The Legislature’s decision to focus bills to adopt the recommendations of Gov. Rick Snyder’s task force on the pension-OPEB crisis leaves Michigan’s 83 counties without adequate new tools they need to address funding of retirement benefits, MAC’s executive director said. Stephan W. Currie, who has served on both of Snyder’s task forces on this issue, said in response to the Legislature’s actions early Thursday morning, “We still need a variety of new tools to address commitments.” “Adoption of the task force recommendations” Currie added, “is a bare minimum effort on collecting data on the problem. The other side of the coin here is, of course, revenue. Heading into Wednesday, we saw good prospects on separate, but related, legislation that would have created a secure fund for county revenue sharing and set a schedule for increased payments. Those advances now appear to be stuck.” MAC supported the task force recommendations and, thus, supports the new versions of the bills, but Currie said that most of the work remains unfinished. “This fell far short of the mark,” he said. “But we will continue to work with our members and the state to, first, collect the best data on the problem and convince state lawmakers of the need to equip county governments with the tools and revenue they need to handle these benefits.”

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.

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.

Legislation 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.