Posts Tagged ‘local government’

 Gov. Snyder presented his Fiscal Year 2014 budget today with a guaranteed funding increase for cities, villages, and townships (CVTs), while again disproportionately cutting revenue sharing to county government.

“It’s disappointing that the state continues to punish counties by consistently cutting their revenue sources,” said Thomas Bardwell, President of the Michigan Association of Counties (M.A.C.) Board of Directors.  “What they fail to realize is that counties cannot continue to provide all the services the state mandates if there is no funding for those services.” Ignoring the statutory commitment to fund counties at the level required has become a habitual practice for the state.  Counties are already stretched to their financial limit, making it difficult for them to pay for the multitude of state mandated services including the courts, jails, 911, indigent defense, sheriffs, constitutional officers, elections and the public health system. CVTs have been provided a 4% budget increase, and though it appears that funding for counties remains flat compared to last year, three additional counties are scheduled to come back into the revenue sharing formula this year, which current funding levels do not account for. Counties have saved the state more than a billion dollars since 2005 when they gave up revenue sharing temporarily.  This was in an effort to help the state with its budget problem, and the state promised a return of that funding once reserves were depleted.  Counties will continue to help the state budget until the final county exhausts its reserve account well past the year 2020. The current model of mandating counties to deliver services on behalf of the state government without paying for those services is unsustainable.  Counties look forward to working with the governor and the legislature to make sure that mandated services are funded.
PPT is headed to the House floor for a vote this morning, with a new proposal from house republicans that would exempt all new personal property from January 1, 2013, on, with no reimbursement.  This would mean a virtual phase-out, with NO reimbursement to local governments. This is an URGENT call to action.  Please call your state representative to slow this down and not rush this through lame duck. Click here to find contact information for your legislators. You can reference the Legislative Update from 12-7-12 for more details on the current PPT proposal, on MAC’s website under “resources” then “publications”.
The MAC Education and Training Program has been designed to provide tools and information that facilitate creative, new, and innovative approaches from counties to prosper in the new and changing structure of county government. With easy to follow online courses, MAC offers technical, legal, and legislative expertise on a wide range of topics that are fundamental to county operations. MAC is currently offering “Open Meetings Act”, “County Finance 101 Series:  Introduction to Government Finance”, and the brand new “Michigan’s County Incentive Program (CIP) FY2013”. These learning courses are located on the MAC website and are free to MAC memberswho have registered for access to the site.  Registration for the site can be found on the home page.
MAC was invited to a special briefing in the Lt. Governor’s office to discuss his new plan for PPT Replacement.  MAC’s position on PPT Repeal has remained the same, we will support the repeal if we get full reimbursement through a guaranteed revenue source.  Lt. Governor Calley has heard our request and come up with a plan that may get counties 80% guaranteed reimbursement, but with the potential for additional reimbursement through a combination of a dedicated revenue source not subject to legislative appropriation and a special assessment to cover police, fire, and ambulatory services.
The basics of the repeal remain the same as they were when the bills passed out of the Senate.  All commercial and industrial personal property with a taxable value of $40,000 or less would be exempt from the tax beginning in 2014.  A new category of industrial personal property would be created to avoid giving certain industries, like wind turbines, the exemption.  This new category is called Eligible Manufacturing Personal Property.  The PPT exemptions for this category would be as follows: *         All new personal property bought after 12/31/2011 will be exempt as of 12/31/2015 *         All personal property that is 10 years old would be exempt as of 12/31/2015 and continue each year until all the property is either new or 10 years old to achieve full exemption. The reimbursement plan, although it meets some of our stated criteria, is not ideal.   MAC has been assured by the Lt. Governor that for those counties who have more than 2.5% of their property taxes coming from personal property tax, their reimbursement cannot go below 80% of their PPT loss.  Those less dependent on PPT (defined as having PPT revenue less than 2.5% of total property tax revenue) will not see any reimbursement.  This revenue would come from utilizing a portion of the State’s use tax.  This use tax money would be assessed by a new state-wide authority with broad powers and be distributed by the same entity, thus avoiding the legislature and the appropriations process.  We are likely to have significant concerns over the power being granted to the authority, but we are still evaluating the proposal. Counties would be able to make up more losses by placing a special Essential Services Assessment on industrial real property but only at a rate needed to replace 100% of lost PPT revenue that otherwise would have funded police and ambulance services from the County General Fund. On the surface this proposal appears slightly better than the version that passed out of the Senate, but we still need time to evaluate it.  We need to be especially careful that the lame duck legislature gets this right.  When talking with your legislators, please reiterate the fact that the Senate passed version does not provide a good solution,and that the Lt. Governor’s new proposal needs to be fully vetted and any concerns rectified before action is taken. This alert is an overview of what the plan is, but specific formulas for reimbursement or calculations have not yet been provided.  As we learn more about the proposal and the impact it will have on counties, we will update you. You can find more on the subject and how it will affect local government from these articles: http://www.mlive.com/opinion/kalamazoo/index.ssf/2012/11/legislators_cannot_eliminate_p.html#incart_river_default http://www.pressandguide.com/articles/2012/11/23/news/doc50afd57d2121b451047030.txt?viewmode=fullstory
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