Snyder also hopes to send extra aid to communities meeting ‘best practices’
By David Eggert
Associated Press
LANSING, Mich. (AP) — Local governments bore steep cuts in revenue-sharing payments from Michigan in the 2000s as sales tax collections lagged and lawmakers siphoned off money to deal with budget deficits.
Now as the economy recovers and the budget stabilizes, Gov. Rick Snyder — who himself once cut statutory shared revenue to cities and townships by a third — is proposing a 15 percent increase in the next budget. He wants to significantly boost payments to counties as well, giving 74 eligible counties their maximum funding instead of the 80 percent ceiling distributed this fiscal year.
The governor also recommends changing incentives he put in place that local governments must follow to get some of their money. And he hopes to send extra aid to communities meeting “best practices” or that struggle with violent crime, unemployment or are among more than 100 a year that have to submit a deficit-elimination plan to the state.
“It’s a little bit complicated, but we really wanted to recognize both the best and the most-challenged — and say let’s give some balancing towards those communities,” Snyder told reporters after proposing a $52.1 billion budget to lawmakers last week.
The Republican governor’s record on revenue sharing is mixed.
Under his proposed budget to begin in October, cities, townships and villages would share $765 million, or 3 percent more than this year, in sales tax revenue that the state constitution requires be given to them and over which Snyder and legislators have no control. They would get another $272 million, or 15 percent increase, in statutory payments if Snyder gets his way.
That’s a potential 30 percent bump from the first budget he signed. But because he and GOP lawmakers slashed more than $100 million in statutory revenue sharing that year to address a projected deficit, it’d still be 16 percent below the last budget signed by Democratic Gov. Jennifer Granholm.
Granholm herself consistently cut the payments in all but one of her eight years in office.
“It’s a statement that now that there’s more money, the governor wants to reinvest in communities,” said Samantha Harkins, state affairs director for the Michigan Municipal League.
She cautioned, however, that while funding is approaching what it was three years ago, “three years ago we were way behind.”
The Michigan Association of Counties said counties are in line to receive full revenue-sharing for the first time in 14 years, calling it “excellent news.”
Yet local officials have concerns about Snyder’s desire to change revenue-sharing incentives because they already don’t like the incentives in the first place. The Economic Vitality Incentive Program requires municipalities to put online a performance dashboard of their finances, show efforts to consolidate services and curb the cost of employee retirement plans and health care.
Harkins said she appreciates Snyder’s intent, but the time it takes for city officials to fill out state paperwork is “busy work” and, she said, state micromanagement leads to less efficient government. Snyder said his new formula would be population-based and “much simpler and cleaner.”
Rep. Sam Singh, D-East Lansing, said thousands of local police and firefighters lost their jobs since 2001 in part because of a major drop in revenue sharing. He wondered if the governor, who wants to eventually restore state police trooper levels to where they were in 2000 before Michigan’s economy faltered, would make a similar push to get revenue sharing back to its peak.
“I’m not seeing anything about how we help these local communities and revenue sharing get back to those pre-2000 levels so we can get those public safety officials back on the streets,” Singh said. “It’s great to have state police officers, but I will tell you that local communities — if they actually had those police officers and those firefighters — they would see a quality of life much differently than they do today.”
State budget director John Nixon said Snyder is proposing to set aside $5 million for a local law enforcement initiative and pointed to ongoing efforts by state police to target high-crime cities such as Detroit and Flint.
“The benchmark really is what can we control as an administration, what have we done since we started in 2011,” Nixon said.
