open for Treasury’s next “Chart Chat” webinar on Thursday, May 30. The session will run from 2 p.m. to 3 p.m. Eastern.

Click here to register.

The Chart Chat webinar series provides local governments with critical information related to accounting and auditing topics, measuring local government fiscal health, and other important updates from Treasury.

Topics covered in this session will include:

• Corrective Action Plans
• Numbered Letters Update
• Budget Projection Tool
• Uniform Actuarial Assumptions (PA 202 of 2017)
• Headlee Overview

Presentations and recordings from this webinar, along with previous webinars, can be found at TREASURY – BLGSS Learning Center. For support related to Treasury’s local government services, visit the TREASURY – Contact Information.

 

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Prisoner productivity credit bills introduced in Senate

A package to allow certain prisoners to earn productivity credits to reduce their sentence was introduced in the Senate this week.

Senate Bills 861–864 would only apply to future sentences in allowing prisoners to receive productivity credits. Under the legislation, prosecutors would be required to notify victims at the time of sentencing that an earlier release date is possible ― if the offender completes productivity credits.

While completing productivity credits would deem a prisoner eligible for early release, the parole board will still recommendations regarding release dates, with final decisions remaining with judges and prosecutors.

SBs 861-864 would remove truth-in-sentencing, leaving many victims of crime with uncertainty regarding the minimum sentence their offender would serve.

The bills have been referred to the Senate Judiciary Committee.

MAC has joined the Prosecuting Attorneys Association of Michigan and the Michigan Attorney General’s Office in opposing this legislation.

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

FY25 state budget bills, with key trust fund, advance another step

Budget work continued in the Legislature this week with various spending bills gaining approval of each chamber’s full appropriations committee.

Click here to see a review of county spending issues from the April 26 Legislative Update.

A focus of MAC’s budget work right now is enactment of its Revenue Sharing Trust Fund proposal, as each chamber’s appropriators have now endorsed the concept, but with different provisions.

As detailed in this Issue Brief and by Governmental Affairs Director Deena Bosworth at this week’s Legislative Conference, House and Senate appropriations panels want to set up a dedicated trust fund using a portion of state sales tax receipts. The Senate version would secure a larger slice than the House’s, yielding $52 million more for counties in FY25 alone.

To gain the higher amount, MAC is working with legislators to address how the budget handles a separate “public safety fund” pushed by House Democrats.

As budget work accelerates in advance of the Legislature’s June 30 deadline to finish its fiscal work, keep an eye out for MAC Advocacy Alerts so you can add your voice to MAC’s call for maximizing revenue sharing.

For more information on MAC’s budget advocacy, contact Deena Bosworth at bosworth@micounties.org.

Governor signs trial court funding extension 

A key part of funding for trial courts in Michigan is again secure for another 30 months after Gov. Gretchen Whitmer signed House Bill 5392 this week.

Extension of the ability of local judges to impose fees, this time to Dec. 31, 2026, was a MAC priority for the 2024 legislative year.

HB 5392, by Rep. Sarah Lightner (R-Jackson), moved the extension of fee authority from May 1, 2024 to Dec. 31, 2026.

A related measure, House Bill 5534, by Rep. Kelly Breen (D-Oakland), has not yet received a final vote of concurrence in the House. HB 5534 would require the State Court Administrative Office to complete data collection and turn over to the Legislature by May 1, 2026, for advancement towards implementing the 2019 Trial Court Funding Commission recommendations.

MAC supports HB 5534 and long has supported adoption of the funding commission’s recommendations.

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

 

Troubling election bills get Senate hearing

Election bills that would impose sweeping new duties on local governments received a hearing in a Senate committee this week. Known collectively as the “Michigan Voting Rights Act,” Senate Bills 401-404 were introduced to bolster federal law and voting rights in the state for members of a protected class and for disabled electors. While the intent is straightforward, the practical implementation would be complex and could expose locals to frivolous legal challenges.

Local governments will have an incalculable degree of legal liability. SB 401, by Sen. Darin Camilleri (D-Wayne), for example, prohibits a local government from impairing a protected class from participating in elections or the political process, but many of the listed impairments are beyond the control of a local government or conflict with Michigan election law.

The other major bill of concern is SB 403, by Sen. Stephanie Chang (D-Wayne), which mandates local governments must provide language assistance for elections. This includes providing translated signage, forms, ballots and a communication system that offers translation to electors. The local government will have to rely on the Secretary of State’s Office to produce these materials.

MAC opposed the bills when they were first introduced but is still working through the latest amendments. We will be meeting with bill sponsors and various stakeholders in the coming weeks in anticipation of further committee discussion.

For more information on this issue, contact Madeline Fata at fata@micounties.org.

 

Van Buren Commissioner Gail Patterson-Gladney receives her certificate from MAC President Jim Storey. (Rod Sanford Photography)

More than 60 commissioners graduate from MAC academy

MAC’s County Commissioner Academy (CCA) honored its largest graduating class ever during a Plenary session on Tuesday, April 30 at the 2024 Michigan Counties Legislative Conference.

Sixty-six county commissioners earned recognition as “certified” or “advanced.” Commissioners who attended the conference were presented their certificate by MAC President Jim Storey. Those who were unable to attend will be shipped their certificate.

Participants in CCA earn continuing education “hours” by attending designated events and workshops. “Certification” is offered at two different levels: “Certified” is reached at 10 hours, while “Advanced” is reached with 20 hours. In addition to MAC events, credit-qualified presentations also are offered by MSU Extension and the Michigan Department of Treasury.

For a full list of this year’s graduates and more information on the academy, click here.

 

MACSC provides $250 prizes to 2 lucky conference attendees

Commissioner Jeri Strong of Mecosta County and Administrator Katie Zeits of Benzie County were the winners of the MACSC Exhibitor Bingo drawing at the 2024 Legislative Conference on Wednesday, May 1.

Each received $250 after their completed bingo cards were drawn from a bowl by MAC President Jim Storey and Executive Director Stephan Currie.

In the last decade, MAC Service Corp. has issued more than $7,000 in cash prizes to attendees of MAC’s two major conferences each year.

 

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• Michigan Policy Insiders Panel and 88th State of the State Survey (MSU Institute for Public Policy and Social Research)
  
  
• DHS announces $1.8 billion in preparedness grants to advance county security and resilience (NACo News)
  
  
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• Satellite image reveals strange warm spot in Lake Michigan (MLive)

After hiatus, legislators accelerate FY25 budget work

Budget proceedings ramped up in the Legislature this week with a remarkable increase proposed for county revenue sharing.

Both the House and Senate General Government subcommittees used the Revenue Sharing Trust Fund model proposed by MAC as guidance when making their recommendations. The Senate subcommittee was most generous by dedicating 9.1 percent of the first 4 percentage points of the state sales tax for local revenue sharing. This would mean a $52.5 million increase from last year. The House subcommittee recommended 8 percent of the first 4 percentage points of the state sales tax with an increase of $11.9 million.

The House’s proposal reflects the provisions outlined in House Bills 4274-75, which MAC has been advocating for since March 2023. The bills would establish the Revenue Sharing Trust Fund in statute and dedicate a portion of the state’s sales tax to locals, allowing for a true sharing in the state’s revenue. The bills passed the House in November 106-4.

The governor’s FY25 budget did not follow the trust fund model; it calls for a 5 percent increase in base funding and 3 percent for locals that hit ARPA funding allocation requirements.

More details on these proposals will be presented on Tuesday at MAC’s Legislative Conference in Lansing.

Courts

In other great news, funding panels in both chambers recommended more dollars for local prosecutors. These grants would serve to “bring staffing closer to optimal levels to reduce the average caseload per attorney.” The House General Government Subcommittee included $3 million, while the Senate subcommittee included $35 million. There is a caveat to the Senate funds, however: they would only go toward the 15 counties with the most violent crime.

Transportation

Both the House and Senate Transportation subcommittees expressed interest in a mileage-based user fee via a pilot project by allocating $5 million in their budget plans for FY25. The concept of a milage-based user fee is to charge people for the miles they drive rather than how much gas they consume.

While the specifics of the pilot project have not yet been solidified, participation will be voluntary, and participants will be reimbursed for what they pay in gas tax while the study is active. While Michigan is already billions of dollars short on road funding, electric vehicles and high-efficiency vehicles are exacerbating the issue by contributing much less to motor fuel tax revenue.

Nineteen other states are administering similar pilots and at least one state has fully implemented a mandatory mileage-based user fee program. With both chambers in agreement, MAC anticipates the program will be included in the final version of the budget.

Environment

In departmental budgets on environmental programs, neither the House nor Senate included the governor’s proposed raise on the “trash tax.” Commonly referred to as landfill tipping fees, the governor sought to increase them more than 1,000 percent from 36 cents per ton to $5 per ton. The increase was meant to generate $80 million for environmental remediation and brownfield redevelopment. Following the governor’s initial recommendation, industry leaders voiced strong opposition and the Legislature has shown little indication it wants to pursue the increase.

Since neither chamber included the recommendation in their budgets it seems unlikely that it will be included in the final budget.

The next step in the budget process is for the chambers to pass their budgets on the floor. In mid-May, the second Consensus Revenue Estimating Conference of the year will be held to provide an update on the state’s revenue. The official budget targets will then be negotiated between the governor and the Legislature. Conference committees will then meet to agree on the final budget (this is where the House and Senate subcommittees come together to compromise on each chamber’s proposed budgets). The final budget must be presented to the governor before July 1 for her signature.

For more information on MAC’s budget advocacy, contact Deena Bosworth at bosworth@micounties.org.

MAC working on changes to short-term rental legislation

A 10-bill package designed to restrict ― but not eliminate ― local governments’ power to regulate short term-rentals, while allowing for a 6 percent excise tax was the subject of the House Local Government Committee meeting this week. House Bills 5437-5446 did not receive a vote in committee this week, and further hearings are anticipated.

The primary bill in the package is HB 5438, by Rep. Joey Andrews (D-Berrien), which would require short-term rentals to be registered with the state; carry $1 million in liability insurance; have carbon monoxide detectors, smoke detectors and fire extinguishers; and have an emergency contact for renters within 30 miles of the rental. The bill would not allow a local government to ban short-term rentals but would allow communities to restrict their number.  

MAC has not taken a formal position on the bills since counties are not defined as a local government under the legislation; do not have the authority to regulate the rentals; nor do they collect any portion of the proposed excise tax. The bill sponsor is open to amendments to recognize that many counties do the planning and zoning for municipalities and enforce building codes.  

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