Mayors and managers from some of the state’s largest cities met with the Michigan Municipal League’s lobbying staff in Lansing on Monday, January 13, 2014 to discuss how to best prioritize the new Partnership for Place policy agenda in the coming year.

Growing media attention to issues such as Detroit’s bankruptcy, the rising number of cities in receivership, and transportation infrastructure challenges show a heightened public awareness of the importance of thriving local communities to the state’s overall economic health.

“Unlike some previous years where politics have put cities on the side in some ways, this year our cities have the opportunity to be front and center,” said League Executive Director and CEO Dan Gilmartin. “When they’re looking at the state budget, sometimes community issues stay on the side as things like labor and social issues dominate the political headlines, but this year the things we care about will play a bigger role.”

Thriving communities are a key to Michigan’s long-term success and sustainability. If we are going to compete globally in the 21st century, then it is critical to create communities that can attract and retain talent and enterprise.

The Partnership for Place targets four key areas for action: Funding for the Future, Michigan in Motion, Place for Talent, and Strength in Structure. Strong and strategic policy action in each of these areas is crucial for Michigan’s economic growth and the development of places able to provide key services and amenities that contribute to a high quality of life.

To get the dialogue going, League Director of State Affairs Samantha Harkins offered these possible policy actions:

Funding:

• Increase sales tax by 1% to a total of 7% with the new 1% earmarked for local government.
• Expand the sales tax to include services.
• Allow locals to implement land value taxation to encourage appropriate use of space.
• Revise constitutional revenue sharing for new revenues to reflect service demands as well as population totals.
• Advocate for the state to create an optional OPEB pool.

Transportation:

• Restructure spending priorities through a new formula versus the current PA 51 system.
• Alternatively, amend PA 51 to prioritize spending of any new transportation revenues on systems in already developed areas.
• Place greater emphasis on transit development.
• Support gas tax increase (i.e. gas tax increase to 37 cents which includes parity for diesel gas, and would generate approximately $950 million.)

Talent:

• Advocate for wide range housing choices (affordable, rental, and owner occupied).
• Promote mixed use development including business, retail, restaurant, and housing.
• Forgive student loans on incremental basis.
• Fund and support internship programs which link new graduates with small and large businesses, nonprofits, and foundations.
• Invest in cultural arts.

Structure:

• Through new growth legislation, make Michigan laws more growth friendly to encourage more effective land use and efficient use of existing infrastructure. Getting developers to link into existing systems is also more environmentally friendly.

“I think we can all agree the biggest changes will come from large tax structural changes. The question to answer today is where do we want to put the emphasis and get the most impact over the next six months?” said Flint Mayor Dayne Walling.

The urban core leaders had varying ideas on the details, but all seemed to agree that the main focus for policy priorities in the coming year should be at the fundamental level of assuring that local communities have the revenue they need to survive and thrive. That includes: more local flexibility in revenue raising; changing the caps on the capture of taxes from rising property values; transportation and roads; more funds from revenue sharing; and dealing with the OPEB.

A number of members, including Lansing Mayor Virg Bernero and Wyoming City Manager Curtis Holt, stressed the need for local options and flexibility at the local level.

There was also a good deal of talk about land value taxation similar to a renaissance zone, which would encourage redevelopment by taxing less on improvements than the value of the land itself.

“Our cities have many contaminated old industrial sites where the owners who have leveled the property and never intend to sell because it would cost more to clean it up than they could ever sell it for. They are within city downtowns, and there is zero incentive to ever sell these vacant parcels. Right now the taxes are so low they can sit on it forever,” said Summer Minnick, the League’s Director of Policy Initiatives & Federal Affairs.

Such changes would incentivize redevelopment investment, said Harkins.

Another priority is to make a case for the use of the state’s announced $930 million budget surplus, such as transportation – not just for freeways and trunk lines, but for alternative modes of transportation and local roads that bring people into communities, not just through them.

“One question we all struggle with is we know where the demographics are going, what types of communities are more competitive now than they were 10 or 20 years ago, and what a competitive community will look like in the next 20 years. But that’s not what we’ve been building for the last 50,” said Gilmartin. “We’re trying to deal with potholes but also trying to create communities for people who maybe don’t live there yet. We often have to balance between building for tomorrow or sticking gum in the holes of today’s sinking ship.”

Read more about the Partnership for Place in the
January/February 2014 issue of The Review magazine.

Be part of the strategic conversation on implementing the Partnership for Place at the League’s Capital Conference, March 18-19 in Lansing.