FY21 budget won’t cut revenue sharing

The Whitmer administration and legislative leaders have agreed on a fiscal year 2021 deal to balance the state budget, a deal that will ensure counties will receive the same amount in revenue sharing as FY20 allocations, prior to the cancellation of the August revenue sharing payment. These funds will be in the form of the traditional General Fund dollars that do not require allocation to Covid-19 pandemic related expenses.

The Legislature set up budget for action next week through House Bill 5396, omnibus budget, and Senate Bill 927, school aid. After months of concern due to budget shortfall projects impacted by COVID-19, MAC is appreciative of the news and support of both the legislature and administration. Lawmakers are expected to complete the budget next week.

While limited detailed information has been released at this point, MAC will report as soon as possible the final budget details.

 

Bill to extend remote meeting option gets MAC support

MAC-supported legislation that would allow remote participation in board meetings after the pandemic Executive Orders expire has been introduced in the Legislature. Rep. Luke Meerman (R-Ottawa) introduced House Bill 6207 to amend the Open Meetings Act to allow a meeting be held electronically, while ensuring transparency and promoting public participation. A similar Senate Bill, 1108 by Sen. Lana Theis (R-Livingston), will be reviewed by the Senate Local Government Committee next week.

The meeting must allow for two-way communication so the public can hear and be heard, particularly during public comment periods. Additionally, the public body can allow comments to be typed and read or shared with members and participants. If a public body meets electronically, they must explain the reasoning and process for the public to participate in detail.

The bill specifies that a closed session may occur electronically as well and must be held in compliance of current closed session requirements under the Open Meetings Act.

The bill was sent to the House Committee on Government Operations. MAC encourages members whose representatives are on that committee to reach out to and voice support for this legislation. 

For more information, contact Meghann Keit at keit@micounties.org.

 

Whitmer signs court cost extension into law

The authority for trial courts to impose costs on defendants is extended to 2022 under a state law signed by Gov. Gretchen Whitmer this week. Passage of House Bill 5488 had been a top priority for MAC this year since the imposition of court costs was about to expire next month. Now that authority runs to Oct. 1, 2022.

Without the legislation, by Rep. Sarah Lightner (R-Jackson), county courts would have lost this source of funding for operational needs in a few weeks.

The state’s Trial Court Funding Commission has said court costs “directly account for as high as $291 million annually in support (most of the 26.2 percent generated). Additionally, approximately $127 million of the annual funds transferred from the State originate from court assessments at sentencing. When totaled, Michigan trial courts are supported, in significant part, by over $418 million assessed to criminal defendants.”

Of course, the work on this issue is far from over. The new deadline is just two years way, and the next phase will be to finally solve the long-standing problem of a stable court funding system. MAC stands ready to continue the work with the Legislature to help streamline and improve the overall system. While a variety of reforms are needed, a key one is to rebalance state and local funds in the court system, as reported by the Trial Court Funding Commission. 

For more information on this issue, contact Meghann Keit at keit@micounties.org.

 

Emergency Management Department bill reviewed by committee

The House committee on Military and Veterans Affairs took testimony this week from emergency managers (EM) in support of House Bill 6148, by Rep. Jack O’Malley (R-Benzie). The bill would move emergency management functions out from under the Department of State Police and into a new department that will report and communicate directly with the governor. Compelling testimony was given this week by two county emergency management coordinators indicating support for this restructuring. The reasons cited for their support include:

  • Not all emergencies are law enforcement related and should not be treated as such. With emergency management under State Police, their focus tends to be on law enforcement activities related to an emergency and not necessarily coordination of all different types of emergency response activities.
  • State Police receive an Emergency Management Planning Grant that funds 100 percent of their activities. Local Emergency management has asked for an accounting of their expenditures for many years and have not received it, therefore they are unsure of whether or not there are additional funds that should be going to support emergency management operations at the local level. .
  • The turnover in the Department in this area is high, with those in charge and those closest to the counties only lasting 2-3 years. This, according to the local emergency management coordinators, is not enough time to develop expertise and establish clear priorities.
  • It is more expensive to pay a uniformed officer to perform these functions than it is civilians, but in this structure, civilians have no advancement opportunity and usually leave to go to FEMA.
  • The State Police has failed to provide a list of resources for the local EM coordinators to utilize. Help is given but items and assistance must be directly asked for. Without knowledge of what is available, it is difficult to ask for assistance.  
  • State agencies of all types show up to emergencies without any coordination of effort. The State should be doing this but again, the focus is on deploying law enforcement and not the coordination of all the other entities with an interest in the disaster. The local EM coordinator is typically responsible for this coordination as well.
  • Michigan is only one of two states in the nation that house emergency management strictly inside a law enforcement department.

MAC’s Finance and General Government Committee voted this week to support the legislation.

If your county would like to weigh in on this proposal, contact Deena Bosworth at bosworth@micounties.org.

 

Broadband bill advances despite local control issues

A MAC-opposed bill ostensibly designed to boost broadband access cleared the House Communication and Technology committee this week.

House Bill 4288, by Rep. Michele Hoitenga (R-Wexford), would create the “Connecting Michigan Communities Act” to establish a statewide grant program to expand broadband in underserved areas. 

While MAC supports greater access to broadband, this bill excludes local governments from accessing the grant program. It does provide requirements to show “evidence of community support for the project with a narrative on the impact that the investment will have on community and economic development in the area.” However, MAC is unclear what “evidence” means for the process.

MAC will continue to work to ensure clear, collaboration with local and county boards to encourage better infrastructure planning and deployment of these grant funds.

Local partners such as MML and MTA were also in opposition as the bill passed committee. The bill now moves to the House Ways and Means Committee.

For questions, contact Meghann Keit at keit@micounties.org.

 

2020 Annual Conference videos now available

Video files from MAC’s recent Virtual Annual Conference are now available on MAC’s YouTube Channel

Members can view all of the seven conference workshops and two of the plenary sessions, headlined by Tom Izzo’s keynote remarks, via the conferences page on our website.

 

COVID liability shield bill clears House committee

A house bill to provide liability protections to health facilities, including Medical Care Facilities (MCFs), advanced out of the House Judiciary committee this week.

House Bill 6159, by Rep. Roger Hauck (R-Isabella), would create the “pandemic health care immunity act.” Facilities would not be liable for an injury, including death, sustained by an individual while received services at the facility. The immunity would be applied from March 9 to July 15, 2020.

The Michigan County Medical Care Facilities Council (MCMCFC) supports HB 6159, along with other health care partners such as HCAM and MHA. The bill now awaits action from the full House of Representatives.

For questions, contact Meghann Keit at keit@micounties.org.

 

Currie talks COVID impacts with Lansing Chamber panel

Michigan counties have weathered the initial fiscal crisis caused by the coronavirus pandemic, but dangers loom on the horizon, MAC Executive Director Stephan Currie said during a panel discussion at the Lansing Regional Chamber of Commerce’s Economic Club last week.

During his remarks, Currie discussed the broad scope of county responsibilities under COVID, from public health and safety to aiding businesses to stay open via treasurer and register of deeds offices.

Asked about county innovation during the crisis, Currie noted the quick and broad adoption of videoconferencing technology, particularly in the court systems; Oakland County’s efforts to supply businesses with PPE; and even Ottawa County’s new “greeter,” a robot that meets visitors at the county building and offers touch screen services to guide residents to the appropriate office.

He added, however, that the crisis had shown a need to improve broadband services across Michigan and that counties are still wrestling with the details of filing for federal aid for COVID efforts.

Currie was joined on the “local government” panel by Summer Minnick of the Michigan Municipal League, Neil Sheridan of the Michigan Townships Association and Eric Scorsone of the Center for Local Government Finance and Policy at Michigan State University.

 

NACo town hall features election experts

America’s counties traditionally administer and fund elections, overseeing more than 109,000 polling places and coordinating more than 694,000 poll workers every two years. Faced with new election-related challenges due to COVID-19 and concerns over cybersecurity, foreign influence and aging technology, election administrators across the country have worked tirelessly to finalize preparations to conduct a free and fair election.

Join the National Association of Counties (NACo) on Sept. 22 at 2 p.m. EDT for a special virtual town hall and hear from federal and local elections officials about how they are working to ensure a safe, fair and secure election this fall.

 

Opioids town halls set for Sept. 23, 25

The Michigan Opioids Task Force and Michigan Department of Health and Human Services (MDHHS) have announced the details of the first two virtual opioids town halls:

  • Northern Lower Michigan (previously the Gaylord Town Hall), Wednesday, Sept. 23, 5 p.m.-6:30 p.m.
  • Flint and Thumb Region (previously the Flint Town Hall) Friday, Sept. 25, 3:30 p.m.-5 p.m.

During the events, state officials will seek to learn more about how the opioid epidemic has impacted different regions of the state. To ensure information gathered reflects the experience of the local communities, residents are asked to only participate in the virtual town hall for the area in which they reside.

At the town halls, MDHHS and the Michigan Opioids Task Force will share the 2020 strategy to turn the tide on the crisis, seek feedback from the public and host a Q&A about the crisis response.

For more information about the state’s opioids response and available resources, visit Michigan.gov/opioids.

 

Podcast 83 team to discuss state budget, fall priorities

MAC’s Podcast 83 team will lead a special live edition on Monday, Sept. 21 to field questions from county leaders on the FY21 state budget and all other legislative matters coming to a head in Lansing this fall.

Executive Director Stephan Currie will moderate the discussion that will include Deena Bosworth, governmental affairs director, and Meghann Keit, governmental affairs associate.

Click here to register for the free webinar, which will run from 1 p.m. to 2 p.m. 

If the event doesn’t work with your schedule, don’t worry. A video recording will be made available on the Podcast 83 homepage on Sept. 22.

To ensure your question gets the full Podcast 83 treatment, send it in advance to Bosworth at bosworth@micounties.org.

 

Webinar goes over latest on COVID-19 for locals

The latest webinar in a series co-sponsored by MAC, the Michigan Department of Treasury and others reviewed the latest guidance and tips involving COVID-19 aid for local governments on Sept. 8.

To see a video recording of the session, click here.

Also, on Friday, Treasury reported that the Funding Acceptance Packet for the Coronavirus Relief Local Government Grants (CRLGG) is now available.

For more information on Treasury information on COVID-19, visit their webpage.

 

Bill would create state Emergency Management Department

A state Department of Emergency Management would be created under a bill filed last week.

House Bill 6148, by Rep. Jack O’Malley (R-Benzie), would remove the emergency management functions from the Michigan State Police Department and relocate it to its own department; require an emergency management plan be submitted to the governor and the Legislature every two years; require each county emergency management coordinator to be certified and report directly to the county board chair; require distribution of federal grants to counties and municipalities; and prohibit an elected official as serving as the emergency management coordinator.

Testimony on the bill is expected next week. MAC has not taken a position on the bill yet.

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

 

New PPT bills would affect heavy equipment, solar

The House Committee on Tax Policy took testimony this week on House Bills 5778 and 5779, by Rep. Jim Ellison (D-Oakland), that would change the way rented heavy equipment is taxed in Michigan. Currently, heavy equipment is taxed as personal property (PPT) and credited to the taxing jurisdiction where it physically sits on Dec. 31 of each year. 

Since this equipment is rented and movable, neither the companies paying the taxes are clear what their obligations will be on a year to year basis nor can the local tax collecting units forecast the revenue in an efficient manner. The bills seek to eliminate PPT on this equipment and instead replace it with a 2 percent tax on the rental of the equipment. This tax would be paid by the customer, collected by the company renting the equipment and submitted quarterly to the Michigan Department of Treasury.

By May 20 of each year, Treasury would be required to send 90 percent of this revenue to the local tax collecting unit where the rental transaction originated, and 10 percent of the revenue to the other counties, cities, villages and townships not receiving a share of the distribution. Within 35 days of receiving the revenue, the tax collecting unit would be required to disburse the revenue to the taxing units (counties, et al) in the same proportion as it distributes property taxes. 

In addition to the equipment rental bills, bills affecting the PPT on solar energy facilities have been introduced. Senate Bill 1105, by Sen. Curt VanderWall (R-Mason) and SB 1101, by Sen. Kevin Daley (R-Tuscola), would exempt solar energy facilities and storage systems from the PPT and instead create a PILT (payment in lieu of taxes) system. 

Proponents are seeking a standardized, statewide system that will provide predictability in the taxes owed, regardless of the jurisdiction; escape the variability in assessments and millage rates; and provide a flat stream of revenue for those communities that host this equipment. The legislation would create a PILT of $3,500 per megawatt maximum annual payment, as opposed to a tax based on an assessed value and depreciation schedule.

In order to qualify for PILT as opposed to a tax, the owner of the facility would be required to file for and receive an exemption certificate, which would not expire unless they permanently ceased production, received a judicial determination that they failed to make their payments, or upon the jointly agreed upon termination date. MAC is seeking clarification on the equitable amount per megawatt hour, the assumptions that brought them to that amount, the efforts of the Michigan Tax Tribunal to make recommendations on standardizing the assessment of the equipment and the overall financial impact to counties.

MAC has not yet taken a position on any of these bills. The legislation will be discussed at our September Finance and General Government Committee session.

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

 

State launches Futures for Frontliners campaign

County frontline workers put their own health at risk during the worst of the pandemic. That’s why Michigan has created Futures for Frontliners – to offer essential workers like you the opportunity to attend school tuition-free full-time or part-time while you continue to work. MAC is pleased to partner with the state and others on this initiative.

Who’s eligible? All essential workers in Michigan without college degrees or high school diplomas or equivalency who staffed our hospitals, nursing homes, and grocery stores, who cared for our children, provided critical police and fire services, delivered our food, picked up our trash, manufactured PPE, and other key jobs during the April-June period that kept our state running.

The application for seeking a college degree or certificate, attaining your high school diploma or equivalency, and additional program information are available now at Michigan.gov/Frontliners, with enrollment in classes available beginning January 2021.

Please share this information with your county employees.

 

NACo unveils toolkit for lobbying Congress

To help local leaders advocate for top county priorities between now and the end of the year, NACo has developed an online Advocacy Toolkit, which features in-depth information, talking points, sample advocacy emails, tweets and Facebook posts, federal legislation trackers and exclusive NACo materials to help tell the county story.

As members of Congress are in their home districts, this toolkit provides resources to communicate with them, demonstrate the impact of county programs and advocate for federal policies that support local priorities.

 

Water School webinars aimed at local officials

MSU Extension is offering a free online Michigan Water School webinar series for elected and appointed officials and staff. Elected and appointed officials often need to make important decisions regarding the future of shared water resources. The new online version of the Michigan Water School program from Michigan Sea Grant and Michigan State University Extension provides decision-makers with critical, relevant information needed to understand Michigan’s water resources in order to support sound water management decisions.

This year, Michigan Water School: Essential Resources for Local Officials will be offered for free in a series of Zoom webinars from 3 p.m. to 5 p.m. on four Thursday afternoons (Oct. 8 and 22, Nov. 5 and 19). The program will include sessions on water quantity; water quality; water finance and planning; and water policy issues. Topics to be covered include:

  • The Blue Economy
  • Fiscal benefits of water management
  • Incorporating water into local planning and placemaking
  • Resources to help address water problems
  • Water policy at the federal, tribal, state, and local levels

Water School speakers will include educators and faculty from MSU and MSU Extension as well as other experts providing local perspectives.

Register to attend the free, policy-neutral, fact-based program at events.anr.msu.edu/WaterSchoolWebinarSeries2020. Not sure if you will be able to attend the live sessions? Each webinar will be recorded and all registrants will receive links to the recordings so you can watch them at a more convenient time, along with additional resources.

For more information, contact Michigan Sea Grant Extension Educator Mary Bohling at bohlingm@msu.edu. Follow on Twitter with #MIWaterSchool.

 

MAC’s Podcast 83 team will lead a special live edition on Monday, Sept. 21 to field questions from county leaders on the FY21 state budget and all other legislative matters coming to a head in Lansing this fall.

Executive Director Stephan Currie will moderate the discussion that will include Deena Bosworth, governmental affairs director, and Meghann Keit, governmental affairs associate.

Click here to register for the free webinar, which will run from 1 p.m. to 2 p.m.

If the event doesn’t work with your schedule, don’t worry. A video recording will be made available on the Podcast 83 homepage on Sept. 22.

To ensure your question gets the full Podcast 83 treatment, send it in advance to Bosworth at bosworth@micounties.org.

Key trial court costs bill to become law

Legislation to extend the authority of trial courts to levy costs to defendants will soon be law, after the Senate this week approved House Bill 5488 and sent it to Gov. Gretchen Whitmer for her expected signature.

The bill, a major priority for MAC in 2020, extends cost authority to Oct. 1, 2022. Without the legislation, by Rep. Sarah Lightner (R-Jackson), county courts would have lost this source of funding for operational needs in a few weeks. The final Senate vote on HB 5488 was 29-8, with all “no” votes from Democratic senators. 

The state’s Trial Court Funding Commission has said court costs “directly account for as high as $291 million annually in support (most of the 26.2 percent generated). Additionally, approximately $127 million of the annual funds transferred from the State originate from court assessments at sentencing. When totaled, Michigan trial courts are supported, in significant part, by over $418 million assessed to criminal defendants.”

Of course, the work on this issue is far from over. The new deadline is just two years way, and the next phase will be to finally solve the long-standing problem of a stable court funding system. MAC stands ready to continue the work with the Legislature to help streamline and improve the overall system. While a variety of reforms are needed, a key one is to rebalance state and local funds in the court system, as reported by the Trial Court Funding Commission. 

For more information on this issue, contact Meghann Keit at keit@micounties.org.

 

Nursing home report: Create more aid for staff, look to ‘recovery centers’

A new report on combating COVID-19 in Michigan’s nursing homes has 28 recommendations, including an emphasis on training and support for frontline care workers and the replacement of the state’s current regional “hubs” for COVID-positive nursing home residents with “care and recovery centers.”

The report came from a gubernatorial task force which has been meeting twice a week this summer. Renee Beniak, executive director of the Michigan County Medical Care Facilities Council (MCMCFC), chaired the task force’s staffing work group. She called nursing assistants’ jobs, which involve the most interaction with residents, “one of the most difficult. To take good care of the residents and do the best job possible, I think the staff have to be happy and fulfilled and not overwhelmed and burn out.”

MCMCFC represents 34 county-owned facilities scattered across the state from the western Upper Peninsula to Macomb County.

 

Next local finance webinar is Sept. 8; register today

The seventh in an ongoing series of webinars co-sponsored by MAC and the Michigan Treasury will be held on Sept. 8, starting at 2 p.m.

County leaders can sign up now for the webinar, which will include an update on state budget process and the CARES Act programs, information about local government unclaimed property.

Each webinar is limited to 1,000 attendees. Participants are strongly encouraged to register early.

Treasury also has developed a webpage with numbered letters, memorandums, webinars, and resources regarding COVID-19 updates for local governments and school districts. This webpage was created to ensure that Michigan communities have access to the most up-to-date guidance and is updated frequently with information and resources as they become available.

For the latest updates, please review the COVID-19 Updates for Local Governments and School Districts’ webpage

 

State launches health IT input campaign

A new effort by the state Health and Human Services Department (DHHS) to create a “roadmap” for health information technology will include a series of 16 virtual engagement sessions on a variety of topics such as care coordination, racial disparities in health, coronavirus response, and behavioral health. The sessions get under way on Sept. 15 and will continue into November.

Click here for full schedule

“These sessions will provide an opportunity to collect input from stakeholders across Michigan on using data from health IT systems to address business needs as well as the needs of individuals they serve,” the department stated.

For more information, visit the MDHHS Health IT Commission web page.  

 

By: Dan Papineau, Director of Tax Policy and Regulatory Affairs, Michigan Chamber of Commerce

(Editor’s note: This article originally appeared in the August edition of Michigan Counties, MAC’s bimonthly e-newsletter.)

Perhaps it was the recent remark I made about Michigan’s broken municipal finance system while testifying in front of a state legislative committee that prompted the invitation to contribute to this publication.

I agree with the nonpartisan Tax Foundation that all tax policy should be based on four cornerstone principles: simplicity, transparency, neutrality and stability. The revenue side of our municipal finance system fails in all four of these categories. This is not hard to believe since local government revenues are overwhelmingly made up of property taxes. County governments depend on property taxes for 60 percent of their revenues. The crux of the problem behind our state’s municipal finance system is the over-reliance on property taxes. When we think about property taxes through the lens of the four principles of sound tax policy, we see why.

Simplicity

Since 1893, Michigan has had an ad valorem property tax system that relies on the current value of a subject property. Assessing a value to every piece of real property and all nonresidential personal property is no easy (or simple) task.

While the practice of assessment and appraisal has evolved into a complex science over the last 127 years, it is still a relatively subjective process. This subjectivity erodes simplicity. Both taxpayers and local units of government see this problem play out far too frequently in the form of property tax disputes that end up in court wasting the time and resources of everyone involved.

Property taxes can be looked at as a fair way to spread the cost of local government services across varying portions of the population but, our system has become so complicated and hamstrung by a plethora of minor tweaks and/or major deviations that our property tax system is caving in on itself. The mechanism that brings in the most significant portion of revenues county governments need is about as simple as the internal workings of the human brain.

Transparency

With increased accessibility to BS&A and other technologies, the principle of transparency has been greatly bolstered but, the process of assessment to state equalization is anything but transparent.

While summary appraisal record cards are available online either through free access or paid access, the level of detail made available lacks full transparency. For example, the building valuation work up, land value tables, economic condition factor tables and supporting studies are not available unless a Freedom of Information Act request is filed. Even the body that audits the entire property tax system, the State Tax Commission, does not share the results of their audits with the public.

Neutrality

The principle of tax neutrality is summarized as follows: “Taxes should neither encourage nor discourage personal or business decisions”. The fact is the property tax system Michigan imposes today does the exact opposite. The property tax system is actually designed to influence the decisions businesses make and to a lesser degree, the ones individuals make.

Property taxes have been used to compete for investment across local units of government and between states. Much of the policy that promotes this behavior is not within the control of the governing body of the local unit.

Policy-makers at all levels use the property tax system to encourage or discourage different behaviors. Michigan has a few parameters to promote neutrality, but they are so ineffective they are practically nonexistent.

Stability

By nature of its design, the property tax is unstable.

First, the personal property tax is based on depreciating value. It is literally designed to go down and therefore be anything but stable. Real property tax revenues or the values of which they are based on, while not as heavily affected by depreciation, are constitutionally prohibited from increasing beyond a certain level after being allowed to decline without restriction. Stable on the way back up but not down.

Second, value itself is not stable. A property worth a certain amount one day could be worth half the next. Our economic cycle contains peaks and valleys not a flat line of prosperity.

Third, policy-makers are constantly rearranging the property tax system to address its numerous faults; however, the never-ending alterations result in instability and effect budgets of police departments, public works departments and general fund spending of county governments everywhere.

Fixing the revenue side of our municipal finance system is extremely difficult while decrying its faults is easy. I respect those who dedicate their careers to finding ways to improve the system we have. We really must look at local government revenue from a completely new perspective. I believe this starts with revamping the complete service delivery method our state is currently straddled with. My friends at MAC hear me say often that county government is the best form of government. Counties should be the ones administering practically all of the services a citizenry relies on. To transfer to this type of service delivery model we must also permanently address the compounding debt burden facing counties across Michigan. Lastly, we can discuss opportunities to reinvent the property tax system (or scrap it) and create a more diverse revenue stream for local units of government to depend on.

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