Bills would boost state funding to townships, address Great Recession cuts

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Sen. Jeremy Moss of Southfield

Capital News Service 

LANSING – Pending bills in Michigan’s Senate would boost state funding to townships, allowing them to pay for services they otherwise couldn’t afford, advocates say.

The legislation would also create a trust fund to protect the increased state aid from cuts during future recessions.

Michigan’s 1,240 townships get their funding primarily from two sources: local property taxes and revenue sharing from the state.

Before 2001, every township was eligible for the state funding.

Cuts made in the wake of the 2008 financial crisis left just 34 townships with access to those funds, said Judy Allen, the government relations director for the Michigan Townships Association.

Other local governments, such as counties, cities and villages, have had their state funding largely restored since the Great Recession, Allen said. Townships have not.

Today, only 149 townships, about 12%, are eligible for revenue sharing, according to Treasury Department data.

Ishpeming Township Supervisor Jim Nankervis said his township has been “falling behind” since the Legislature “took away” sources of funding like revenue sharing.

The proposed increase could be used to pay for road repairs the Upper Peninsula township can’t otherwise afford, Nankervis said.

“They’re falling apart, a lot of cracks,” Nankervis said of local roads. “It’s time to get them resurfaced but, without the funds, it’s hard to go too far.”

The pending bills – which passed the House and are currently being discussed by a Senate committee – would pay for the increased local funding with a portion of sales tax revenue.

The legislation is also designed to shield communities from cuts during future recessions. That would be done with a trust fund, managed by the Treasury Department and financed with excess sales tax revenue.

The trust fund would “lock in” the additional local funding, said Sen. Jeremy Moss, D-Southfield, who sponsors one of the bills.

“Lansing actors think of local community budgets as an afterthought, and when there are holes in the state budget, that’s where they look to fill them,” Moss said. “So, the idea is to make it a consistent part of our state budget” with the trust fund.

Moss said he has been pushing for expanded revenue sharing since he joined the Legislature in 2015, inspired by his time on the Southfield City Council.

“Michigan is really alone in the nation in how there’s a lack of support in terms of sharing revenues back home to local communities,” Moss said.

Moss said he formed a “municipal caucus” of lawmakers with similar local government experience to push for the bills. He leads the group with Sen. Michael Webber, R-Rochester, and Reps. Mark Tisdel, R-Rochester Hills, and Amos O’Neal, D-Saginaw.

In November, a version of the revenue-sharing bills passed the House 106-4 with opposition from Republican Reps. Josh Schriver, R-Oxford, Steve Carra, R-Three Rivers, Neil Friske, R-Charlevoix, and Matt Maddock, R-Milford.

Schriver said in a statement that he opposes the legislation because of the trust fund, which he said “forces communities to take funds and share them instead of appropriating funds where needed.”

Allen, the Townships Association lobbyist, said she believed the opponents may not “understand all the details.”

“When lawmakers understand that this is more of an equity and fairness issue, we have not had any opposition,” Allen said.

The Senate Committee on Finance, Insurance and Consumer Protection is considering the bills.

Moss said he’s “optimistic” that the bills could pass the Senate in time for the next fiscal year that begins July 1.

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