CHICAGO -- Local governments in Michigan get a break under the state's new $54 billion budget, which holds steady on their revenue aid after years of deep cuts.
There's even a glimmer of hope that lawmakers next year may increase local aid or revamp how it distributes the dollars.
"They kept revenue sharing flat with last year; no increase but no cuts, and it's a positive thing not to be cut," said Chris Hackbarth, director of state affairs for the advocacy group Michigan Municipal League.
Local governments have faced cuts since at least 2003 as the state struggled to deal with a recession that began in 2000.
Michigan's local governments are among the most dependent on state aid in the country, with 43.3% of their budgets funded by the state as of 2014, according to the Chicago Fed.
After a rush of new lawmakers entered the capitol in January 2015 because of turnover stemming from term limits, the state's revenue sharing may get a fresh look, Hackbarth said.
"We had some big turnover so I think some of the legislators are just trying to get their arms around the issues," he said. "So next year's budget they might take a much closer look at how the dollars are being distributed and at restoring some of the cuts."
Lawmakers on June 5 sent Gov. Rick Snyder a $54.4 billion budget that includes all funds except the school aid fund. It's slightly higher than the governor's proposed $54 billion budget.
The 2016 general fund budget totals $38.7 billion and the school aid fund totals $13.9 billion. The budget includes a $100 million deposit into the state's rainy day fund, bringing it up to $500 million.
Detroit escaped a threat from the House to cut its revenue aid by $5 million.
The school budget also sets aside $50 million that could be used for Detroit Public Schools' bond debt if lawmakers are able to reach agreement on a payment plan. Snyder wants the state to take over payments on $483 million of state aid-backed bonds to help deal with an $170 million deficit. The issue is expected to be debated in the early fall.
The budget also includes $7 million to take over the city's long-troubled income tax collection system and $2 million for the financial review board that oversees Detroit's implementation of its restructuring plan.
The budget also includes a one-time, $400 million appropriation for the state's roads. The road funding is part of a years-long debate over raising taxes to improve the state's battered roads.
Voters in May overwhelmingly rejected a sales tax increase to raise money that would have gone largely to roads but also local governments and schools. With the budget behind them, lawmakers are expected to try to hammer out a new roads plan over the summer.
New road funding is an important issue for local governments, Hackbarth said, and advocates are watching the debate closely.
"The $400 million is helpful but we need so much more," he said. "We know there's an interest in looking at future growth with revenue aid and road funding," he added. "There are changes coming, knock on wood."
