Governor’s Budget Recommendation Includes Key Items For Cities

Posted on February 11, 2021 by Dene Westbrook

Governor Whitmer released her budget recommendation for the upcoming Fiscal Year 21-22 budget cycle this morning and a number of items that the League has actively been advocating for were included in this morning’s announcement.  A full detail of the Executive Budget for FY2022 is available here.

Following last month’s Consensus Revenue Estimating Conference that revealed a rosier than expected state revenue picture, the state finds itself in a position where it has additional, one-time revenues from the prior budget year available to expend.  These revenues, coupled with other federal revenues that were made available at the end of 2020 provided the Administration with an ability to make a number of one-time investments across the state budget, including a $175 million partial restoration of the $350 million Budget Stabilization (Rainy Day) Fund withdrawal that was part of last year’s budget balancing efforts/

As part of today’s announcement, the following items are of primary interest to League members and will be actively supported by Municipal League staff:

  • City Income Tax Relief – $70 million of one-time General Fund dollars are recommended to provide relief to the 24 city income tax communities facing immediate revenue losses due to the pandemic.  These dollars are recommended to be spread proportionally to the 24 cities based upon their income tax revenues from 2019, with no city eligible for more than $25 million.
  • Revenue Sharing – the budget recommends a 2% increase in statutory revenue sharing, resulting in an additional $5.2 million for cities, villages, and townships.  This statutory increase is coupled with an estimated increase of 1.8% ($15.4 million) in per capita Constitutional revenue sharing payments.
    • Additionally, today’s proposal recommends creation of a new grant program in Treasury that would provide $5 million for first responder recruitment and training grants to local units of government.
  • Infrastructure – the Governor is recommending a series of investments in infrastructure spending:
    • $300 million of one-time funding targeted at approximately 120 local bridges in need of rehabilitation or replacement, including 59 that are currently closed to traffic. Construction on these bridges would be expected to begin in spring of 2022.
    • $290 million recommended for investment in wastewater protection infrastructure grants using remaining state bonding authority that focuses $235 million of that amount on sanitary sewer overflow prevention, $20 million towards removing direct and continuous raw sewage discharges, and $35 million to eliminate failing septic systems.
    • $40 million of one-time General Fund dollars are proposed for High Water Infrastructure Grants, with $30 million of that amount directed at specific infrastructure projects and $10 million designated for local government planning activities.  The infrastructure grants will provide funding for projects to address issues including flooding, coastal/shoreline erosion, storm water management, and others.
    • $15 million for the dam safety emergency fund.

Additional details, briefing, and presentation materials can be found here.

With today’s budget presentation, Appropriations subcommittees in both the House and the Senate will begin their review of the Governor’s recommendations.  Initial deliberation on the budget is expected to continue through the legislative spring break at the end of March, until concluding prior to the summer recess.  League members are encouraged to contact members of both Appropriations committees to urge their support for these measures.

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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