Bing Delivers Plan For Detroit - Snyder Eyes Emergency Manager

Detroit Mayor David Bing delivered his much-anticipated plan for avoiding a fiscal emergency in the City of Detroit Wednesday as the City inches closer to going empty on the cash necessary to meet employee payroll and other obligations come April. The Mayor called for Detroit firefighters and police officers to take the same 10 percent cut in pay already imposed on other city workers, a 10 percent increase in employee contributions to healthcare insurance plans, some layoffs and a potential privatization of maintenance of the Detroit Department of Transportation (DDOT) and the Public Lighting Department. Additionally, Mr. Bing stated he would seek a small increase in the City’s corporate income tax.

Most significantly, Mayor Bing called upon Michigan Governor Rick Snyder and the Michigan Legislature to send Detroit the $220 million in revenue sharing money the Mayor claims was part of a 1998 agreement between then Governor John Engler and former Detroit Mayor Dennis Archer.

While Mayor Bing clearly stated multiple times that he was proposing the changes to lead the City out of fiscal distress and to avoid the Governor appointing an emergency manager under Public Act 4, the Governor indicated he expected to begin a preliminary financial review shortly. The appointment of a committee to conduct this review is the first step towards the appointment of an emergency manager.

posted by PAA Online , Friday, November 18, 2011 12:04 PM
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Convicted Healthcare Provider's Licenses Gone Under New Law

A package of legislation was signed into law by Michigan Governor Rick Snyder this week allowing for the permanent revocation of the license and/or registration of healthcare professionals convicted of criminal sexual conduct (CSC).

Senate Bill 235, sponsored by Senator Rick Jones (R-Grand Ledge), House Bill 4411, sponsored by Representative Gail Haines (R-Waterford), and House Bill 4412, sponsored by Representative Matt Huuki (R-Atlantic Mine) are now public law.

The measures apply to convictions of first, second or third degree CSC. Those convicted of fourth degree CSC or intent to commit CSC can apply for reinstatement after five years.

posted by PAA Online , 12:03 PM
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Meijer Receives Tax Credit For Detroit Store

The Michigan Economic Growth Authority has awarded a $3.3 million Brownfield tax credit to Meijer for the construction of a store in Detroit. The retailer plans to raze the former Redford High School, vacant since 2007, and open a store on the property in late 2013 or early 2014.

The state’s credit is being joined by another $6.6 million in local and school tax capture. The estimated $22 million project would create nearly 100 full-time jobs. Whole Foods Market is also reportedly planning a store in the city.

posted by PAA Online , 12:00 PM
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PPT Eliminaiton And Revenue Replacement Still On Hold

Although earlier reports had indicated an elimination of the state’s personal property tax (PPT) was on-tap prior to the year’s end, Michigan’s Lt. Governor Brian Calley and Senate Finance Committee Chair Jack Brandenburg (R-Harrison Township) have signaled that the debate will continue in January as the nine session days remaining in 2011 are quite crowded with agenda items.

The much-maligned tax on equipment is viewed by most as a deterrent to business investment for many reasons; however, it provides in the neighborhood of $1.2 billion in revenue to local units of governments and school districts.

A recent study conducted by the Anderson Economic Group of East Lansing found that nearly 40 local units rely on PPT-generated dollars for more than 30 percent of their revenue and that 13 of Michigan’s 83 counties receive more than 12 percent of their revenue from the same source.

The Governor is reportedly putting finishing touches on a plan that will gradually eliminate the PPT over several years, using the expiration of future years’ business tax credits for revenue replacement.

posted by PAA Online , 11:59 AM
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PAAdvisory Briefs

Schor Makes House Bid Official

After considering a run for some time, Democratic Ingham County Commission Andy Schor has made his campaign for the State House of Representatives official through a YouTube announcement. Schor will be running for the 68^th House District, a seat being vacated by current Representative Joan Bauer (D-Lansing) in 2012 due to term limits.

Bolger Chases Jack

Speaker of the Michigan House Jase Bolger (R-Marshall) sent a gift package and invitation to Jack Daniels Distillery General Manager Tommy Bean in an effort to market Michigan as a potential new location for the Tennessee-based company. After reading of the possible tax increases the distillery may face, the Speaker touted Michigan’s move to the 6-percent corporate income tax and the world’s largest supply of freshwater.

Genesee County Parties to Choose Candidates

Officials from the Genesee County Republican and Democratic parties have 15 days from the certification of the election results of the evidently successful recall of State Representative Paul Scott (R-Grand Blanc) to choose their nominees for the February 28^th special election. The County GOP is reportedly set to meet Monday to select the Republican nominee while the Democratic party is working to set their meeting for after the Thanksgiving holiday.

Michigan Unemployment Rate Drops Again

Michigan’s unemployment rate dropped from 11.1 percent to 10.6 percent in October, representing the second consecutive month of decline. The number is a full percentage point lower than the October 2010 rate.

posted by PAA Online , 11:52 AM
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Client Corner

PAAdvisory is excited to announce the addition of a new segment in select editions of our newsletter highlighting specific news from our clients. This week, we bring to you an article regarding the Michigan Association of Certified Public Accountants (MACPA), specifically their initiatives to leverage the expertise of the organization’s nearly 18,000 members to aid in Michigan’s economic turnaround.

MACPA Task Force Knee-Deep in Michigan Reinvention

In a very early response to the election of Michigan’s first CPA Governor, Rick Snyder, and his call for significant reforms, the Michigan Association of CPAs launched the MACPA Involvement in Michigan’s Turnaround Task Force. Leveraging the unique expertise and extensive knowledge of Michigan’s CPA profession, this new Task Force is effectively facilitating the involvement of Association members in the efforts of the Governor, the Legislature, and other organizations to restore Michigan to a state of fiscal stability and economic viability.

The Task Force sprung into quick action in the autumn of 2010 with their first project – providing the Snyder Administration, Business Leaders for Michigan, and the Anderson Economic Group with recommendations on how to create a “citizen-friendly” version of the comprehensive annual financial report (CAFR) for the State of Michigan. Assembling some of the state’s leading experts in governmental accounting and auditing, including financial professionals from local governmental units who have previously developed similar documents, the Task Force provided significant input that turned out to be fundamental to the Governor’s January 2011 release of the Citizen’s Guide to Michigan’s Financial Health.

In the Spring of 2011, shortly after the passage of the State’s fiscal year 2011-2012 budget, it was clear that Michigan’s local governments would be met with a new reality with regard to revenue and budgeting – and again, the MACPA Involvement in Michigan’s Turnaround Task Force went to work. In partnership with the Michigan Association of Counties, the Michigan Township Association and the Michigan Municipal League, a subcommittee of Task Force members developed an educational forum for local government financial managers and policy makers. Scheduled for Friday, December 2 in Lansing, the Local Government Leadership Summit on Financial Matters promises to provide tangible, applicable knowledge and best practices for change management and financial reform for local units.

Task Force and MACPA leadership met with Snyder Administration officials to identify specific topic-areas and initiatives in which the profession’s expertise would add value. This meeting resulted in the development of seven additional topic-area workgroups. Different workgroups are at different stages of their initiatives, some awaiting direction from the Snyder Administration and/or the Legislature, others having taken significant steps – but all are armed, ready, willing and able to volunteer their knowledge and expertise in adding the MACPA’s mark on Michigan’s turnaround.

posted by PAA Online , 11:51 AM
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