Counties would get 4% revenue sharing bump in governor’s plan

Michigan counties would see a 4 percent increase in the revenue sharing total in fiscal 2026 under a budget plan presented by Gov. Gretchen Whitmer’s administration this week.

Whitmer’s budget, which is $83.5 billion overall, $15.3 billion of that General Fund, leaves out key policy initiatives that local governments have been seeking.

The 4 percent increase in county revenue sharing would not apply to the entire revenue-sharing base from FY25. The administration has excluded the $30 million in equalization payments for counties that were first included in the FY25 budget, meaning these payments remain flat. Counties would still see just over $300 million in this plan. Notably absent from the proposal is the Revenue Sharing Trust Fund that MAC and other local government groups have long supported.

Public safety funding is another point of contention. The governor seeks $75 million for public safety and violence prevention, but counties are entirely excluded from eligibility — a move that MAC has criticized as shortsighted. Counties play a central role in law enforcement, courts, jails, diversion programs, specialty treatment courts and juvenile justice, particularly on behalf of townships that rely on county-level services. By shutting out counties, MAC argues the state is diluting the effectiveness of these critical funds.

Another missing element is a comprehensive road funding plan. However, speculation in Lansing suggests a plan could be released soon. With infrastructure needs mounting, many are eager to see how the governor plans to address road repairs and long-term funding solutions.

Overshadowing all budget discussions is the looming threat of a federal funding freeze, which could impact roughly 42 percent of the proposed budget. Lawmakers are watching intently to see how federal decisions might affect Michigan’s financial outlook.

As the budget process unfolds, MAC will continue pressing for adjustments to revenue sharing, public safety funding and road investments

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

 

Revenue sharing tops county priorities in Lansing in ’25

Creating a dedicated Revenue Sharing Trust Fund that reflects a true sharing of money between the state and local governments tops the list of legislative priorities for MAC’s 83 members in 2025.

Legislation for this long-needed reform won overwhelming bipartisan approval in the House in the last Legislature, but political squabbles in Lansing in December 2024 derailed it in the Senate. Despite this setback, counties remain committed to a necessary reform to ensure proper delivery of local public services, said MAC’s director of governmental affairs.

“Michigan’s 83 counties are unique in the current revenue sharing system in that every last dollar for counties must come through the annual budget process, making county revenue sharing particularly uncertain,” Deena Bosworth said. “And we don’t have to look back far to see how this jeopardizes proper funding. In the state’s fiscal 2024 budget process, county revenue sharing shrank from more than $285 million to $261 million, a 9 percent drop in a matter of months. This legislation is essential to ending this uncertainty and resulting disruption to local services.”

MAC also is among advocates for quick action to reform minimum wage and sick time rules that could leave counties scrambling to ensure proper staffing within financial constraints.

Other county goals for 2025 in Lansing are:

• Compensating Local Governments for Funds Diverted by the Veterans Property Tax Exemption
• Adopting a Permanent State Solution to Funding Michigan’s Courts
• Increasing Road Funding to Address Michigan’s Infrastructure Crisis

“So much was left on the legislative ‘table’ last year that the coming year could be one of great progress, if lawmakers from both parties can find their way toward common ground,” said MAC Executive Director Stephan Currie. “As always, our members, as locally elected leaders, simply want to partner with state officials to make government work more effectively for our communities.”

For more information on MAC’s advocacy work, visit www.micounties.org or contact Deena Bosworth at bosworth@micounties.org.

 

Michigan House passes minimum wage, sick time bills

Bills amending the state’s minimum wage and Earned Sick Time Act cleared the House this week with bipartisan support.

House Bills 4001 and 4002, by Rep. John Roth (R-Grand Traverse) and Rep. Jay DeBoyer (R-St. Clair), advanced by votes of 63-41 and 67-38, respectively. These bills were introduced and acted on quickly in the hopes of amending the acts before the Feb. 21 implementation date of the originally adopted legislation.  

Minimum wage revisions

HB 4001 proposes several amendments to Michigan’s minimum wage law, including adjustments to wage rates while maintaining the restaurant tip credit. Under this system, restaurant servers will continue to rely on tips to supplement their base pay, a move that has sparked debate among workers’ advocacy groups and business organizations. Proponents argue the bill preserves an industry standard that protects restaurants and small businesses from additional costs, and servers who testified believe their tips allow for higher income than the minimum wage would.

For all other employers, the minimum wage would increase on Feb. 21 to $12 per hour and go up 50 cents per year on Jan. 1 of each year through 2029 and then be tied to the Consumer Price Index average annual percentage change for the most recent five-year period. The bill also allows employers to pay workers under the age of 20, while training for the first 90 days, seventy-five percent of the states minimum wage and to pay employees under the age of 18, seventy-five percent of the states minimum wage. MAC supports HB 4001.

Overhauling the Earned Sick Time Act

HB 4002, which seeks to amend the Earned Sick Time Act introduces a range of changes aimed at balancing employee rights and employer flexibility. MAC supports the changes proposed in HB 4002. Key provisions of the bill include:

• Small Business Exemption: Businesses with fewer than 50 employees would be exempt from the law.
• Employee Eligibility: The bill defines eligible employees, exempting independent contractors, out-of-state employees, seasonal workers (25 weeks or fewer), part-time workers (25 hours or less per week), and variable-hour employees.
• Flexible Accrual Options: Employers would have two compliance pathways:
  • Frontloading Model: Employers can provide up to 72 hours of sick time at the start of the year, with no carryover requirements.
  • Accrual Model: Employees earn one hour of sick time for every 30 hours worked, with a cap of 72 hours annually. Carryover is limited to 72 hours unless the employer agrees to more and employers may opt to pay out unused time at year-end to avoid carryover.
• Streamlined Administration: Employers may integrate sick time tracking with existing payroll systems and meet compliance by offering time through a general PTO bank.
• Rate of Pay Clarifications: The bill specifies that sick time compensation excludes bonuses, tips, commissions, overtime pay, and holiday pay.
• Employer Procedures: Employers can establish customary notice, documentation requirements, and disciplinary actions for noncompliance with policies.
• Concurrency with Other Laws: Earned sick time can run concurrently with FMLA or ADA leave, and employees would have 15 days to provide necessary documentation.
• Separation Payouts: Employers can pay out accrued sick time upon separation to avoid reinstatement obligations if the employee returns.

Advocates argue these bills strike a balance between supporting Michigan’s workforce and protecting small businesses from regulatory overreach. The Senate versions of these bills are markedly different than the House version, though no hearings or movement have been held on those bills.

HBs 4001-02 now head to the Senate. For more information on this issue, contact Deena Bosworth at bosworth@micounties.org.

 

House committee advances key bills on minimum wage and Earned Sick Time Act

Two bills to revise the state’s minimum wage and Earned Sick Time Act (ESTA) advanced out of a House select committee this week.

House Bills 4001 and 4002, by Rep. John Roth (R-Grand Traverse) and Rep. Jay DeBoyer (R-St. Clair), are top priorities for House Republicans, who reclaimed the majority this legislative session.

The committee heard testimony on the bills in two separate hearings before voting to send them to the House floor.

HB 4001 amends Michigan’s minimum wage law to adjust to wage rates while maintaining the restaurant tip credit. Under this system, restaurant servers will continue to rely on tips to supplement their base pay, a move that has sparked debate among workers’ advocacy groups and business organizations. Proponents argue the bill preserves an industry standard that protects small businesses from additional costs, and servers who testified believe their tips allow for higher income than the minimum wage would. 

For all other employers, the minimum wage would increase on Feb. 21 to $12 per hour and go up 50 cent per year on Jan. 1 of each year through 2029 and then be tied to the Consumer Price Index average annual percentage change for the most recent 5-year period. MAC supports HB 4001.

HB 4002, which seeks to amend the Earned Sick Time Act set to take effect on Feb. 21, introduces a range of changes aimed at balancing employee rights and employer flexibility. MAC supports the changes proposed in HB 4002. Key provisions include:

• Businesses with fewer than 50 employees would be exempt from the law.
• The bill defines eligible employees, exempting independent contractors, out-of-state employees, seasonal workers (25 weeks or fewer), part-time workers (25 hours or less per week) and variable-hour employees.
• Employers would have two compliance pathways:
  • Provide up to 72 hours of sick time at the start of the year, with no carryover requirements.
  • Have employees earn one hour of sick time for every 30 hours worked, with a cap of 72 hours annually. Carryover is limited to 72 hours unless the employer agrees to more and employers may opt to pay out unused time at year-end to avoid carryover.
• Employers may integrate sick time tracking with existing payroll systems and meet compliance by offering time through a general PTO bank.
• The bill specifies that sick time compensation excludes bonuses, tips, commissions, overtime pay, and holiday pay.
• Employers can establish customary notice, documentation requirements and disciplinary actions for noncompliance with policies.
• Earned sick time can run concurrently with federal Family Medical Leave Act or Americans with Disabilities Act leave, and employees would have 15 days to provide necessary documentation.
• Employers can pay out accrued sick time upon separation to avoid reinstatement obligations if the employee returns.

Advocates argue these bills strike a balance between supporting Michigan’s workforce and protecting small businesses from regulatory overreach. The Senate versions of these bills are markedly different than the House version, though no hearings or movement have been held on those bills.

As HBs 4001-02 head to the House floor, all eyes will be on whether bipartisan consensus can be reached on these high-stakes issues. For more information on this issue, contact Deena Bosworth at bosworth@micounties.org.