Governor to unveil plans for local government reform, revenue sharing on Monday
Michigan Gov. Rick Snyder's much-anticipated message on community development and local government reform is expected to take place Monday morning, his office confirmed today.
Snyder plans to unveil details of his plans, which include restructuring state revenue sharing for local communities, during a 9:30 a.m. press conference inside Grand Rapids City Hall.
Local leaders are waiting anxiously to find out what Snyder will propose. Snyder already delivered a harsh blow to local officials across Michigan last month when he unveiled a state budget proposal calling for deep cuts in funding for municipalities.
Gov. Rick Snyder, center, is joined by state Treasurer Andy Dillon, left, and senior advisor Dick Posthumus during a press conference in Ann Arbor prior to taking office.
Angela J. Cesere | AnnArbor.com
Snyder proposes a complete elimination of nearly $300 million in statutory revenue sharing payments for cities, villages and townships in the fiscal year that starts Oct. 1.
Taking the place of those payments, under Snyder's plan, would be a new incentive-based revenue sharing program that would make a lesser, $200-million pot of money available to cities, villages and townships that meet certain standards and adopt "best practices."
Snyder is expected to offer more details on Monday about how the new program would reward municipalities for working to reduce employee compensation, collaborate and consolidate services, and be more transparent about spending. He said recently that his plan would reward communities that already have made strides in those areas.
State Rep. Jeff Irwin, D-Ann Arbor, said he hasn't heard any more than that. He said he's hoping Snyder will stay true to his word and properly reward communities that already have made progress in the area of intergovernmental cooperation.
"I haven't heard any details about what he's going to propose specifically, but I know many people are on the edge of their chairs to find out what exactly he means by this incentive-based revenue-sharing model," Irwin said. "It could be a good idea and it could be set up in ways that benefit communities like Ann Arbor or Washtenaw County that have worked hard to consolidate services. But I don't know the details. I'm interested to see them."
A spokesperson for Snyder could not be reached for comment.
Essentially, Snyder's state budget proposal equates to a $92.1 million — or nearly a one-third — reduction in statutory revenue-sharing funding. The move will impact hundreds of local units of government across Michigan, including Ann Arbor and Ypsilanti.
Snyder noted there still would be a $25.5 million or 4 percent increase — for a total pot of $659 million — in constitutionally protected revenue sharing payments to local units of government next year. That's based on estimated sales tax collections.
A 60-page copy of Snyder's executive recommendation for revenue sharing reductions shows Ann Arbor would lose $1.7 million — or 18.3 percent of its total payments — when balancing the elimination of statutory payments with a slight increase in constitutional payments. Ypsilanti would lose nearly $1.2 million, or about 44.3 percent of its total payments.
The city of Saline would lose $124,447, Milan would lose $50,490, Chelsea would lose $62,898, and Ypsilanti Township would lose $447,047, the document shows.
How much of that money each individual community could potentially earn back depends on what performance metrics Snyder lays out on Monday.
Ann Arbor officials say if Snyder is going to take away revenue sharing dollars, the state should give local communities back the power to levy local sales taxes to make up for the losses.
The Washtenaw County Board of Commissioners held a special two-hour working session meeting Thursday night on the topic of intergovernmental cooperation. Representatives of the the cities of Ypsilanti and Saline and Ann Arbor and Salem townships participated in the meeting and expressed interest in a renewed emphasis on finding ways to collaborate.
"The meeting was absolutely phenomenal," said County Commissioner Yousef Rabhi, D-Ann Arbor, chairman of the working session. "We had a great discussion about the potential for collaboration, the reason behind collaboration, and some ideas even came out. It was a great discussion, especially given there have been strained relations between the county and different local units of government. This was an opportunity for us to reach out."
Rabhi said he called Snyder's office to let his staff know about the meeting. He noted that a video of the meeting has been posted to the county's website.
Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's e-mail newsletters.
Comments
Edward R Murrow's Ghost
Sun, Mar 20, 2011 : 5:20 p.m.
"Let's see, the Governor has not even announced what he is going to send to the State House and Senate. We don't know what form it will take." So his much ballyhooed budget proposal, about which he has spoken frequently and which is available on his website, doesn't represent what he intends to do? And, if that is the case, what does that make our dear Governor? Gee, is this really the best defense of the governor that can be made--a defense that amounts to telling us that the governor might have by lying to us? I'm certain that he appreciates that defense. Good Night and Good Luck
DonBee
Mon, Mar 21, 2011 : 2:15 a.m.
No, it was not a defense, only a comment that folks seem to be keyed up with no real facts. Yes, there are ideas on his website, yes, I suspect he will include some of them. But, could they be modified based on input from many others in the state? I would think so, but I am sure you already know what is going on and what is wrong with the Governor. What I want to see is the process work, the bills debated and modified on the floor of the House and the Senate. Both sides working together to make a better state. I do not expect that the budget or this bill will make it through the process without changes.
John Q
Sun, Mar 20, 2011 : 2:43 a.m.
"We have way too many units of Government and 20,000 more government workers than we did in 1997. 1 out 8 people employed in Michigan works for the Government." There's no way there's 20,000 more local and state government workers than there was in 1997. Show us the numbers.
DonBee
Sun, Mar 20, 2011 : 12:01 p.m.
I did in another thread. The US Bureau of the Census does an every 5 year government worker census. We still have (at all levels) more than 20,000 local and state government workers than we did in 1997. We have fewer than we did in 2007, but more than in 1997.
DonBee
Sun, Mar 20, 2011 : 12:04 a.m.
Let's see, the Governor has not even announced what he is going to send to the State House and Senate. We don't know what form it will take. The author of the article is already using fighting words like "harsh blow" in his article. We all knew things were going to have to changes. Governor Granholm and her team wrung out every nickel that the Federal Government would offer and spent them all. They used every accounting trick in the books to stretch it further. They scorched the earth. Now the new Governor has a $700 million dollar unfunded mandate from the "Health Care Reform Bill" and hundreds of millions in unfunded pension liability. So he should just bury his head in the sand and kick the can down the road? The budget he proposed has little or no chance of making it through unchanged. The metrics he proposes will also have little or no chance. If you want a change talk to your senator and house members. Get them to participate in a compromise. Dogma gets you nowhere.
average joe
Sat, Mar 19, 2011 : 11:33 p.m.
Good point 1bit- Has anyone done a study or 'educated guess' on how much the state is losing in sales tax on internet purchases? Seems like we could figure out how to get these lost funds forwarded to the state where the buyer resides. It shouldn't be that difficult, & would 'level the playing field' for those businesses that have infrastruture here in the state.
1bit
Sun, Mar 20, 2011 : 3:19 a.m.
joe: Texas has estimated about $250 million in lost revenue. California estimates about $1.1 billion. Ultimately, the point is that people are shopping online so they 'don't have to pay the sales tax'. Well, technically, they do have to pay the tax but they just aren't reporting it. Here are some links that you may be interested in: <a href="http://online.wsj.com/article/SB10001424052748704396504576204791377862836.html?mod=ITP_marketplace_0" rel='nofollow'>http://online.wsj.com/article/SB10001424052748704396504576204791377862836.html?mod=ITP_marketplace_0</a> <a href="http://www.businessweek.com/magazine/content/08_24/b4088000835814.htm" rel='nofollow'>http://www.businessweek.com/magazine/content/08_24/b4088000835814.htm</a> <a href="http://articles.sfgate.com/2011-03-13/business/28684991_1_sales-tax-online-holiday-sales-amazon" rel='nofollow'>http://articles.sfgate.com/2011-03-13/business/28684991_1_sales-tax-online-holiday-sales-amazon</a> <a href="http://www.enewspf.com/opinion/21098-governor-quinn-forget-amazoncom-sign-the-bill-raise-my-sales-tax.html" rel='nofollow'>http://www.enewspf.com/opinion/21098-governor-quinn-forget-amazoncom-sign-the-bill-raise-my-sales-tax.html</a> Time magazine also had a recent article.
1bit
Sat, Mar 19, 2011 : 9:04 p.m.
Encouraging and incentivizing "best practices" is something we should all want. You may disagree with what exactly constitutes a "best practice" and that is really where you want your voice to be heard. Ranting against expecting quality or return on investment for money provided is pointless. With that said, we need more revenue as well. Rather than levying new sales taxes, I would suggest collecting sales taxes from those who should be paying it, but are not. Namely, internet purchases from Amazon and eBay. This is a big deal and there is potentially quite a bit of revenue there. That TV you bought online and got free shipping? Yes, you technically needed to report it to the State of Michigan and pay the sales tax if they didn't charge it to you. Did you do that?
Fat Bill
Sat, Mar 19, 2011 : 6:52 p.m.
This is nothing that hasn't been done in other states for years. Take, for example, 9-1-1 money. In Oregon, Washington, and several other states, the state gets the revenue from 9-1-1 tax on the telephone lines, and is happy to share it at the county level, so long as the counties utilize a county-wide or regional system that meets certain operational standards. As other revenue sources dwindle, turf becomes less important than finding a way to cooperate and move 9-1-1 costs out of the general fund.
Lisa
Sat, Mar 19, 2011 : 7:11 p.m.
Bill, What you describe from Oregon is: "If you start to do A, we will provide X dollars." Michigan removed the ability for local communities/districts to increase their revenue and removed some sources of revenue. In exchange, the state promised to provide equitable funding of the same level. But the state has cut its revenue through tax cuts and now says it can't pay the funds it promised. So they cut money to schools and local communities putting them in financial jeopardy. If the state would stop giving tax cuts it can't afford, it could pay out its obligations to local communities. If the state chooses not to do that, it should return the ability to impose a local sales tax and the ability for school districts to increase their property taxes.
Stephen Landes
Sat, Mar 19, 2011 : 3:54 p.m.
Congratulations to the Washtenaw County Board of Commissioners for taking action, in advance of the actual presentation of the Governor's proposal, to discuss cooperation and collaboration. That is the kind of thinking that will benefit all of us. Now the Board needs to follow through regardless of the Governor's proposal -- work together and look for opportunities to be more efficient. I believe that the challenge approach can inspire local units of government to find efficiencies in operations through collaboration and that the sum of state funding and reduced operating costs will be greater than the money available under the old formula. This proposal at least as it has been described so far is a new way of doing business that rewards creativity at the local level instead of just handing out money from the State level. The whole State of Michigan needs to try something new because what we have been doing hasn't worked. Continuing to do what we have always done may be comfortable because we understand the system. Change is hard, but the results of hard work far outweigh doing what is easy and complaining about it.
deb
Sat, Mar 19, 2011 : 3:11 p.m.
Not to be a jerk, but if the state is going to take money form the city. The city should stop providing the state services in its municipality... fire service to U of M. BUDGET BALANCED IN THE CITY OF ANN ARBOR
glacialerratic
Sat, Mar 19, 2011 : 3:03 p.m.
Snyder's a venture capital cultist. And capital is the operative word in his world-view. Authority rests with the investor, who buys and sells ideas and the people who develop them. The venture capitalist is the new mandarin who doles out investment finance to pleading entrepreneurs who pitch their ideas before the court. Snyder's ideas for re-inventing Michigan, of changing the culture, are cut from the same authoritarian mode. Local governments will pitch ideas to Lansing, and investment decisions will be made by Snyder and his well-paid officials who will determine and reward the winners. Snyder is blessed with a remarkable blandness that hides a truly pernicious and reactionary view of the purpose and conduct of government.
Bogie
Sat, Mar 19, 2011 : 3:01 p.m.
Wow! I guess we didn't want any change. I don't have the answers, but it was well documented, that Michigan has one of the worst business climates. The class warfare doesn't work, when the wealthy leave.
Lisa
Sat, Mar 19, 2011 : 12:15 p.m.
The state has taken away the ability for communities to raise funds for local schools. The state has taken away the ability for communities to raise funds through a local sales tax. The state has taken away the ability for communities to raise funds through increasing property taxes even when home values soared. The state did all of this and in every case promised to fairly share its revenue, to provide equivalent funding that local communities lost. Now, the state is creating an artificial financial crises by refusing to raise taxes, by cutting taxes on those who can most afford to pay them and by withholding the funding they promised when they curtailed the abilities of local communities to fund themselves. Now that the state has created this artificial crisis, Gov. Snyder has decided that communities and school districts in crisis should be taken over by emergency managers... ie., for profit companies. This is highly disturbing.
DonBee
Sat, Mar 19, 2011 : 11:58 p.m.
So Lisa, the local government can raise franchise fees on phones, cable, electricity, gas, etc. without state or voter approval. They can raise water, sewage, and parking fees again without approval. By my count I pay about $300 a year in franchise fees, about 3x what I did a few years ago. Few people actually read their bills and see the franchise fees, the larger companies actually hide them in the bill.
Lisa
Sat, Mar 19, 2011 : 7:17 p.m.
The state took away the ability to raise taxes. If your home increases in value 10% a year, your taxes can only go up by 5% a year. That costs local communities revenue. If you want to pass a millage for schools, you have to pass it at the county level... individual school districts can't put it for a vote in their own communities. The state took away the ability for communities to impose a local sales tax but promised to share the money it collected from sales tax... now it says it won't share. The state needs to meet its obligations or it needs to let local communities decide how much to tax themselves.
Mike
Sat, Mar 19, 2011 : 6:44 p.m.
The starte did not take away the ability to raise taxes, it just made it so people actually get to vote on wheher they want their millage increased or not. Taxation without representation is what you are talking about; I think England tried that here a few years ago.
Edward R Murrow's Ghost
Sat, Mar 19, 2011 : 1:14 p.m.
You've got it, Lisa. That's the game that's being played. Yes, we're going to reinvent Michigan by creating an artificial crisis, thereby driving dozens if not hundreds of municipalities and school districts into financial crisis. So this must be how he "fixed" Gateway? Good Night and Good Luck
Lisa
Sat, Mar 19, 2011 : 11:44 a.m.
I'm confused, Governor Snyder. You expect cities to 'compete' for money they had been promised in law years ago and one of the rules is that they must use 'best practices' which is defined in this article as cutting employee costs. Did you use 'best practices' in raising the salaries of all the people you brought into the state government with you? Because many have salaries 25% or more above what their predecessor made. Why is it good to raise the compensation of your friends and bad to even maintain compensation of our middle and lower class public sector workers? You tell us that we are all in it together but you cut taxes for business, you increase compensation for your friends while forcing everyone else to make due with less. How is everyone in it together? It really appears you are simply taking from those with no political power and giving it to those who have political power. That won't help Michigan.
DonBee
Sat, Mar 19, 2011 : 11:54 p.m.
Statutory payments have to be renewed in each budget, where the constitutional ones do not. So Lisa, there is no promise that the money will be there year to year. Additionally the last 8 years has seen many changes to what the dollars get applied to. Governor Granholm made many changes to the programs over her two terms. We have way too many units of Government and 20,000 more government workers than we did in 1997. 1 out 8 people employed in Michigan works for the Government.
David Briegel
Sat, Mar 19, 2011 : 12:07 p.m.
"Best Practice" means Slick gets to decide the meaning of best practice. Shared sacrifice means everyone except the elite better guard their wallets!
Peter Jameson
Sat, Mar 19, 2011 : 7:31 a.m.
moral of the story....hippies don't vote in midterm elections.
Monica R-W
Sat, Mar 19, 2011 : 6:48 a.m.
Join into the movement and Nerd Gov. Snyder will be gone before early next year! <a href="http://www.firericksnyder.org" rel='nofollow'>http://www.firericksnyder.org</a>
Mr. Ed
Sat, Mar 19, 2011 : 2:35 a.m.
I heard the Gov is giving Mi to China.
Awakened
Sat, Mar 19, 2011 : 12:15 p.m.
Don't worry. They won't take it. It isn't a good enough risk for China.
tommy_t
Sat, Mar 19, 2011 : 3 a.m.
Not yet - they have to pass his bill first then ship the money and jobs.
Dante Marcos
Sat, Mar 19, 2011 : 12:28 a.m.
"Reinvest Michigan" There are lots of people in Wichita and Manhattan who would love a piece. And imagine how much better Ann Arbor Public Schools would be for our children if they were owned and administered by Ann Arbor Public Schools LLC, of White Rock, Nevada.
Edward R Murrow's Ghost
Sun, Mar 20, 2011 : 12:09 p.m.
DB: That's the brilliance of the Snyder agenda. He doesn't do it the way the clown in Wisconsin did it. He'll get the EFM to do it. Wow!! No "F" Got me on that one!! That, of course, is a MAJOR component of the law--certainly, by far an away, its most important and far-reaching aspect--a game changer I should have seen the minute I read the legislation. Except, sort of like your maintaining that A2 teachers could cash in their sick time on retirement, you're wrong. How do I know? Because I've actually read the legislation. You should, too. <a href="http://www.legislature.mi.gov/documents/2011-2012/billintroduced/House/htm/2011-HIB-4177.htm" rel='nofollow'>http://www.legislature.mi.gov/documents/2011-2012/billintroduced/House/htm/2011-HIB-4177.htm</a> And thanks for telling me what I know. I didn't know I knew it until you told me I knew it. Because, gee, a way to solve that problem is for the state to take out liability policies for the EFM the way non-profits (e.g., unions) have liability policies for their leaders. But, no, much easier to turn government over to companies. Good Night and Good Luck
DonBee
Sun, Mar 20, 2011 : 11:57 a.m.
EMG - You and I both know that companies are allowed because there is no limit to the liability to the law on the financial manager. So if you do it as an individual, you end up putting everything you own on the line, your house, your car, your retirement. With a corporate entity your personal assets are not on the line if some group decides to take you to court. I would never consider being an EM (no more F in the new law) with all my assets on the line, no way no how. (Not that I want to be one anyway). As to crushing unions, I have not seen any behavior from Governor Snyder to indicate that his goal. Sorry, if you want union crushing, go to Wisconsin, Ohio or New Jersey.
Edward R Murrow's Ghost
Sun, Mar 20, 2011 : 2:59 a.m.
Don Bee: The legislation permits it. It is not out-of-hand ridiculous. And the governor's budget will creates crises in dozens if not hundreds of school districts and municipalities. The 18th trigger in the law ("just because") could easily be applied to AAPS given its projected deficit. Maybe your crystal ball can predict the future. Mine cannot. But I do know that there was a reason that the new EFM law permits companies to be named as EFMs rather than a single person. And as for Mr. Bobb and charter schools: <a href="http://www.nytimes.com/2011/03/14/education/14winerip.html?src=recg" rel='nofollow'>http://www.nytimes.com/2011/03/14/education/14winerip.html?src=recg</a> Taxpayer dollars going to charter schools in Detroit whose test scores are no better or are worse than those of the public schools. Nothing accomplished but the transfer of taxpayer wealth to private companies. That and the crushing of unions. The Snyder agenda. Good Night and Good Luck
DonBee
Sat, Mar 19, 2011 : 11:50 p.m.
EMG - You and I both know that the likelihood of this happening is slim to none. Yes, Robert Bobb is seriously talking about turning 41 schools over to charter companies, but in Ann Arbor? Let's get real.
Edward R Murrow's Ghost
Sat, Mar 19, 2011 : 1:13 a.m.
"ridiculous, you cannot be serious ?" You, apparently, have not read the legislation. Not only is it possible, but likely. Good Night and Good Luck
snoopdog
Sat, Mar 19, 2011 : 12:51 a.m.
ridiculous, you cannot be serious ? Good Day
Elle Kaye
Fri, Mar 18, 2011 : 11:51 p.m.
Has anybody asked who these Emergency Managers are? The qualifications spelled out in the bill are quite vague. "Must have a college degree." They've gone through some sort of training session put together earlier, since the first, and possibly the second groups have completed the program. I'd like to know how they're trained so quickly to know all the right things to make all the bad things better. (for the citizens, I mean) Oh yeah, they don't have all those pesky civil rights, contractual obligation, or other laws and limitations to be concerned with. Their only purpose is to slash and burn. I took a look at the list of cities and small towns on the qualifying list. Who isn't there? And why does the emergency fiscal manager the final arbiter on all curriculum in the schools or state universities situated in the troubled towns? Could it possibly be this isn't about the budget???
DonBee
Sat, Mar 19, 2011 : 11:48 p.m.
Elle Kaye - So far as anyone knows for sure, there is no army of Emergency Managers out there. If the Detroit School Board had not fought Governor Grandholm's choice for Emergency Financial Manager, I doubt a new law would have been passed. The Detroit paper today had a story about the judge in the case pulling his injunction against Bob Bobb. Sorry the Democrats fighting Democrats caused the new bill. Let's hope no one needs to use it.
Mike
Sat, Mar 19, 2011 : 6:41 p.m.
Don't mismanage your municipality and you wan't have to worry about it.
Awakened
Sat, Mar 19, 2011 : 12:14 p.m.
I believe I meet the qualifications. I'm appying.
johnnya2
Fri, Mar 18, 2011 : 11:13 p.m.
So Republicans scream about Obama for federal take over of things, but applaud this idiot for taking money AND control away from local government. On top of it all, the LOCAL government can not constitutionally raise more revenue with extra sales tax, or do much on property tax due to the Headlee amendment. Basically, Rick Snyder, as promised, is running the state like a CEO. He wants what he says to go, and do not question it. THAT is what CEO's do. Please explain how this guy thinks he knows what a "peerformance metric" is for the UP versus the city of Detroit, versus Warren? I guess in Ricks world we could just have one giant state and no local governments at all. Who needs cities. Why not just make regional classrooms. We can put 111k in UM stadium with one teacher, Another 80k in Spartan stadium and maybe some more in Ford Field.
DonBee
Sat, Mar 19, 2011 : 11:45 p.m.
No control has been taken from the local governments Johnnya2, none at all. As to money, there is no more in the state budget. Want to change that? Go down to the County Clerk's office and file a petition, then get, oh, about 900,000 signatures.
Lisa
Sat, Mar 19, 2011 : 1:13 p.m.
Awakened, The state took away the ability of local governments to raise funds and promised to provide the same amount of funding instead. Snyder is, after the fact, imposing strings on money promised years ago. Either the state needs to honor its commitment OR it needs to return the ability to raise revenue to local governments.
Awakened
Sat, Mar 19, 2011 : 12:13 p.m.
Anytime someone gives you money there are strings. Bank loans and employment all come with obligations and strings. The same for local government taking loans, grants, and revenue from the State and the Feds. If you don't want the strings don't take the money.
snoopdog
Sat, Mar 19, 2011 : 12:49 a.m.
Name calling will get you no where . Rick Snyder is anything but an "idiot". Good Day
Linda Peck
Fri, Mar 18, 2011 : 10:39 p.m.
We've been had.
DonBee
Sat, Mar 19, 2011 : 11:43 p.m.
Linda - If you followed the news at all, you knew this was going to be painful, for everyone. Get used to it. If the cuts are not deep enough this year, there will be more next.
Mike
Sat, Mar 19, 2011 : 6:41 p.m.
We were had when Granholm started her spending spree. Time to clean up the mess.
snoopdog
Sat, Mar 19, 2011 : 12:46 a.m.
No we have not, the Rickster is going to bring this state back to the glory it once had by getting rid of parasitic and bloodsucking unions and special interests. Good Day
1bigbud
Fri, Mar 18, 2011 : 10:36 p.m.
Don't Complain I voted did you -Ya snooze ya loose Seya in 4 years or not
snoopdog
Sat, Mar 19, 2011 : 12:43 a.m.
Yep, I voted and I could not be happier ! Good Day
bugjuice
Fri, Mar 18, 2011 : 10:26 p.m.
I'd bet that Roger Fraser is one of Snyder's primary advisors on this matter.
katie
Fri, Mar 18, 2011 : 10:23 p.m.
Snyder wants to take over municipalities that are in financial trouble, unincorporate those municipalities and run them himself, or even hire private companies to run them. I guess that the cutting of funds to said municipalities makes this takeover more likely, since more will be in financial trouble. He will then increase taxes for seniors and the poor, while giving an equivalent amount to businesses. There is no budget crisis. There is only taking from the middle class and poor and giving to the rich.
DonBee
Sat, Mar 19, 2011 : 11:42 p.m.
Let's see over the prior two years the state ate its way through all the Federal Stimulus money, saving none. Then the Health Care Reform Bill dumped a $700 million dollar medicaid hole in the budget, and then the Federal Constitution prohibits the state from printing money. "Houston we have a problem"
Mike
Sat, Mar 19, 2011 : 6:40 p.m.
There is no budget crisis? That's news to me.