A package of bills to create a Revenue Sharing Trust Fund to support Michigan’s cities, villages, townships and counties have been introduced in the Legislature. Senate Bills 182 and 183 sponsored by Senator Michael Webber (R-Rochester Hills) and Senator Jeremy Moss (D-Southfield) respectively, and House Bills 4274 and 4275 sponsored by Representative Amos O’Neal (D-Saginaw) and Representative Mark Tisdel (R-Rochester Hills) respectively, would establish a “Revenue Sharing Trust Fund” in the Michigan Department of Treasury.

Through this trust fund concept, Michigan would dedicate a portion of general sales tax revenue to a restricted fund for the purposes of distributing those resources to cities, villages, townships, and counties. To create the fund, these bills would amend the Michigan Trust Fund Act and the General Sales Tax Act.

We have long desired to fully fund and protect revenue sharing under the law and these bills would go a long way to preserving resources that are currently being used to fund revenue sharing. Through the concept of a “Revenue Sharing Trust Fund” we can dedicate general sales tax revenue into a restricted fund for the purposes of distributing those resources to cities, villages, townships, and counties. Below is a more detailed analysis of each bill.

Amend the Michigan Trust Fund Act: SB 183 and HB 4274

• Establishes a “Revenue Sharing Trust Fund” in the Department of Treasury beginning in October of 2023
• Money would be deposited into the trust fund as required by the general sales tax act.
• Any funds in the trust fund at the end of the fiscal year would not lapse.
• The trust fund would be funded annually with $528,026,200 million in sales tax revenue.
  • $282,219,200 million would be dedicated to cities, villages, and townships.
    • This amount is equal to the funds appropriated to CVTs in the FY 22/23 budget.
    • Funds would be distributed to each city, village, and township in the same proportion that each was eligible to receive in FY22/23.
  • $245,806,300 million would be dedicated to counties.
    • This amount is equal to the funds appropriated to counties in the FY 22/23 budget.
    • Funds would be distributed to each county in the same proportion that each was eligible to receive in FY22/23.
  • Any funds deposited into the trust fund in future fiscal years in excess of $528,026,200.00 shall be apportioned by the state legislature and distributed to cities, villages, townships, and counties.
  • Requires the governor and state budget director to include this funding in their annual budget that is submitted to the legislature as required by the Constitution.

Amend the General Sales Tax Act: SB 182 and HB 4275

• Beginning in October of 2023, the Department of Treasury would be required every other month to deposit at least $88,004,367 million of the money received and collected from the rate of 4% sales tax into the revenue sharing trust fund.

Ultimately, these bills would require a statutory change by the legislature to reduce funding below current levels. It is this statutory protection, in the form of the trust fund, that creates the distinction from how we fund revenue sharing today and it being subject only to the annual appropriations process.

Should these bills pass, it would be a significant step forward in preserving resources for local units of government that can be used to provide services, invest in infrastructure, improve quality if live, and attract talent and business.

To view the League’s press release with quotes from each of the sponsors, please click here.

John LaMacchia is the League’s director of state & federal affairs. He can be reached at [email protected] or 517-908-0303.