Monday, March 18 — Officials with the Michigan Municipal League, an advocacy group for local governments, say the governor and state Legislature need to reverse a decade-long trend of disinvesting in local governments.
Over the last 12 years, local governments in Michigan have lost $4.2 billion in state-shared revenue, said David Lossing, president of the Michigan Municipal League and mayor of Linden, Mich. Lossing led a media roundtable in downtown Lansing today as the League announced its legislative priorities for this year.
“Municipal governments have lost nearly $4.2 billion over the last 12 years, nearly $500 million in one year alone,” Lossing said. “So, the state has been disinvesting in local units of government for a long time.”
Lossing said the state should invest more in communities through personal property tax reform, additional revenue sharing and with transportation funding.
League officials say Gov. Rick Snyder’s proposed 2014 state budget has no proposed funding increases for statutory revenue sharing — money that is collected from the state sales tax and doled out to local governments to pay for services.
Along with lobbying the Legislature for more funding, the League has concerns about personal property tax legislation that passed in December’s lame duck session. The legislation would phase out taxes on equipment purchased by businesses starting in 2016. League officials say the legislation could cut local personal property tax revenue by up to 20 percent in some communities.
Although it’s been approved by the Legislature, the package of personal property tax reforms is contingent upon statewide voter approval in the August 2014 elections before they go into effect.
To replace personal property tax money to local governments, the legislation calls for an “essential services assessment,” which would be a special tax on businesses to pay for police and fire services.
But Samantha Harkin, Michigan Municipal League director of state affairs, said there are legal questions about the proposed assessment. She said businesses are already taxed for police and fire services as part of their real property taxes. If the personal property tax reform passes, communities will then be levying an additional essential services tax on top of that. Harkin said the League wanted to confirm that was legal before it comes up for a vote in August.
The League is also worried that Snyder’s proposed $1.2 billion in additional transportation funding won’t make its way to municipal governments to improve local roads and transportation services. Whether local governments will see a piece of the pie is something that “hasn’t been shared yet,” Lossing said.
“It’s not enough to have a conversation here in Lansing on commercial corridors,” said Nathan Tripplet, mayor pro tem of East Lansing. “We need to be talking about local streets. We need to be talking about public transit options. We need to be talking about non-motorized facilities. These are all things the Municipal League and our members have focused on for years because we recognize they are key to people’s ability to make our towns accessible and attractive places to live.”