House action encourages local officials

July 15, 2011
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While some local public officials have expressed apprehension about the future of consolidation efforts due to the One Kent Coalition’s desire to merge Kent County with the city of Grand Rapids, they have also found a bit of reassurance regarding the sharing of services from action taken by the state House.

A package of four bills the House approved, HB 4309-4312, would amend a number of state laws that relate to consolidating municipal services, which public officials said have stood as a barrier for decades.

According to a House fiscal analysis, when two or more cities want to share, say, fire services in a metro area, the bills would eliminate existing provisions that require labor agreements to be recognized, that personnel of the new fire unit all have the same seniority and benefits, or require those personnel and their beneficiaries to have the same pension systems and benefits. Another change is any increase in benefits would have to be picked up by employees.

“We’ve cleared that one,” said Kentwood Mayor Richard Root, who chairs the Legislative Committee of the Grand Valley Metro Council. He also said the council’s legislative goals are becoming fewer as state lawmakers have begun filling those requests following years of not taking action.

Root said one of the changes the package makes to Public Act 312, a 1969 statute that requires binding arbitration when cities reach an impasse in negotiations with police and fire unions, is major. The new bills allow an arbitrator to include a city’s ability to pay in reaching a decision.

“That has become a game-changer,” said Root.

GVMC Executive Director Don Stypula noted that the House package levels the playing field for units to share services.

The sponsors of the four bills are State Reps. Eileen Kowall, R-White Lake; Cindy Denby, R-Hardy Township; Paul Opsommer, R-Dewitt; and Thomas Hooker, R-Byron Center.

“Our local governments need every tool we can give them to get things moving in the right direction, and the updated Urban Cooperation Act is one of those tools,” said Hooker in a release.

“Making consolidation truly practical can have substantial benefits across the board, and now municipalities interested in consolidating services will be able to do so efficiently,” he said. Hooker added that Gov. Rick Snyder has expressed support for the House bills, which are now in the state Senate. But State Sen. Rick Jones, R-Grand Ledge, has also introduced a Senate bill that would amend the 42-year-old statute.

Earlier legislation that would have repealed PA 312 rather than amend it hasn’t made its way out of a House Committee. The bill, HB 4205, was introduced by State Rep. Joe Haveman, R-Holland.

“At a time of fiscal crisis in our state, with many communities close to receivership, we must find ways to free the hands of local elected officials from outdated and costly statutes and regulation such as this,” said Haveman.

“Binding arbitration results in incremental increases to benefits and pay that are leading many of our municipalities toward bankruptcy. It’s just not appropriate to continue using a system that damages a city’s finances and compounds the tax burden on residents,” he added.

“We’re likely looking at September for a Municipal Partnership Act,” said Stypula.

But September could also bring some bad news to council members; that’s when Gov. Snyder is expected to unveil his plans for the state’s personal property tax. Erasing it, as many think he will suggest, would cost counties and municipalities hundreds of millions of dollars in revenue annually, but would reduce business taxes even further.

“It will be a tremendous tax break for businesses, when they’ve already gotten a tax break,” said Root of the governor’s tax system that will begin saving state businesses nearly $1.8 billion a year starting next year. Snyder said removing the PPT should be revenue neutral.

“But if that goes away, how do you replace it?” asked Root. “I don’t think it would be possible to go back to citizens and ask for two more mills.”

In an effort to find an answer to that question, Stypula has been meeting with members of the Grand Rapids Area Chamber of Commerce in an attempt to find a suitable revenue source to replace the PPT in case it’s eliminated.

“That is an issue that has gotten a lot of conversation, but not a lot of action,” said Becky Bechler of Public Affairs Associates, the county’s Lansing lobbying firm, on the PPT matter. “They’re looking for replacement revenue. It will have an impact for local governments.”

September is also the month the One Kent Coalition hopes to get its draft legislation to merge the governments introduced in the Legislature. Bechler said the local delegation in the state House kept a pair of consolidation bills from being brought to the floor because they mistakenly thought the proposals were from the coalition.

“There isn’t anyone who wants to introduce it,” she said. “I’m talking with all of the (local) delegation in the House; they’re being very cautious.” If that is the case, One Kent may look to a powerful Republican from southeast Michigan to introduce it, which would put a lot of political pressure on the local GOP contingent to approve it.

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