Following the introduction last week of the 16-bill OPEB reform package, three additional bills were introduced in the House to create a structure that attempts to address the chronic under-funding of revenue sharing for local units of government.
Lead by chief sponsor, former Walker city mayor, Rep. Rob VerHeulen, House Bills 5314-5316 do three main things:
- Creates separate city, village, township (CVT), and county Revenue Sharing Trust funds to protect against future revenue sharing reductions. These trust funds would receive dollars earmarked directly from Michigan’s sales tax to provide the funding for statutory revenue sharing for CVTs based upon the current budget appropriation amount (approx $248 million for CVTs).
- Provides an initial attempt at increasing revenue sharing by growing the current statutory appropriation by $100 million over the next 20 years from the sales tax. The bills would divide these new funds ($5 million/year) equally between counties, cities, villages, and townships.
- Secures future Personal Property Tax (PPT) reimbursement revenue that is available above what is needed for 100% reimbursement, as an additional down payment on revenue sharing restoration.
The League’s Chris Hackbarth testified Tuesday about the bills in the House Competitiveness Committee along with officials from the Michigan Association of Counties and Michigan Townships Association.
The League supports the bill package in concept and continues to advocate for a plan that restores the revenue sharing cuts of the past decade and distributes dollars appropriately. The three bills were voted out of the House committee Tuesday and await action on the House floor.
Rep. VerHeulen issued a press release about the package and explained it would be funded through Michigan’s sales tax and would give a level of security to local communities in the case of an economic downturn.
“There have been compounding factors that have all led us to where we are at right now in areas across the state,” VerHeulen stated in the release. “Our communities face a funding crisis. They cannot make reliable payments into retirement systems for their employees, including police and fire, and money is often being diverted away from vital public services in an effort to keep up with funding those retirement benefit plans or other budget necessities.”
The bills could be considered in the full House by the end of the year.
Posted by Matt Bach, the League’s director of communications, on behalf of Chris Hackbarth. For details contact Hackbarth at [email protected].