Brighton City Council Grills State Lawmakers On Revenue Sharing
February 17, 2017
Two state lawmakers, who attended the Brighton City Council meeting Thursday night were told that the city needs more revenue sharing funds from the state or it could face bankruptcy if there is another recession.
State Senator Joe Hune and State Rep. Lana Theis attended the meeting and gave council a legislative update, but council used the occasion to complain that the city is having a difficult time recovering from the Great Recession of 2007-2009. Council Members Shawn Pipoly, Jim Bohn and Jon Emaus said that primarily due to cuts each year for the past several years in state revenue sharing, the city is having a difficult time recovering from the recession of 2007-2009. Emaus told the two lawmakers despite the fact that the state has recovered nicely from the recession, the city has had to pinch pennies to remain solvent.
State Rep. Theis admitted that when Proposal A and the Headlee Tax Limitation Amendment were conceived, then-state lawmakers didn’t anticipate the effects of a recession and its recovery. In other words, while property values and, therefore, property taxes could go down rapidly during a recession, property taxes would return very slowly to their formal levels once the recession was over. That’s because the Headlee Amendment, meant to prevent local governments from imposing wholesale tax increases, caps property tax increases at 5% a year or the cost of living increase – whichever of the two is lower. On top of that, over the last several years the state has significantly reduced the amount of revenue sharing it returns to local governments, while the cost of providing services to residents is steadily rising. Theis told council that the way to solve their dilemma would be to go for a constitutional amendment – most likely by way of a citizen-initiated ballot proposal.
The Michigan Municipal League estimates that the state reduced revenue sharing to local communities from 2003-2013 by $650 million, from $900 million down to $250 million. And the state has eliminated the personal property tax on businesses – another revenue loss for local governments.
Both Sen. Hune and Rep. Theis advised council to communicate their concerns with their Lansing offices and, if necessary, pass resolutions calling on the state to ease the burden on local governments. (TT)