Michigan counties will receive $221.4 million in revenue sharing payments from the state via a fiscal 2019 budget bill approved by a legislative conference committee this week. The full Legislature is expected to approve the plan next week and send to Gov. Rick Snyder.

The fiscal 2019 figure will be $1.3 million higher than the FY18 number.

“These figures have been unsettled for weeks,” said Deena Bosworth, MAC’s director of governmental affairs. “It’s important to remember the debate started in Lansing this year with the governor proposing a 1 percent cut from FY18 levels. We are now leaving the Legislature with a 0.5 percent increase, relative to FY18.

“On behalf of our members, we extend our appreciation to the members of the Appropriations Committees in both chambers for making this the fourth consecutive budget year with an increase in revenue sharing payments,” Bpsworth added.

Built into the revenue sharing figures is a $1 million in one-time appropriation that counties are directed to use toward pension or OPEB obligations or debt.

See county-by-county estimates for fiscal 2019.

Antrim, Keweenaw and Mackinac counties return to the formula in FY19 with partial-year payments. That leaves only Emmet and Leelanau still drawing from their Revenue Sharing Reserve Funds that began in 2004 as counties pulled ahead local property tax revenue in an agreement with the state to provide significant state budget relief by temporarily ending revenue sharing payments.

“We are pleased, obviously, that the Legislature has again increased the amount,” said Stephan Currie, MAC’s executive director. “However, as our members know all too well, the money committed is not nearly enough to cover the mandates the state has placed on counties for local public services. MAC will continue to educate legislators on that point and build on the momentum we have gained in recent years.”

In additional budget news:

Health, Human Services, Courts

• County hold harmless on foster care agency per diem is retained, which is an $8 million savings for counties. The budget implementation bill (SB 988) that is likely to pass next week will eliminate the sunset on the county hold harmless.
• $5.5 million for administrative rate payments and $9.9 million in per diem payments for unlicensed relative foster care providers per the Glisson federal court decision.
• Boilerplate language to require the Department of Health and Human Services (DHHS) to maintain the federal foster care appeals process in place as of Sept. 30, 2017, rather than the DHHS proposed policy to remove ability for locals to formally appeal.
• $4.5 million General Fund (GF) increase for essential local public health services and $4.4 million from the General Fund for emerging public health threats.
• $5.5 million GFT for non-Medicaid mental health services to hold harmless Community Mental Health agencies (CMHs) that may be hurt by the new FY19 GF funding formula.
• $11 million GF increase for growth in caseload for Healthy Michigan plan mental health services and substance use disorder services.
• Section 298 language was removed that would have allowed Medicaid Health Plans in the pilot regions to receive all the Medicaid funds without contracting with the CMH in that pilot community.
• $750,000 in a one-time increase specialty court grants.
• $700,000 retained to comply with the juvenile lifer without parole court decision. The executive budget removed this, which would have shifted cost to counties. Legislators later revised the recommendation to include the funds.

Transportation

• Additional $121.3 million to local road agencies, bringing total local road agency funding to $1.37 billion for fiscal 2019. County road agencies will receive $77.9 million of the increase.
• $300 million in one-time GF distributions to road agencies, of which counties will receive $117.3 million. This yields a combined increase of $195.2 million year-over-year for county roads.
• Additional $2.5 million for local transit operating costs to the 81 local public transit agencies.

Agriculture

• Additional $525,700 for grants to eligible county fairs, shows and expositions.

A contingent of Michigan county officials, led by MAC Board President Matthew Bierlein of Tuscola County and other board officers, made a round of visits to Michigan’s congressional delegation on Capitol Hill during the 2018 National Association of Counties Legislative Conference this week.

Taking a break from the policy and service workshops at the conference, Michigan leaders met with Reps. Jack Bergman, Debbie Dingell, Bill Huizenga, John Moolenaar, David Trott, Fred Upton and Tim Walberg on Tuesday, March 6. Michigan leaders also attended a special briefing from the state’s U.S. senators, Gary Peters and Debbie Stabenow, to cap the day.

“These visits are a key part of the annual NACo event in D.C.,” said Stephan Currie, executive director of MAC. “The pace of public life is such that it’s rare when you can put so many county leaders in front of our federal representatives at one time. You have to grab those opportunities whenever you can.”

County leaders attending this year’s NACo event included:

Vaughn Begick (Bay County), Alisha Bell (Wayne County), Roger  Bergman (Ottawa County), Matthew Bierlein (Tuscola County), Ken Borton (Otsego County), David Bowman (Oakland County), Emily Brieve (Kent County), Carol Crawford (Grand Traverse County), Greg DeJong (Ottawa County), Donald Disselkoen (Ottawa County),  Jerry Doucette (Alger County), Veronica Klinefelt (Macomb County), Philip Kuyers (Ottawa County), Sarah Lightner (Jackson County), Daniel Mahoney (Jackson County), Christian Marcus (Antrim County), Stephanie Moore (Kalamazoo County), Michael Overton (Jackson County), Stan Ponstein (Kent County), Julie Rogers (Kalamazoo County), Richard Schmidt (Manistee County), Michael Seals (Kalamazoo County), Eugene Smith (Iron County), Joe Stevens (Dickinson County), Jim Storey (Allegan County), Mary   Swanson (Kent County), Jim Talen (Kent County),  Shelley Taub (Oakland County), Al Vanderberg (Ottawa County) Matthew Van Zetten (Kent County) Gary Woronchak (Wayne County) and Helaine Zack (Oakland County).

State leaders have put Michigan, county leaders and themselves in a difficult position after years of failing to invest resources in local services, MAC’s Deena Bosworth told a Bloomberg News reporter this week.

In a story detailing the coming crunch on Michigan’s General Fund, Bosworth said, “You can cut services, you can say you’re no longer going to have a court system, foster care. But there’s really not a lot more you can do without more revenue.’’

Bosworth was speaking in the context of the limitations in Proposal A and Headlee that have made it virtually impossible for counties to recover the property revenue crash of the Great Recession, even as Michigan property values are recovering.

“We’re running at 60 percent of what tax revenues were 10 years ago,’’ Bosworth said, referring to the inflation-adjusted revenue figures for a typical county in Michigan.

To read the entire piece, reproduced with permission from Daily Tax Report (Copyright 2017 by The Bureau of National Affairs, http://www.bna.com), click here.

A new documentary from students at Northern Michigan University tackles the “Dark Stores” property valuation crisis in Michigan. “Boxed In” is an ambitious project, in that it seeks to explain an extraordinarily complicated tax and public policy issue.

Take a look.

But recent coverage from Bloomberg News highlights why this is so important for the entire community.

“Wal-Mart’s out-of-control crime problem is driving police crazy” focuses mainly on the travails of the Tulsa, Okla., Police Department, but the dynamic exists across Michigan:

“Big Box” retailers make big demands on local public services.

“Last year police were called to the store and three other Tulsa Wal-Marts just under 2,000 times,” the story noted.

An analysis of 22 Wal-Mart outlets in Michigan has found that their per-square-foot (PSF) property valuations ranged from $5.26 in Sault Ste. Marie to $33.94 in Wayne County’s Woodhaven.

For comparison, the average PSF value for Wal-Marts in its home state of Arkansas is $53.04.

This is the reality of the Dark Stores valuation loophole that “Big Box” retailers like Wal-Mart have been exploiting since 2013 to vastly reduce their values.

And, since lower property values equal lower property taxes, local governments have lost at least $100 million in revenue since 2013 due to this loophole.

Nevertheless, retailers — and residents — expect local governments to continue to provide those services vital to a safe, high-quality community. Michigan counties, for one example, spent $1.5 billion on security-related tasks in 2015 alone.

So, if Big Box retailers put demands on public services, yet figure out a way not to pay their fair share of the local property taxes to fund them, who is left holding the bill?

Yep, homeowners and small businesses.

Rep. Dave Maturen (R-Kalamazoo County) drafted House Bill 5578 to ensure a fair and reasonable system of valuing property based on its “highest and best use” in the marketplace. The bill soared through the Michigan House last spring on a 97-11 vote and awaits action by the Michigan Senate this fall.

We can’t think of a better epilogue to “Boxed In’s” tale than the enactment of HB 5578 before 2016 ends.

MAC Executive Director Tim McGuire used an appearance on “The Big Show” with Michael Patrick Shiels to make the case that only new revenue will propel the state out of its roads crisis.

“”Do we want dirt roads? … The point is, if you are going to fix the roads, you have to raise revenue. … We have to raise some revenues to pay for the roads. It’s just gotta be done,” McGuire said.

MAC’s Board of Directors, made up of county commissioners from across the state, has long supported a tax increase to generate the new dollars necessary to jump-start maintenance on our crumbling roads.