Municipalities get 7 percent more funding

 Local officials also pleased with elimination of strings attached to some revenue-sharing money

By David Eggert
Associated Press

LANSING, Mich. (AP) — Local governments will receive a 7 percent boost in revenue-sharing payments from Michigan next fiscal year, less than what Gov. Rick Snyder had originally proposed, under a budget plan that won preliminary approval Monday in the state Legislature.

Overall shared revenue for cities, counties, townships and villages will go up about $84 million, or 7.4 percent, to roughly $1.2 billion — less than the 9.7 percent increase in the governor’s proposal. Lawmakers trimmed the spending increase after revenue estimates were revised downward in May.

The boost was still welcome news for officials whose local governments bore steep cuts during the last decade and a half as sales tax collections lagged and legislators siphoned off money to deal with budget deficits.

Local officials also were pleased with the elimination of strings that have been attached to getting some money in recent years — such as showing efforts to consolidate services and curb the cost of employee retirement plans and health care.

“That has been so administratively burdensome for our members,” said Samantha Harkins, state affairs director for the Michigan Municipal League. “They were already doing what they had to cut costs because they had to, given the financial situation all these years.”

Under the $50 billion-plus state budget starting in October — and expected to win final passage this week in the Republican-led House and Senate — cities, townships and villages will share $758 million, 2.4 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 will get another $249 million, or 5.5 percent more, in statutory payments — less than Snyder’s proposed 15 percent boost.

An additional $8 million will be set aside for “financially distressed” cities and townships. Legislators agreed with Snyder’s call to significantly boost payments to counties, giving 74 eligible counties their maximum funding instead of the 80 percent ceiling distributed this budget year.

The plan approved 5-0 by a legislative conference committee also includes $50 million for Michigan’s film incentives program, the same as the past two years. The GOP governor had proposed cutting it in half to $25 million, the level it was in his first budget after he scaled back incentives that were among the most lucrative in the U.S.

Republican Rep. Earl Poleski of Jackson, who chairs the House general government budget subcommittee, said he was pleased to start moving to a population-based formula that will make about 100 more communities eligible for revenue sharing.

“All in all, it builds a little more equity into what we had all viewed to be a really inequitable method of distributing revenue sharing,” he said. “These are the larger townships, any over 7,500 (residents). Those are the sorts of units that provide urban-like services — police, fire, parks.”

The statutory shared revenue is a nearly 16 percent bump from the first budget Snyder signed. But because he and lawmakers slashed more than $100 million, or one-third, in statutory revenue that year to address a projected deficit, it is roughly 22 percent below the last budget signed by Gov. Jennifer Granholm.