Talent, Taxes, and Roads, Oh My!

Posted on March 2, 2018 by Dene Westbrook

Governor Snyder recently unveiled his “Marshall Plan” for talent. It’s designed to combat the more than 811,000 career openings that will need to be filled through 2024 in fields that are facing a talent shortage. The plan calls for a $100 million budget injection for a five-year work plan to go toward a mix of existing and new programs, as well as investments into scholarships, teachers, and career exploration for students.

The Governor and House and Senate leadership quickly came together following the recent budget presentation to settle the outstanding personal exemption income tax conflict that arose as a result of the new federal tax reforms.  Senate Bills 748 and 750 disconnect Michigan’s state income tax personal exemption from the federal income tax to ensure that Michigan’s state-level personal exemption is not inadvertently eliminated by the federal action.  Additionally, the Legislature agreed to an increase in the personal exemption up to $4900 by 2021…reducing GF/GP revenue by about $135 when fully implemented. No other proposed state tax credits or reductions were included, however the Governor did agree with the Speaker to speed up the phase out of the Driver Responsibility Fee program by eliminating these assessments at the end of the current fiscal year and forgoing the standard $100 driver license reinstatement fee for individuals with any remaining fines. These bills were all signed by the Governor this week.

State Affairs staff had a chance to testify before the House Local Government committee, as they reported the four-bill package (SBs 590-593) promoted by the League to address the unintended consequence on local debt limits from the new Personal Property Tax law.  This package is now awaiting final action before the full House of Representatives.

We were also able to testify in support of legislation that would reimburse local units for any costs related to the veteran tax exemption. The veteran exemption reimbursement hearing was testimony only, but the chair has indicated his support for the concept and additional committee deliberation is expected this year.

Final legislative action was also completed on SB 393, the Tax Increment Financing (TIF) reporting legislation that the League has worked on in conjunction with Sen Ken Horn. This bill is now on its way to the Governor for his signature.

The Senate Finance committee took quick action on a new bill, supported by the League, that would extend the sunset date for local units to use bonds to fund outstanding pension and/or OPEB obligations.  The current authorization is set to expire at the end of 2018.  Senate Bill 838 would extend the sunset through the end of 2020.  This bill is on the Senate floor awaiting further action.

Treasury distributed their anticipated “waiver” guidance yesterday to the communities that have been preliminarily designated as underfunded according to the newly implemented pension/OPEB reporting requirements.  Those communities that have been identified and contacted by Treasury will now have 45 days to submit a waiver application, should they choose to do so.

Finally, the House and Senate have given a thumbs-up to pump an additional $175 million in one-time General Fund money for road improvements this fiscal year (lapsed revenue from the most recent budget year). The Governor had announced this move as part of his upcoming budget year proposal, and the Legislature is advancing the proposal within the current year in an attempt to get these dollars into projects this construction season.  This move will result in an extra $38 million in one-time funding for cities and villages.  This funding is part of the current year supplemental appropriation, House Bill 4321, and is now on its way to the Governor for his expected signature.

Chris Hackbarth is the League’s director of state & federal affairs. He can be reached at 517-908-0304 and [email protected].







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