Director of Governmental Affairs Deena Bosworth told the House Local Government Committee on Feb. 6 that financial trends continue to run against county governments that are trying to deliver vital local services.

During her presentation, Bosworth noted that counties have not recovered from the Great Recession of the last decade due to the constraints on growth in taxable values on property. Counties rely heavily on the property tax to fund local services, unlike the state government, which has a much more diversified revenue base, Bosworth noted.

Bosworth was among representatives of local government groups to testify before the House panel on the current situation in local services and what the state can and should do to aid their local counterparts.

See Bosworth’s testimony here, starting at the 55:30 mark.

For a complete look at MAC’s 2019 legislative priorities, click here.

Michigan counties will receive $221.4 million in revenue sharing payments from the state via a fiscal 2019 budget bill approved by a legislative conference committee this week. The full Legislature is expected to approve the plan next week and send to Gov. Rick Snyder.

The fiscal 2019 figure will be $1.3 million higher than the FY18 number.

“These figures have been unsettled for weeks,” said Deena Bosworth, MAC’s director of governmental affairs. “It’s important to remember the debate started in Lansing this year with the governor proposing a 1 percent cut from FY18 levels. We are now leaving the Legislature with a 0.5 percent increase, relative to FY18.

“On behalf of our members, we extend our appreciation to the members of the Appropriations Committees in both chambers for making this the fourth consecutive budget year with an increase in revenue sharing payments,” Bpsworth added.

Built into the revenue sharing figures is a $1 million in one-time appropriation that counties are directed to use toward pension or OPEB obligations or debt.

See county-by-county estimates for fiscal 2019.

Antrim, Keweenaw and Mackinac counties return to the formula in FY19 with partial-year payments. That leaves only Emmet and Leelanau still drawing from their Revenue Sharing Reserve Funds that began in 2004 as counties pulled ahead local property tax revenue in an agreement with the state to provide significant state budget relief by temporarily ending revenue sharing payments.

“We are pleased, obviously, that the Legislature has again increased the amount,” said Stephan Currie, MAC’s executive director. “However, as our members know all too well, the money committed is not nearly enough to cover the mandates the state has placed on counties for local public services. MAC will continue to educate legislators on that point and build on the momentum we have gained in recent years.”

In additional budget news:

Health, Human Services, Courts

• County hold harmless on foster care agency per diem is retained, which is an $8 million savings for counties. The budget implementation bill (SB 988) that is likely to pass next week will eliminate the sunset on the county hold harmless.
• $5.5 million for administrative rate payments and $9.9 million in per diem payments for unlicensed relative foster care providers per the Glisson federal court decision.
• Boilerplate language to require the Department of Health and Human Services (DHHS) to maintain the federal foster care appeals process in place as of Sept. 30, 2017, rather than the DHHS proposed policy to remove ability for locals to formally appeal.
• $4.5 million General Fund (GF) increase for essential local public health services and $4.4 million from the General Fund for emerging public health threats.
• $5.5 million GFT for non-Medicaid mental health services to hold harmless Community Mental Health agencies (CMHs) that may be hurt by the new FY19 GF funding formula.
• $11 million GF increase for growth in caseload for Healthy Michigan plan mental health services and substance use disorder services.
• Section 298 language was removed that would have allowed Medicaid Health Plans in the pilot regions to receive all the Medicaid funds without contracting with the CMH in that pilot community.
• $750,000 in a one-time increase specialty court grants.
• $700,000 retained to comply with the juvenile lifer without parole court decision. The executive budget removed this, which would have shifted cost to counties. Legislators later revised the recommendation to include the funds.

Transportation

• Additional $121.3 million to local road agencies, bringing total local road agency funding to $1.37 billion for fiscal 2019. County road agencies will receive $77.9 million of the increase.
• $300 million in one-time GF distributions to road agencies, of which counties will receive $117.3 million. This yields a combined increase of $195.2 million year-over-year for county roads.
• Additional $2.5 million for local transit operating costs to the 81 local public transit agencies.

Agriculture

• Additional $525,700 for grants to eligible county fairs, shows and expositions.

A contingent of Michigan county officials, led by MAC Board President Matthew Bierlein of Tuscola County and other board officers, made a round of visits to Michigan’s congressional delegation on Capitol Hill during the 2018 National Association of Counties Legislative Conference this week.

Taking a break from the policy and service workshops at the conference, Michigan leaders met with Reps. Jack Bergman, Debbie Dingell, Bill Huizenga, John Moolenaar, David Trott, Fred Upton and Tim Walberg on Tuesday, March 6. Michigan leaders also attended a special briefing from the state’s U.S. senators, Gary Peters and Debbie Stabenow, to cap the day.

“These visits are a key part of the annual NACo event in D.C.,” said Stephan Currie, executive director of MAC. “The pace of public life is such that it’s rare when you can put so many county leaders in front of our federal representatives at one time. You have to grab those opportunities whenever you can.”

County leaders attending this year’s NACo event included:

Vaughn Begick (Bay County), Alisha Bell (Wayne County), Roger  Bergman (Ottawa County), Matthew Bierlein (Tuscola County), Ken Borton (Otsego County), David Bowman (Oakland County), Emily Brieve (Kent County), Carol Crawford (Grand Traverse County), Greg DeJong (Ottawa County), Donald Disselkoen (Ottawa County),  Jerry Doucette (Alger County), Veronica Klinefelt (Macomb County), Philip Kuyers (Ottawa County), Sarah Lightner (Jackson County), Daniel Mahoney (Jackson County), Christian Marcus (Antrim County), Stephanie Moore (Kalamazoo County), Michael Overton (Jackson County), Stan Ponstein (Kent County), Julie Rogers (Kalamazoo County), Richard Schmidt (Manistee County), Michael Seals (Kalamazoo County), Eugene Smith (Iron County), Joe Stevens (Dickinson County), Jim Storey (Allegan County), Mary   Swanson (Kent County), Jim Talen (Kent County),  Shelley Taub (Oakland County), Al Vanderberg (Ottawa County) Matthew Van Zetten (Kent County) Gary Woronchak (Wayne County) and Helaine Zack (Oakland County).

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.