Deal reached, adopted to avoid federal debt default

“After several rounds of negotiations, the White House and House Republican Leadership reached an agreement to address the debt limit and cap spending,” the  National Association of Counties (NACo) reported. “The deal, titled the Fiscal Responsibility Act of 2023 (FRA) (H.R. 3746), would suspend the debt ceiling through January 1, 2025, effectively increasing the amount of money that the federal government can borrow to fund federal programs. On January 19, 2022, the U.S. Department of the Treasury announced that the federal government had hit its $34.1 trillion debt limit. This agreement comes less than a week ahead of the deadline after which the federal government would no longer have the capacity to pay its obligations.

“After quickly passing the House, the legislation passed the Senate by a vote of 63-36 on June 1, ensuring the federal government will not run out of money to pay its bills on Monday, June 5, the day the government would default on its debt.

“The nonpartisan Congressional Budget Office (CBO) released its assessment of the bill’s impact on federal debt and deficits. CBO estimated that if the legislation were enacted, budget deficits would be reduced by about $1.5 trillion over the next decade and interest on the public debt would be reduced by an estimated $188 billion.

“NACo applauds our federal partners for reaching a bipartisan agreement to raise the federal debt ceiling. While this is a significant move that will provide much-needed certainty to counties, there are a handful of provisions of relevance to local leaders including spending cuts, permitting reform, implementing new work requirements for certain federal public assistance programs and reinstating federal student loan payments.

“A comprehensive analysis of the Fiscal Responsibility Act and its impact on county governments can be found here.”

 

MAC-backed juvenile justice package begins legislative journey

A package of 20 bills to reform the state’s juvenile justice system, supported by MAC, was introduced in the House this week and referred to the chamber’s Criminal Justice Committee.

The package, House Bills 4624–4643, is a result of the Michigan Task Force on Juvenile Justice Reform’s recommendations provided last July.

The Task Force on Juvenile Justice Reform was established by Gov. Gretchen Whitmer in 2021. The bipartisan task force was chaired by Lt. Governor Gilchrist and included members from all three branches of government, as well as state and local level juvenile justice leaders and advocates. Two county commissioners served on the Task Force, each nominated by MAC. Alisha Bell of Wayne represented a county commissioner from a county with a population over 100,000, and Marlene Webster of Shiawassee represented a county commissioner from a county under 100,000 in population. Rep. Sarah Lightner, a former county commissioner, also served on the Task Force.

The Task Force discovered several challenges to strengthening public safety and improving outcomes for youth. Those challenges, however, led to the set of 32 recommendations last year. Six priority areas have been identified and translated into this 20-bill package.

HB 4624, by Rep. Christine Morse (D-Kalamazoo), enhances the Child Care Fund (CCF) by establishing a minimum framework of juvenile justice best practices statewide, including the use of risk screening and assessment tools. The best practices will be supported by an increase in the reimbursement rate for community-based services from 50 percent to 75 percent. These changes are essential to ensure counties have the resources to implement and utilize these approaches.

(UPDATE: Please see clarification on CCF rate changes in the Aug. 25, 2023, Legislative Update.)

HBs 4625–4629 require the consistent use of validated screening and assessment tools to enable more objective decision-making and allow agencies to better match youth to appropriate supervision and services, reducing their likelihood to recidivate. The bills also expand the Diversion Act so that all offenses, with an exception for youth committing a specified juvenile violation, are eligible for pre-court diversion, based on the use of a risk-screening tool and other factors and limit the time that a youth can be placed on pre-court diversion, unless the court determines that a longer period is needed. While diversion eligibility would be expanded, judicial discretion remains.

HBs 4630 and 4631, by Rep. Lightner (R-Jackson), would expand the Michigan Indigent Defense Commission to include development, oversight, and compliance with youth defense standards in local county defense systems, and expands the State Appellate Defender Office to include appellate services for juveniles.

HBs 4634–4637 eliminate most non-restitution fees and costs associated with juvenile justice system involvement. The bills do not include the elimination of restitution or fees related to the Crime Victims Fund. For restitution and fees related to the Crime Victims Fund, the bills establish a standard procedure for ability to pay, determination of payment schedule, and total to be assessed.

HBs 4638–4642 would strengthen and expand the Office of the Children’s Ombudsman for handling, investigating, and reporting incidents in juvenile facilities.

A committee hearing is expected in the coming weeks, as well as the introduction of this bill package in the Senate.

MAC supports this package and has shared a letter of support with members of the House Criminal Justice Committee.

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

 

FY24 budget remains on track after revenue conference

State legislators now in the final phases of preparation for the fiscal 2024 budget still have the resources to cover General Fund spending in the $14 billion range, state experts told the Consensus Revenue Estimating Conference today.

While the conference finalized headline revenue figures to use for FY24 at levels substantially below their January 2023 estimates, the actual resources available to state budgeters are largely unchanged from earlier in this year, MAC is told.

This is due to the impact and timing of various tax policy changes implemented in recent months, such as the elimination of the “pension tax,” the increase in the Earned Income Tax Credit and a cut in the personal income tax rate.

In the vote Friday morning, the conference adopted a net General Fund revenue total of $13.24 billion, an apparent huge decrease from January estimates.

However, resources for FY24 and carrying over from prior budget years allow for both the House and Senate appropriations bills to be funded as they presently stand. The chambers, though, still have to reconcile differences in their budgets before the Legislature’s mandated deadline of June 30 to complete budget work.

The FY24 budget would take effect on Oct. 1, 2023.

For FY24, the state would be $12 billion underneath the constitutional revenue limit imposed by the Headlee Amendment approved by voters in 1978.

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

 

MAC needs your help in stopping attack on local control over mining

Legislation preempting local control over sand and gravel mining was introduced this week in the House. In a joint statement with the Michigan Townships Association (MTA) and Michigan Municipal League (MML), MAC opposed House Bills 4526, 4527 and 4528, by Reps. Pat Outman (R-Montcalm), Tyrone Carter (D-Wayne), and Angela Witwer (D-Eaton) respectively, which aim to eliminate local control of aggregate mining operations and place the regulating authority in the hands of the Department of Environment, Great Lakes, and Energy (EGLE).

Should this legislation become law, local governments would have no jurisdiction over the issuance of a permit, approval, or other authorization for the location, operation, abandonment, or reclamation of an aggregate mine. EGLE is being granted the authority to usurp local officials to work directly with the aggregate industry to approve mining sites and their activities, with little to no community input.

MAC, MTA, and MML worked together last term to block nearly identical legislation. This move would set a dangerous precedent on preemption of local control in other policy areas.

There has been a lack of transparency from the legislature during this process. Local input has not been sought on this legislation, indicating an unwillingness to negotiate.

HBs 4526-28 have been referred to the House Committee on Regulatory Reform. We anticipate they will be approved by the committee next Tuesday, May 9.

MAC has set up an easy digital campaign for you to send your opposition to your state representative. To begin, just click this link TODAY!

Your voices are vital during this process. There is power in numbers!

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

 

County revenue sharing in line for big boost under budget plans

County revenue sharing could grow by as much as 17 percent in fiscal 2024 under decisions made this week by key subcommittees in the Michigan House and Senate.

In the House, the Appropriations Subcommittee on the General Government approved House Bill 4292, by Rep. Felicia Brabec (D-Washtenaw), which follows Gov. Gretchen Whitmer’s plan for a 17 percent hike in revenue sharing.

This increase is divided into several segments:

• 5 percentage points would be ongoing and for general use
• 5 percentage points would be a one-time appropriation for general use
• 2 percentage points would be ongoing and restricted to public safety uses
• 5 percentage points would be a one-time appropriation restricted to public safety uses

In all, these changes would place FY24 revenue sharing at more than $285 million.

The Senate’s boost is smaller than the House’s but still large. Senate Bill 189, by Sen. John Cherry (D-Genesee), includes the same ongoing and one-time boosts for general use as the House (see bullets 1 and 2 above), but it does not include the additional funds for public safety. 

Overall, the Senate’s plan would have revenue sharing at $269 million for FY24.

In another positive note, and based on a MAC request, the Senate subcommittee plan would end the County Incentive Program and its requirements for the annual submission of verification of the posting of budgets online and the publication of citizen guides.

The Senate proposal also allows access to any unallocated funds from a $750 million appropriation for municipal pension assistance for use as grants for those local governments with OPEB obligations funded at 7 percent or less. An exact allocation for this will not be known until pension grants have been allocated.

Finally, on the Senate side, Sen. Cherry recommended a new program in the Department of Attorney General to assist communities with high crime by allocating $10 million and 45 full-time positions. 

To be clear, these amounts are far from final. The next huge budget step is the Consensus Revenue Estimating Conference (CREC) on May 19 to set final resource numbers for FY24.  Following CREC, committee chairs will be given more specific budget targets and will amend the bills accordingly.

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