Traverse City Record-Eagle

Michigan

June 10, 2014

Michigan gets 7 percent more funding

LANSING (AP) — Local governments will receive a seven percent boost in revenue-sharing payments from Michigan next fiscal year but that is not as much funding as Gov. Rick Snyder initially proposed under a budget plan preliminarily approved by lawmakers on Monday.

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 Legislature — 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.

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