Search legislation

Most Recent Comments

1) Journal statements of Senator Jaye  by Admin001 on November 8, 2001 
Senator Jaye’s first statement is as follows: This bill amends the Michigan Municipal Finance Act, and it’s an umbrella piece of legislation that deals with debt. There are what are called limited tax obligation bonds, which is something less than the full faith and credit of the entire community. There is an example, I believe, in western Michigan where a township granted a grant to a paper company, and the paper company went bankrupt. I believe the name of the company was Parchment, and the entire township was liable then for the bond that paid for various improvements to the factory. What I have got here is that municipalities shall not issue a full faith and credit tax obligation, and that means that it would have to come to a vote of the people. Under the Headlee constitutional amendment, any kind of bonded indebtedness must come to a vote of the people. There’s been a loophole that’s been created to say limited tax obligation bonds are something less than what the Headlee Amendment covers. What my amendment does is it clearly places to the voters who are responsible to pay for any debt to approve any kind of debt. I hope you’ll support this amendment. Senator Jaye’s second statement is as follows: I respectfully disagree with the Majority Floor Leader. People who purchase bonds and the bonds brokers insist on a higher level of interest on unlimited tax obligation bonds than general revenue sharing bonds. If you look at the amount of bonded indebtedness since 1978 when the voters put in the Headlee tax limitation plan, there’s been about four times the amount of limited tax obligation bonds compared to general obligation bonds, which must go to the voters. Limited tax obligation bonds, in fact, have been addressed by the Blue Ribbon Committee on the Headlee Amendment. This has long been a topic of editorials across the state of Michigan—how limited tax obligation bonds are a sneaky way for local elected officials and even some unelected officials like DDAs (downtown development authorities) and other unelected authorities to get around the taxing limitations imposed by the voters of Michigan’s Constitution. It’s four times the amount of debt levied by these limited tax obligations compared to the voters. Now if the communities schedule these votes at their normal August and November elections or the city’s August and November elections, there will not be any additional costs. The speaker was correct. If there are special elections, there will be additional costs to the taxpayer. But make no doubt about it, the taxpayers are forced to pay the difference—such as in these communities like Parchment, Michigan, where the township loaned money or took out a bond for improvements and the business went bankrupt. That crowded out other needed services like for seniors and roads and law enforcement and so forth. So the question is very simple. Do your voters—should your voters—have the right to approve any debt that they are forced to pay? If you vote “yes” on the Jaye amendment, you will give your voters the right which they voted for in 1978 to approve any debt before they’re forced to pay for it in taxes. I request your support. Senator Jaye’s third statement is as follows: I’ve had these amendments pending, I believe, since February. This second amendment would try to limit the exposure to the taxpayers to 5 percent of the state equalized valuation of property assessed in that county, city, village, or township. Let me equate this to a direct mail where sometimes a person gets a book that they never ordered or some other mail order document that they never ordered because sometimes an unscrupulous or less than scrupulous merchant knows that people are reluctant to go through the hassle of returning it, and they’ll end up paying the bills anyway. These limited tax obligations bonds are subject to the right of referendum. I appreciate that the Majority Leader has put forth additional referendum laws. Thank you. However, that puts the onus on the taxpayer—on working men and women who are struggling to meet all their work obligations, to raise a family, and now you’re telling them that they have to go out and get some signatures to put on a ballot a proposal that should have been put to them by the elected officials of the downtown development authority. Who’s money is it anyway? It’s a property owner’s money. I would suggest that since the 1978 Headlee tax limitation amendment limited the amount of debt that could be put on individuals without a vote of the people, the people wanted to have the vote. It is the government’s obligation to explain the program, make the case for the program, and bring it to the approval of the voters, just like in Royal Oak yesterday where the voters approved a bond proposal for additional firefighting enhancements, I believe as the newspapers have reported. But why are we putting the burden on the citizens as opposed to the elected officials? This amendment would limit that exposure to 5 percent of the property value. Please take a look—I handed it out earlier—at how much of this limited tax obligation debt there was before and after 1978—four times the amount of the nonvoted debt compared to voted debt because it’s a lot easier to get a tax increase through people if they don’t know about it or they don’t have the time or the energy or the economic resources to gather signatures, and put it to the vote of the people. I ask you to look at the amendment, and please support limiting the taxation which is legalized theft against a community to 5 percent of state equalized value, which still would allow the local elected officials to get more than that if they got the voter approval first.
Reply

2) 2001 Senate Bill 29  by admin on January 1, 2001 
Introduced in the Senate on January 30, 2001, to rewrite the state municipal finance law so as to authorize local units of government, school districts, and other bonding authorities, to issue debt without prior Department of Treasury approval if they file an annual audit report with the department demonstrating financial soundness. It also authorizes “budget bonds,” now prohibited, which are paid out of the operating budget and do not require a vote of the people, and negotiated bond sales, rather than competitive sales, now required for larger issues. The bill limited the issuance of refunding bonds and zero-coupon bonds to instances where they actually save taxpayer dollars

The vote was 34 in favor, 1 opposed and 3 not voting

(Senate Roll Call 99 at Senate Journal 42)

Click here to view bill details.
Reply

View Full Conversation