Counties Seek A Larger Piece of State Revenue Pie
Currently, revenue sharing dollars are appropriated to municipalities from the general fund, which Deena Bosworth, director of government affairs for the MAC, said isn’t keeping pace with the growth of state revenue.
Instead, Bosworth said the Association proposes the creation of a revenue sharing trust fund using a percentage of the state sales tax.
Money appropriated to the fund would stay there for distribution to counties, cities, villages and townships, as opposed to lapsing into the state general fund at the end of each fiscal year.
Funds would be split, with 50% going to county revenue sharing and 50% to revenue sharing in cities, villages and townships. Bosworth said this distribution method could potentially increase county revenue sharing in the first year by more than 40%.
“This legislation’s method of carving out a percentage of the sales tax for the fund is what revenue sharing was originally designed to do: share in the state’s revenue,” she said. “If sales tax revenue goes up, local allocations go up. If sales tax revenue falls, so do allocations, just like it does for constitutional revenue sharing for cities, villages and townships.”
Though Bosworth said the Association hasn’t made a recommendation on what percentage of the sales tax should go into the trust fund, the MAC was supportive of former Sen. Wayne Schmidt’s package that was introduced in 2022.
SB 1160 and SB 1161 automatically directed 10% of the money collected from the 4% piece of the state’s 6% sales tax to the trust fund at a cost of $710 million in FY ’24.
Schmidt said he settled on the 10% because it was a number more likely to last and not be cut down the line.
Those bills died in Senate Appropriations, but Bosworth said the Association has been fighting to improve county revenue sharing for decades, starting after a legislative deal during the Great Recession in 2002 that paused revenue sharing for counties in exchange for a temporary acceleration of property tax collections.
“It created this surplus when we accelerated the property tax collection, and each county was allowed to draw down on that surplus as a sum,” she said. “Once that account was exhausted, then we came back into the revenue sharing formula.”
Bosworth said counties ran dry at different times, and without inflationary increases, the result was a cut when they returned to the revenue sharing model.
In FY’23, MAC Communications and Marketing Director Derek Melot said the appropriation for revenue sharing in the last state budget was about $245 million yearly.
But Melot said look back to FY ’01, which he said was basically the last budget before “everything hit the fan,” take the revenue sharing appropriation and adjust it for inflation. He said if the state did nothing but adjust for inflation, the revenue sharing budget today would be closer to $308 million.
“Remember, that gap has existed year after year after year,” he said, “even when the state was sending us revenue sharing. They’ve been saving a fortune off of us.”
These cuts matter, Bosworth said, because revenue sharing is the most flexible form of state aid to counties and isn’t restricted to specific allocations, “so it can go to pay for pretty much anything that each individual county needs.”
Though revenue sharing is a smaller percentage of county income than property taxes, which make up 55% to 60% on average, Bosworth said tax breaks and fluctuations can still leave counties with less.
Pointing to Growth of Unions, AFL-CIO Wants Right to Work Repealed
"For nearly 40 years, politicians in Lansing have unjustly inserted themselves into our collective bargaining agreements, tipping the scales in favor of corporations and millionaires. But yesterday’s Bureau of Labor Statistics annual report proves the resilience and power of Michigan’s labor movement," said Ron Bieber, president of the Michigan AFL-CIO. "The growth in union membership demonstrates the urgent need for our pro-worker legislative majority to act upon the will of the people that elected them and restore their union freedoms and collective bargaining rights."
The Michigan AFL-CIO is the state’s largest labor organization, and it is calling on the Legislature to move quickly on bills that would repeal the state’s 2012 right-to-work law, which banned the mandatory payment of union dues or non-member agency fees.
Democrats have already introduced such legislation, with HB 4004 and HB 4005 and SB 5, and Republicans have vowed to work against them, calling efforts to repeal right-to-work "extreme."
Sen. Darrin Camilleri (D-Brownstown Township) is the sponsor for SB 5. He said the growth of unions demonstrates the need to repeal right-to-work laws, which he called "anti-union."
"Our new legislative leadership has the opportunity to take long-overdue action to remove existing restrictions and ensure workers are able to more freely negotiate the pay, benefits and protections they deserve," he said in a statement.
Other reports have shown that Michigan’s unions are operating with fewer member than they had a decade ago. In December, the Mackinac Center for Public Policy, which supported the passage of right-to-work laws, released an analysis showing that there were 143,000 fewer union members across the state’s 15 key unions, meaning that 26.5 percent fewer people are paying union dues now than they were in 2012.
The analysis from the Mackinac Center said that union membership dropped even as employment increased.
Still, liberal groups such as Progress Michigan have reported polls showing 42 percent of people surveyed supporting the repeal of right-to-work laws, with 26 percent opposing a repeal.
Conservative groups including Americans for Prosperity and the Freedom Fund have already announced campaigns against the repeal of right-to-work as Democrats took control of state government.
The AFL-CIO said in a press release that national support for unions is growing, though, citing a Gallup poll showing that 71 percent of Americans approve of labor unions, the highest level since 1965.
"With the resurgence of union organizing and Governor Gretchen Whitmer’s significant investment in job creation, Michigan’s labor movement in gaining momentum," the press release from the labor organization said.
Supreme Court Dismisses Whitmer Abortion Suit in Wake of Prop 3
The governor noted in a previous motion to withdraw a request to certify questions to the high court that voters have since passed Proposal 3 to codify reproductive rights into the Constitution.
Ms. Whitmer sued several county prosecutors to prevent them from reinforcing the 1930s ban following the U.S. Supreme Court’s decision to gut the Roe v. Wade precedent protecting abortion rights across the nation. The state’s existing ban would have become law again had Ms. Whitmer and others not acted through litigation, effectively holding the law at bay until voters had a say on Proposal 3 in 2022.
The governor asked that the questions Whitmer v. Linderman (MSC Docket No. 164256) be certified to the Michigan Supreme Court to get a blanket ruling on the constitutionality of the ban, but the bench only asked her to clarify what remedy she was seeking, and by doing so allowed the ballot initiative process to play out.
In an unsigned order issued Friday, the high court said Ms. Whitmer asked to withdraw the request on January 6, as the underlying case and appeal had been dropped and so denied the challenge as moot.
Justices of the Supreme Court remained mum as the case was working its way through the courts.
The litigation in state court was in its final appellate throes following injunctions preventing the law from being enforced, and the appellants had been waiting on word from the high court regarding a resolution.
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