Governor Snyder today unveiled his plans for handling the current year budget shortfall and the state’s 2016 fiscal year (FY16) budget. Recognizing the difficulty that the State is experiencing given the current revenue forecasts, the Michigan Municipal League appreciates that funding for local governments was not targeted for additional reductions, but does note that there were other areas of the budget that received additional funding or where investment in new programs were proposed.
The announced plan maintains statutory revenue sharing at currently budgeted levels throughout the remainder of this fiscal year. Constitutional payments, which automatically rise or fall based on sales tax receipts and only go to cities, villages and townships, are estimated to rise by 3% to $788 million for FY16. This growth represents a $23.8 million increase in the coming year. In addition, the Governor’s proposal continues the current year statutory revenue sharing scheme for cities, villages and townships into FY16 with a recommended $243 million.
The League continues to maintain that the state’s system of funding support for municipalities is broken and in need of reform and this budget proposal does not address that issue. However, considering the state predicts having $532.1 million in less revenue due to cashed-in business tax credits the League is encouraged that statutory revenue sharing remains whole and constitutional revenue sharing continues to increase.
Chris Hackbarth is the League’s director of state affairs. He can be reached at 517-908-0304 and [email protected]