This week the Senate and House revealed their respective General Government budgets. Both budgets included significant increases in revenue sharing and referenced major policy changes we have been pushing for. Specifically on the policy front, these budgets would utilize the trust fund concept that we have been pushing for as our top priority. Below are the specifics details of each budget proposal.

Senate:

• Creates a Revenue Sharing Trust Fund and dedicates 9.1% of the 4% sales tax to the fund. This proposal would result in allocating $662.4 million to statutory revenue sharing. This is $102.3 million more in on-going revenue than last year and a 20.5% increase in statutory revenue sharing.
• Cities, villages, and townships would receive $60.2 million more in on-going revenue than last year.
  • The $60.2 million increase would be distributed according to the statutory revenue sharing formula that was created in 1998. This was a three-factor formula that distributed revenue as follows: 1/3 inverse taxable value per capita, 1/3 unit type population, and 1/3 yield equalization.
  • Results in every city, village, and township receiving a statutory revenue sharing payment.
• Counties would receive $54.5 million more in on-going revenue than last year.
  • The $54.5 million increase would be distributed according to the statutory revenue sharing formula that was created in 1998 and 100% of the funds would be allocated based on an inverse taxable value per capita formula.

House:

• Creates a Revenue Sharing Trust Fund and dedicates 8% of the 4% sales tax to the fund. This would result in allocating $591.7 million to statutory revenue sharing. This is $42 million more in on-going revenue than last year and a 7.6% increase.
  • Cities, villages, and townships would receive 53.87% of the funds, equaling $318.7 million. This is an 8.6% increase.
  • Counties would receive 46n.13% of the of the funds, equaling $273 million. This is a 6.6% increase.
  • Results in every city, village, and township receiving a statutory revenue sharing payment.
• Creates a Public Safety and Violence Prevention Trust Fund and dedicates 1.5% of the 4% sales tax to the fund. This would result in $101.5 million in new on-going revenue for local units of government and would be distributed based on violent crime statistics.
• Both trust funds combined would result in allocating $693.2 million to local units of government. This is 143.5 million more in on-going revenue and a 26.1% increase in funding.

The budget proposals being put forth by the Senate and House are nothing short of tremendous news for our members. They both codify our number one policy objective of creating a Revenue Sharing Trust Fund, allocate over $100 million of new revenue to municipalities, and prioritize the important role our communities play in the success of Michigan.

While we are still in the early stages of the budget process, the House and Senate proposals create tremendous momentum for significant investment in every city, village, township, and county.  Stay tuned for more developments and information on how you can help as this process moves forward.

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