Inside208

State Budget Invests Significant Resources in Michigan’s People and Communities

Posted on July 1, 2022 by John LaMacchia

Early this morning the legislature voted to approve the school aid budget (SB 845) and omnibus budget (HB 5783) for the upcoming fiscal year. Both bills passed overwhelmingly. Senate Bill 845 was adopted in the Senate 35-2 and 99-7 in the House. House Bill 5783 passed the Senate unanimously and 97-9 in the House. In total, nearly $76 billion in state and federal funds were allocated across state departments and to various special projects.

This budget includes significant resources for League priorities and are a direct reflection of the hard work and dedication of our members to consistently talk about the importance of funding our communities through our SaveMICity campaign. This work and commitment to educating legislators on municipal finance and the importance of investing in great places was evident in this budget. We saw one of the largest increases in revenue sharing in the last two decades resulting in a 6% increase totaling $16.0 million to fund a 5.0% ongoing and 1.0% one-time increase.

Additionally, the legislature dedicated three quarters of a billion dollars to help address one of the biggest strains on local government budgets, unfunded pension liability. These funds will ensure every municipal pension system in this state will be at least 60% funded. Simply put, this is a historic level of investment in local government. 11th hour negotiations however did remove $250 million in funding for those systems that were 60% funded and above. We did not support this change and were at the Capitol until the very end fighting for its inclusion, and the fight won’t stop there.

There remains approximately $7 billion in unspent funds that we will now turn our attention and efforts towards and continue to push for equitably investing those remaining resources to ensure Michigan is an attractive place for talent and supports thriving communities in ways that benefit everyone.

To view the League’s statement on the budget click here. We been able to identify the key highlights of the budget and those are listed below.

Agriculture:

  • Office of Rural Development – (Grants): $3 million in general fund for a new program, administered by the Office of Rural Development, to provide grants to rural communities, related to economic development, workforce development, affordable housing, infrastructure, education, and high-speed internet access.

Environment Great Lakes and Energy:

  • Community Technical, Managerial, and Financial Support for Lead Line Replacement: $48 million in general fund for local grants to replace lead service lines and upgrade water treatment facilities; preference for disadvantaged communities.
  • Environmental Cleanup and Redevelopment Program – Legacy Cleanups: Establishes new program by appropriating $27.6 million from the Cleanup and Redevelopment Fund to cleanup legacy contaminated sites.
  • Municipal Assistance: Appropriates $1.4 million and authorizes 4 FTE (full-time equivalent) positions to increase loan processing staff and access to federal water infrastructure loans for local communities.

Labor and Economic Opportunity:

  • Michigan Reconnect Program: $55 million
  • Going Pro: $55 million
  • Office of Future Mobility and Electrification: $4 million in general fund for the Office of Future Mobility and Electrification to support state efforts in mobility initiative.
  • Michigan Enhancement Grants: $205.3 million in general fund for 100 individual Michigan Enhancement Grants.
  • Economic Development and Workforce Grants: $251.5 million in general fund for Economic Development and Workforce Grants.
  • Michigan Infrastructure Grants: $212.8 million in general fund for 17 individual Michigan Infrastructure Grants
  • Nonprofit Relief Grants: $50 million in federal Coronavirus State Fiscal Relief funding for nonprofit relief grants to nonprofit community service organizations.
  • Arts and Cultural Grants: $13 in general fund for arts and cultural grants.
  • Blight Elimination Program: $75 million in general fund for one-time funding for a Blight Elimination Program.

Treasury:

  • Statutory Revenue Sharing: $16 million to fund a 5 percent ongoing and 1 percent one-time increase.
  • Local Municipal Pension Principal Payment Grants: $750 million in general fund for a grant program to award funding to qualified units of government to deposit into their qualified retirement systems with certain stipulations.
  • Recreational Marihuana Grants: Payments to locals are estimated at $50.6 million for FY 2022-23.

Transportation:

  • Local Road Agencies: $1.9 billion as the estimated Michigan Transportation Fund (MTF) distribution to local road agencies (county road commissions, and cities and villages), $87.6 million more than the current year. This reflects the Act 51 distribution of estimated MTF revenue from motor fuel and vehicle registration taxes as well as local road agency share of $600 million earmarked for road and bridge programs in the Income Tax Act.
    • Distribution to Local Road Agencies
      • Cities/Villages increase: $31,374,000
      • County Road Commissions increase: $56,271,700
  • Local Federal Aid for Road and Bridge Construction: Earmarks certain federal-aid highway funds for local road agencies and increases funding by $94.4 million because of the federal Bipartisan Infrastructure Law (BIL).
  • Technical Assistance, Planning, and Bipartisan Infrastructure Law Match Grants: $25 million in general fund to support grants for local units of government and planning organization under the federal Bipartisan Infrastructure Law.

John LaMacchia is the League’s director of state & federal affairs. He can be reached at jlamacchia@mml.org or 517-908-0303.

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