Budget framework gives hope for quick finish to FY27 state budget
Legislative leaders and the Whitmer administration reached agreement this week on a budget framework for the fiscal 2027 state budget, marking a significant step toward finalizing the spending plan.
No details have been released. Nor have House and Senate Appropriations subcommittee chairs received their budget “targets” to begin final negotiations.
The framework, however, provides optimism that the Legislature will complete work on the FY27 budget next week, allowing lawmakers to meet — or come very close to meeting — the statutory budget deadline of July 1. Once budget targets are distributed to the appropriations subcommittees, negotiations are expected to move quickly.
MAC will continue to monitor budget negotiations and provide updates as details become available.
For more information on MAC’s budget advocacy, contact Deena Bosworth at bosworth@micounties.org.
Counties win in U.S. Supreme Court on tax foreclosure sales
The U.S. Supreme Court this week rejected an argument that former property owners are constitutionally entitled to receive the fair market value of property following a tax foreclosure, a major win for counties.
In Pung v. Isabella County, the court sided with Isabella County on the two constitutional questions. While the decision represents an important victory, the litigation is not yet complete.
In its decision, the court held that the Constitution does not require fair market value as the measure of compensation, affirming that returning the proceeds from the tax foreclosure sale — rather than the property’s appraised value — does not, by itself, violate the Takings Clause.
Second, the Court held Michigan’s tax foreclosure system does not violate the Excessive Fines Clause of the Eighth Amendment. The plaintiff had argued that losing a home over a relatively small tax debt constituted an excessive fine, but the court disagreed.
Although the court ruled for the county on both issues it agreed to review, it vacated an appellate court decision and remanded the case back for further proceedings. The Sixth U.S. Circuit Court of Appeals must now determine whether the plaintiff properly preserved additional constitutional claims, including potential due process challenges, before those issues can be addressed.
MAC submitted an amicus brief in the case on behalf of Michigan counties and is pleased to have assisted in the positive outcome. The decision provides important clarification for counties, but because additional constitutional issues may still be litigated on remand, Pung remains an active case that MAC will continue to monitor.
For more information on this issue, contact Deena Bosworth at bosworth@micounties.org.
NACo seeks county voices to rescue ‘most significant’ federal housing legislation in decades
The fate of the “most significant federal housing legislation in decades” is in the balance after President Trump’s sudden refusal to sign a bipartisan bill on Wednesday, reports the National Association of Counties (NACo).
NACo asks county leaders to contact the White House in support of the 21st Century ROAD to Housing Act (H.R. 6644) and contact U.S. senators to oppose the SAVE America Act (S. 1383), which President Trump has demanded be passed in exchange for his signature on the housing legislation.
The 21st Century ROAD to Housing Act, which passed 89-10 in the Senate and 358-32 in the House, delivers real tools for counties:
- Standing authorization of the Community Development Block Grant-Disaster Recovery (CDBG-DR) program, ending years-long delays in disaster recovery funding after major disasters
- Expanded CDBG flexibility to fund new housing construction for the first time
- HOME program reforms to better address workforce housing gaps and support neighborhood infrastructure
- Streamlined environmental review processes for low-impact housing projects
- New flexibility for counties leading local homelessness response
NACo urges county leaders to take two immediate steps:
CONTACT THE WHITE HOUSE: Urge the president to sign the 21st Century ROAD to Housing Act without delay.
CONTACT YOUR U.S. SENATORS: Urge them to oppose the SAVE America Act. Counties administer elections across the country, and NACo has serious concerns that the bill imposes significant unfunded mandates and significant risk liabilities for county election offices, thereby shifting costs to local governments without providing the resources to meet them. (NACo remains open to bipartisan reforms that ensure our elections remain safe and secure.)
Housing tax credit bills pass the Michigan House
Bills that would create a new state housing opportunity tax credit to encourage the construction and preservation of affordable housing advanced out of the House this week in a bipartisan vote.
House Bill 5805, by Rep. Joseph Aragona (R-Macomb), and HB 5806, by Rep. Kristian Grant (D-Kent), establish a Michigan Housing Opportunity Tax Credit that will complement the existing federal Low-Income Housing Tax Credit program. Beginning in 2027, eligible affordable housing developments could receive state tax credits to help close financing gaps and make additional projects economically viable. The legislation includes dedicated support for the construction of new homes, preserving existing affordable housing and projects in rural areas.
Unlike other housing proposals that MAC opposed earlier this year, this package does not preempt local zoning authority or shift costs to local governments.
MAC supports HBs 5805-06 and has consistently supported policies that expand housing opportunities while respecting local control. Incentive-based programs such as this offer a practical approach to increasing the supply of affordable housing without undermining the authority of counties and other local governments.
The legislation now moves to the Senate.
For more information on this issue, contact Deena Bosworth at bosworth@micounties.org.
MAC pursues legislative fix for PILT payment raids
Responding to a request from MAC, Rep. Tom Kunse (R-Clare) has introduced legislation to correct a flaw in a 2022 law that’s allowing the state to shift the cost of its portion of lake level assessments onto counties.
The Michigan Department of Natural Resources (DNR) has historically been responsible for paying its share of lake level assessments on state-owned lands. However, counties often had to file lawsuits to compel payment.
In 2022, legislation was enacted to fix this by directing DNR to pay these assessments from its annual Payment in Lieu of Taxes (PILT) appropriation. This fix produced an unintended result. Rather than providing additional funding, DNR has been deducting the cost of its lake level assessments directly from the PILT payments owed to counties. The financial impact varies widely, from several thousand dollars per year to more than $100,000 in some counties.
House Bill 6105 would restore the Legislature’s original intent by ensuring DNR is responsible for its own lake level assessment obligations without reducing county PILT payments.
MAC is also pursuing a budget appropriation to reimburse counties for unpaid or improperly withheld lake level assessment payments from recent years. Initial discussions with lawmakers have been positive.
This is all part of a broader effort to ensure the state pays its fair share of special assessments. Last month, the House approved House Bill 4118, by Rep. Bill Schuette (R-Midland), which would require DNR to pay drain assessments on state-owned properties, just as the Michigan Department of Transportation already does today. That legislation, supported by MAC, is awaiting action in the Senate.
For more information on this issue, contact Deena Bosworth at bosworth@micounties.org.
Billions at stake in federal rule change on grants, NACo warns
The federal Office of Management and Budget (OMB) has published a proposed rule rewriting 2 CFR Part 200 (the Uniform Guidance), which would be the largest overhaul of federal grant rules since 2013. This rule governs every federal grant a county receives, covering public safety, transportation, housing, public health, emergency management and more. The public comment period closes July 13, 2026.
These rules govern $1.1 TRILLION in grants and will affect every county in the U.S.
To assist counties, the National Association of Counties (NACo) has developed an online resource hub and comprehensive analysis.
Among the key provisions at stake for counties are:
- New discretionary federal authority to terminate grant awards mid-program
- Expanded pre-award review requirements that could delay and deter grant applications
- Increased pass-through entity obligations and sub-recipient monitoring requirements
- Reclassification of Uniform Guidance from policy guidance to binding federal regulation
County officials are advised to use NACo’s template comment letter to submit formal comments, personalized with your county’s specific grant programs and local examples of how the proposed changes could affect service delivery and budgets.
Submit comments by July 13. Every county comment on the record strengthens NACo’s advocacy and ensures local government realities shape the final rule.
Podcast 83 team discusses brownfield changes, juvenile justice concerns
The Michigan Legislature is another week closer to a statutory deadline for approving a fiscal 2027 budget and it’s not clear what is going on, reported MAC’s Podcast 83 team in a new episode.
“What is the latest on the budget?” asked host Stephan Currie.
“What we’re hearing is that they worked really hard all weekend to come up with agreements on big items and funding,” replied Deena Bosworth. “Now, how far into the weeds do they get? We’re not quite sure.
“We know the governor was really pushing to have housing included in these budget negotiations. We know the speaker was really pushing to have property tax reform in these budget negotiations,” she continued. “We have advocated, and I think others have advocated, that these are huge policy discussions that really should not be part of the budget conversations.”
This week’s episode also touched on:
- Brownfield redevelopment changes: “So, counties, cities, townships and villages would be eligible for these grants or a low-interest loan program, kind of like a revolving fund through the state,” Bosworth explained. “Grants (would be) up to about $2 million each, unless it’s a huge transformational package or transformational site. But it would allow locals to do some environmental cleanup, some remediation and then prep it for redevelopment.”
- Indigent defense resources for juveniles: “This one’s a tough one for us,” Bosworth said. “House Bill 4070 expands the Michigan Indigent Defense Commission’s authority to make recommendations for youth indigents who are going through the process. … MAC is supportive of expanding MIDC to youth, but the state also has to pay for that. And we already know that we struggle with the authority of the Indigent Defense Commission, telling our counties what they can and can’t do within their facilities or their budget when it deals with dealing with indigent defendants. So, right now, we are opposed … because we don’t see where the state is necessarily going to allocate the funding necessary to implement it.”
For more details on these bills and others, watch the full episode, recorded on June 22, by clicking here or on the image above.
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MAC on road: Currie in Newaygo, opioids team in Colorado
Executive Director Stephan Currie was in Newaygo County on Wednesday to brief commissioners, including Chair Bryan Kolk, who also serves as MAC’s first vice president this year.
Last week, MAC’s opioid services duo of Amy Dolinky and Dan Kelly were in Denver to present their expertise at the National Opioid Settlement Conference. The presentation, “Building Transparency and Accountability through Competitive RFPs,” was given in partnership with the group Kansas Fights Addiction.
MAC announces holiday schedule for next week
MAC’s Lansing offices will be closed on July 3 and July 6 in observance of the 250th anniversary of the signing of the Declaration of Independence on July 4, 1776.
The next Legislative Update is expected to be released on Thursday, July 2.
Normal office hours will resume on Tuesday, July 7 at 8 a.m.
Celebrate Independence Day!
- Text of the Declaration of Independence
- Test your knowledge of the Declaration of Independence
- What life was like in 1776
Staff picks
- Data centers in Michigan: Evaluation of policy controversies regarding hyperscale data center development (Citizens Research Council of Michigan)
- Our cities were designed for the weather of the 1950s and ’60s (Wall Street Journal)
- State housing fund could finance middle-income projects as Senate approves eligibility expansion (Crain’s Detroit Business)
- M&M’s is getting rid of 2 iconic colors — but there’s a good reason why (Delish)