Michigan lawmakers are weighing bonds as an option for regional transit as part of changes to the state’s Michigan Municipal Partnership Act.
Legislation being heard in the state House transportation committee would make changes to the 2011 Michigan Municipal Partnership Act, which lets governments participate in a “joint endeavor” to levy a property tax in an effort to offer efficient, joint public services.
The changes to the legislation would allow Wayne, Oakland and Washtenaw counties in Southeast Michigan to create a three-county transit plan by a majority vote within each jurisdiction and lift the millage caps in each of the counties to accommodate a transit tax. Detroit is in Wayne County.
On Tuesday an amendment to the bill was introduced that would allow for revenue bonds to be issued under a joint revenue contract. The change would allow revenue from the tax levy to be used to repay bonds.
The bonds could not mature more than 30 years after the date of issuance and would be sold through the Michigan Finance Authority.
Rep. Jason Sheppard, R-Temperance, who is sponsoring the legislation, said the amendment would allow a joint endeavor to issue revenue bonds to finance the purchase of additional buses, road improvements and other transportation needs.
“The ballot proposal for the joint endeavor must state that revenue from the tax may be used to repay revenue bonds,” Sheppard said.
This push to change the 2011 legislation is geared to support a renewed effort by Detroit and the three county governments to get a regional transit millage proposal on the November ballot next year.
Wayne County Executive Warren Evans said in his testimony before the House committee on Tuesday that the amendment in itself wasn’t a transit plan.
“This is an opportunity for us to have a vehicle to create a plan and one that can speak to the needs of Southeast Michigan with the exclusion of Macomb County quite frankly because it didn’t want it,” he said.
Evans said that the modification of the partnership act would create a jurisdiction that can levy tax for transportation purposes. It would ensure that any tax revenue is used expressly for the transit plan without diversions to tax capture programs.
“Those are significant things that will allow us the ability to create a plan that is workable in our region,” he said.
Transit backers have experienced two big disappointments in the last three years.
In 2018, Macomb County Executive Mark Hackel and Oakland County Executive L. Brooks Patterson blocked efforts to put a 1.5-mill proposal on the ballot.
In 2016, a regional 20-year, 1.2-mill property tax increase ballot measure for the system failed because most voters in Macomb County did not approve it.
Patterson died in August. His successor, Dave Coulter, has supported regional transit for years. Coulter is joining leaders in Wayne and Washtenaw counties and Detroit Mayor Mike Duggan in the renewed push. Macomb County chose not to participate in the latest RTA millage effort. County Executive Mark Hackel has said fixing roads is a higher priority than mass transit.
Under current law, local governments can enter into joint contracts with one another or a public agency for providing or creating services. These joint endeavors can lead to proposed millages with a majority vote deciding whether taxpayers will assist in paying for the services, but the number of millages must be under a constitutional limit.
Sheppard’s bill clarifies that these joint plans would not count toward that limit and would open the door to additional partnerships — such as counties working with townships — for shared services. The money generated from a voter approved tax would also not be captured by any other governmental entity for unauthorized purposes, meaning money earmarked for a project would be going directly to where it’s intended.
“This plan protects the will of the voters while making sure these types of millages won’t be impacted by an arbitrary cap,” Sheppard said. “If voters don’t want it, they’ll say they don’t want it.”
Evans said that transit is an investment in the region's future.
“It is an impediment to our continued growth not to be able to have an eventual transit plan and the municipal partnership act is out best opportunity to be able to craft that plan,” Evans said.
Although the initial focus is on the Southeast Michigan area, the legislation would affect all of Michigan.
