PERSPECTIVES OF THE MICHIGAN TOWNSHIPS ASSOCIATION What’s Happening to Michigan Local Governments?

The Michigan Economy Domestic auto industry market share dropped from 75% to 40%; State Personal Income Rank 40 th out of 50 states Revenues $8 billion below constitutional revenue limit

The general state of the state Inflation adjusted GF/GP revenue down 43.4% since FY 2000; SAF down 15.7% FY  Federal bailout ending  State tax policy GF/GP shortfall approximately $1.3 billion SAF shortfall approximately $415 million FY GF/GP shortfall approximately $500 million

The general state of the state Health care  22.4% of Michigan GF/GP revenue is Medicaid;  1 of six residents eligible;  42% of birth, 70% of nursing home expenditures are Medicaid; total $9.9 billion Corrections  23% of GF/GP Tax exemptions $6.3 billion revenue shortfall

Revenue Sharing millions

Property Values Growth Slowing Inflation Rate Multiplier Total Growth SEVTotal Growth Taxable Value

Fire Service Personnel Per Capita

Fire Service Expenditures Per Capita

EXPENDITURE CUTS REVENUE ENHANCEMENTS REFORMS State Driven Reforms

Governor Granholm Proposals New state employees pay 20% of health care premiums Retirement incentives for 7,000 eligible state employees; 39,000 public school employees Rescind non-union increase Eliminate retired legislator health care Reinstate good time credits for inmates Medicaid fraud Competitive bids over $50k Urban cooperation act, collective bargaining 2- year budget Eliminate ineffective tax credits

Governor Granholm Proposals Reduce Sales and Use Tax from 6% to 5.5%; Extended to Services Exclude, health, education, construction, real estate and insurance commissions Would generate $728 m Cut MBT surcharge 50% in 2011; eliminate in Savings to businesses:  $171 m 2010; $456 m in 2011 Reduce MBT gross receipts rate Levy 3% tax on physicians gross receipts

Speaker Dillon Proposals Require all public employees with health coverage to enroll in new state sponsored program  Projected savings $900 m 2 Year Budget State Purchases Tax Expenditures Examined

Senate Republicans Cut pay 5% for all public employees, freeze for three years Savings: $1.2 billion Require all public employees to pay 20% of health care premiums; HSA coverage would pay 15% Limit school district administration to 28% of budget All non-instructional contracts bid out Limit Medicaid to basics Eliminate health care for retirees after 2011 Reduce number of state departments

Senate Republicans Change laws to allow more intergovernmental sharing of services All state business permits and licenses issued by a single office

Business Leaders for Michigan Reduce state workforce by 5%-10% Cancel 3% pay increase for state unionized workers Require public employees to pay 17.8 % of health insurance costs Mandate 2 year budget Change laws to allow more service sharing Reduce prison terms by one year Remove state limit on charter schools Reduce number of state universities and funding Public/private council to set budget spending targets

Business Leaders for Michigan Require disclosure of business cost impact resulting from new legislation Lower sales tax to 5.5% expanded to services; exempt B to B; education, housing Eliminate personal property taxes on businesses Eliminate MBT surcharge Cut MBT gross receipts rate

A Better Michigan Future Change current 4.35% flat rate income tax to graduated rate (3.9%, 4.35%, 6.9%) Expand sales tax to services Eliminate some tax exemptions Audit state contracts, eliminate waste