MAC urges counties to announce support for ARP match program

MAC is working with the state of Michigan and local government groups on a match program to earmark close to $4 billion in state American Rescue Plan (ARP) funds to invest, amplify and leverage the influx of federal funding to local governments.

Michigan will receive more than $10 billion in fiscal recovery aid, with all 83 counties slated to get $1.9 billion in direct ARP funds. Cities and larger townships will receive $1.8 billion and non-entitlement communities (smaller units) will receive approximately $644 million. Michigan has a chance to leverage all levels of government to strategically invest in areas of the greatest need of improvement. By creating multi-sector partnerships, we can accelerate the impact of the one-time ARP funds.

MAC sees great potential in this situation to invest in Michigan’s future in five key areas: water infrastructure and broadband, local capacity and fiscal stability, housing and community development, comprehensive economic development, and public health and safety.

MAC asks counties to add their voices to this effort by passing resolutions of support. Please see a sample resolution here. If you pass such a resolution, please send a copy to Hannah Sweeney at sweeney@micounties.org.

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

 

Legislature leaves unsettled FY22 budget as summer begins

The Michigan House and Senate came together on a small piece of the budget this week — unfortunately not one that includes revenue sharing payments for counties or an additional $110 million for nursing facilities. All that the Senate and House could agree on prior to a July 1 deadline for delivering an FY22 state budget, was a bipartisan deal to close per pupil foundational allowance gap so each school will see a $8,700 per pupil base amount.

That leaves the bulk of the FY22 budget bills for all state departments and agencies, higher education and community colleges still to come. Still to be addressed are billions in federal coronavirus relief dollars for the current and upcoming fiscal years, as legislators head back to their districts, with only a handful of legislative session days scheduled between now and Labor Day.

The School Aid Fund budget cleared the Senate 33-1 and the House 106-3. The governor commended the Legislature on this action.

Due to the delay on the rest of the budget agreements, the Legislature formally missed the new statutory deadline to present a budget to the governor on or before that date; however, there is no real penalty in the statute for missing it. That means the traditional deadline is in play, which is on the start of the fiscal year on Oct. 1.

Senate Majority Leader Mike Shirkey (R-Jackson) told the Gongwer News Service that work to complete the new fiscal year budget will likely take until late summer and he plans on the Senate returning to the Capitol in August.

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

 

House passes huge budget bill with revenue sharing, indigent defense dollars

The House worked late into Thursday evening this week to move bipartisan budget bills, in hopes the Senate approves them to meet the Legislature’s statutory July 1 deadline to send a state budget to the governor.

Gov. Gretchen Whitmer expressed support for the House actions, which include “the governor’s proposal to make the largest investment in K-12 public schools in our state’s history to close the gap between the lowest- and highest-funded school districts for the first time since the goal was introduced in 1994.”

House Bill 4410 largely maintains baseline spending from the current fiscal year (2021) for the next one (2022), with a few new investments. If the Senate does concur with the House approach, the state would still retain $3.1 billion in its General Fund, $880 million in the School Aid Fund and the first half of the $6.5 billion in American Rescue Plan (ARP) funds.

The bill includes a 2 percent increase (1% as ongoing and 1% as one-time) for county revenue sharing. MAC had asked legislators to end the County Incentive Program, which forces counties to do unnecessary paperwork to get their full revenue sharing allotment each year, but those requirements would remain in place under HB 4410.

An increase of $29.1 million is designated for the first year of phased-in funding of the Raise the Age program that moves 17-year-old offenders into the juvenile justice system. A nd Michigan Indigent Defense Grants would be fully funded, as the House agreed with the governor’s recommendation for about $149 million in General Fund spending for them.

Other items of note include:

• $26.5 million to establish 14 integrated behavioral and physical health clinics
• $51.4 million for Essential Local Public Health Services
• $13 million for Secondary Road Patrol (plus an additional $2.7 million from an FY21 supplemental budget bill)
• $13 million for Community Corrections plans and services
• $4 million for the County Veteran Service Fund

Not making it through the House, however, was a spend of $5 million of the federal Coronavirus State Fiscal Recovery Funds to reimburse county jails for housing offenders at county jails who otherwise would have been held in state prisons.

For a full breakdown of the House plan, click here. The Michigan Senate’s next schedule session is on Wednesday, June 30.

For more information on state budget matters, contact Deena Bosworth at bosworth@micounties.org.

 

ARP revenue calculator released; consulting contracts now available

Counties now can download their own copies of a calculator sheet on revenue losses for purposes of the American Rescue Plan (ARP), the National Association of Counties announced this week.

Developed by the Government Finance Officers Association, the calculator can be found here.

MAC also is pleased to announce that four consulting firms, operating under pre-vetted contracts that comply with all requirements of Michigan law, are now available to assist counties that need advice and guidance on spending and tracking ARP payments.

“The vendors chosen through this process are prequalified to assist counties in managing the COVID-19 relief funds allocated through the American Rescue Plan Act of 2021,” explains MAC’s subsidiary, CoProPlus, which worked with Livingston County on the RFP to identify consulting firms. “The contracts offer a means for counties to receive financial accounting, oversight monitoring, auditing and/or reporting services as required for each individual project.”

During a call this week, NACo staffers reviewed the latest information from the U.S. Treasury on rules, deadlines and details about the use of federal relief funds. They encouraged counties to regularly visit the NACo analysis page on revenue issues.

In other ARP news, local governments can now visit the Michigan Department of Treasury American Rescue Plan Act (ARPA) webpage to view information and updates regarding the Coronavirus Local Fiscal Recovery Fund.

As always, be sure to check MAC’s COVID Resources Page for the latest developments in responding to the COVID-19 crisis.

 

MAC continues to gather answers, devise strategies on ARP spending

With the release of a new U.S. Treasury FAQ sheet and aggregated language on interim spending rules, Michigan counties now have substantial guidance on how they can use the $1.9 billion in direct investments via the American Rescue Plan.

Meanwhile, MAC is working with state and local officials on a strategy to help magnify the impact of the billions of dollars coming to all levels of government in our state.

Among key elements in the new Treasury FAQ are: 

• Costs of consultants: Recovery Funds CAN be used to cover the costs of consultants to assist with managing and administering the funds.
• Public jobs programs: Recovery Funds CAN be used to establish public jobs programs (I.e. subsidized employment, combined education an on-the-job training, job training to accelerate rehiring or address negative economic impacts, childcare assistance or assistance with transportation to and from a jobsite or interview).
• Revenue loss and audited financial data: If a county does not have audited data readily available when calculating its revenue loss, it is not required to obtain audited data. 
• Revenue loss and Census data: When calculating general revenue, counties should use their own data sources and do NOT need to rely on published revenue data from the Census Bureau.
• Revenue loss on cash basis/accrual basis: When determining revenue loss, counties may provide data on a cash, accrual or modified accrual basis, so long as the county is consistent in their choice of methodology throughout the covered period and until reporting is no longer required.

For more context and guidance, counties also can consult documents created by MAC and by NACo that highlight critical issues and concepts.

And MAC continues to work on a plan to earmark close to $4 billion in state ARP funds as matching funds to enhance local efforts. For this plan, the Whitmer administration and legislative leaders have asked for ideas that:

• will be transformational in nature;
• do not create new programs; and
• strategically invest the one-time dollars in areas of greatest need for improvement.

MAC has been having multiple conversations each week with the administration, legislative leaders, business and community leaders and other stakeholders on this idea. Our hope is to create a groundswell of support that bridges the political gap in Lansing and truly provides the resources and value needed for strategic investments in Michigan. As part of that effort, MAC has created a resolution template that counties can use to express support for the matching funds concept.

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