Spring Break Prompts Action on State Budget, Other Bills

Posted on March 28, 2018 by Dene Westbrook

Last week was a busy week in Lansing as the Legislature began reporting budget bills from their respective Appropriations subcommittees and held hearings on a host of different pieces of legislation in preparation for their spring recess. Following last Thursday’s action, they are now on break until April 10.

State Budget
The House General Government budget (HB 5567) was reported from the House subcommittee with only a partial restoration of the Governor’s recommended cut to statutory revenue sharing.  The Governor did not include any of the $6.2 million increase that we achieved in the current year’s budget and the House version only retains $3.1 million of that amount.  The Senate budget counterpart met Thursday morning to hear additional testimony from state departments and is scheduled to report their version of the budget the week they return from break.  We continue to work with the Senate subcommittee members to retain the current year level of statutory revenue sharing as the baseline, preserving the full $6.2 million.

The House Licensing & Regulatory Affairs subcommittee also reported their version of that budget (HB 5574), following the Governor’s dollar recommendation Fire Protection Grants and Indigent Defense Commission local reimbursements. The budget that was reported concurred with the dollar recommendations for both of these programs, but to effectuate the proposed changes, separate policy bills will need to be moved. Fire protection grant dollars have been removed from the budget in anticipation of the Governor’s alternative proposal to have those dollars increased and then come out of the Personal Property Tax excess distributions. We continue to push back against the Governor’s proposed indigent defense reimbursement changes and are working to illustrate that opposition within the forthcoming Senate version of this budget…also scheduled to be reported following the break.

Both the House and Senate subcommittees reported their versions of the transportation budget (HB 5572 & SB 865), following the Governor’s recommendation with a couple of exceptions.  The House version removes funding for some MDOT FTEs and dedicates those dollars to road projects, while the Senate’s version reduces Transportation Economic Development Fund dollars and directs that revenue into road projects.

Full Appropriations Committee action on all of these initial budget versions is expected before the end of April as they attempt to complete the budget process before the summer recess.

Sexual Assault Package
The Senate moved their sexual assault package over to the House with overwhelming support last week. This package includes a significant change in the governmental immunity statute, SB 877, that is concerning for local units of government based upon the potential for unintended consequences and a lengthy extension of the statute of limitations for certain sexual crimes. We continue to work with the League’s risk management team, other organizations, and with legislators and leadership in the House and Senate to mitigate any unintended consequences.

Transportation and Water Asset Management Package
The transportation and water asset management package was also reported from House committee and out of the House.  House Bills 5335, 5406 & 5408 create an overarching MI Infrastructure Council and coordinate a new Water Asset Management Council with the existing Transportation Asset Management Council.  We expressed a number of concerns with the bills as introduced, but continue to work with the sponsors and the Administration to address these issues as the bills continue to evolve.

Debt Limit Correction Bills Signed
Earlier this week, the Governor signed Public Acts 86-89 of 2018.  This four bill package has been pushed by the League to correct the situation a number of communities have encountered with how the new personal property tax system interacts with their statutory debt limit.  As personal property continues to phase off of local tax rolls, this loss of assessed value was negatively impacting the calculation of city, village, and charter township debt limits.  The new law allows the assessed value equivalent of each community’s personal property tax reimbursement payment to be included in that debt limit calculation.  A special thank you goes out to Senators Jim Stamas (Midland) and Mike Shirkey (Clarklake), for their assistance in introducing and moving this legislation.

OPEB/Pension Reporting Requirements Webinar
Finally, as Treasury continues to refine its implementation of the new OPEB/pension reporting requirements, the League teamed up with Treasury staff and experts with Plante Moran to host a webinar on March 27 for those communities that have been preliminarily identified by Treasury as having an underfunded pension or retire health insurance offering. More than 100 local units of government and/or local authorities received notification from Treasury that their January submissions requires further review.  Each of the notified entities now have 45 days to seek a waiver or proceed to the Corrective Action Plan phase of the new law’s requirements. The webinar was designed to assist our impacted members by providing background on the new system, answer any questions about why they have been identified, and assist them with information on how to apply for a waiver and what the next steps of the new law will entail.

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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