Inside208

Revenue Sharing Cuts Outlined in Initial House/Senate Budget Plans

Posted on April 17, 2018 by Dene Westbrook

As the Legislature returned from their Spring Recess last week, initial subcommittee action on all but two Senate-originated budgets was completed.  Each of the budget subcommittee reports are now awaiting action before their respective full Appropriations committees – http://www.house.mi.gov/hfa/PDF/Bill%20Status.pdf.

The Senate General Government subcommittee met last week and reported their budget that includes revenue sharing.  The subcommittee’s report, drafted into Senate Bill 855,  matched the Governor’s recommendation, removing the 2.5% increase cities, villages, and townships received this year, resulting in a $6.2 million cut to statutory revenue sharing for the budget year that begins October first.  While the CVT revenue sharing line was reduced, the Senate version retained the counties current year 1% increase (that the Governor had also recommended removing) and added another 1% to the county revenue sharing line item.  This move was explained as a way to ensure “fairness and stability” across local unit types, since counties do not receive Constitutional revenue sharing payments.  Estimates for sales tax growth related to Constitutional payments anticipate an additional 3.1% next year for cities, villages, and townships, distributed on a per capita basis.  You can read the League’s testimony to the Senate subcommittee here – SenateGG.testimony.April2018.

The Senate’s proposal is a marked difference from the version that the House subcommittee reported prior to the spring break (http://blogs.mml.org/wp/inside208/2018/03/28/spring-break-prompts-action-on-state-budget-other-bills/).  The House version found in House Bill 5567 retained $3.1 million of this year’s increased amount, but concurred with the Governor’s recommendation to remove the county 1% increase in the current budget year.  Even with the House’s removal of this year’s 1% increase, county revenue sharing payments remain above 100% of full funding.

The full House Appropriations committee is scheduled to meet each day this week to consider their various subcommittee reports.  The full Senate Appropriations committee will follow suit as soon as their remaining subcommittee reports are finalized.

League members are urged to contact their State Senator and State Representative to remind them of the revenue sharing cuts that cities and villages have endured over the past decade and ask them to retain the current year statutory revenue sharing funding levels for cities, villages and townships as the baseline moving forward.

 

Chris Hackbarth is the League’s director of state & federal affairs. He can be reached at 517-908-0304 and chackbarth@mml.org.

 

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