Department of Treasury

The Department of Treasury’s major responsibilities include the fair and efficient management of the state’s tax system, investment of state funds, safeguarding the credit rating of the state and local governments, provision of forecasts on state economic activity and revenue, administration of property tax laws, audits of county and municipal financial records, maximization of lottery revenue to the School Aid Fund and providing oversight of casino gaming operations. The governor’s proposed budget for fiscal year 2016 recommends total funding of $689.9 million, of which $276.7 million is general fund. In fiscal year 2016, the budget includes one-time funding of $19.9 million general fund. For fiscal year 2017, the governor recommends total funding of $670 million, of which $256.8 million is general fund.

Treasury Operations

• The governor’s fiscal year 2016 budget provides $7 million in local funding resources for the Department of Treasury to support the city individual income tax program and the development of its business tax component. The Department of Treasury, through this program, will collect and process city taxes, beginning with the City of Detroit individual income taxes. The cost of this service will be borne by payments from participating local municipalities.

• The governor recommends $156.4 million for debt service payments, adding $5 million to fund debt service related to the issuance of Strategic Water Quality bonds. These bonds will fund sanitary sewer and storm water infrastructure projects in local communities.

• Public Act 603 of 2012 provides for a scheduled increase in the statutory formula for the Payments in Lieu of Taxes Program. Swamp and tax reverted land payments will increase from $3 to $4 per acre. The governor’s recommendation provides an increase of $4.9 million, of which $4.5 million is general fund, to fully fund this requirement.

• The Executive Recommendation provides $2 million general fund to cover operating costs associated with the Detroit Financial Review Commission. The nine-member commission was created to provide fiscal oversight for the City of Detroit following approval of the city’s amended plan of adjustment by the United States bankruptcy court. The commission’s responsibilities include ensuring that the city is in compliance with the statutory requirements defined in the Michigan Financial Review Commission Act, including the city’s ability to provide essential municipal services to its residents.

• Personal property tax reform bills signed into law in December of 2012 reduced property taxes levied on personal property, while providing mechanisms for replacement of a portion of the lost tax revenue to local units of government. The governor’s fiscal year 2016 budget provides $22.6 million general fund to fulfill the requirements of the tax reform law, with $19.3 million allocated specifically for reimbursement payments to locals, and $3.3 million to cover associated administrative costs.

• The governor’s fiscal year 2016 budget provides $2.6 million general fund for a Treasury online business portal. This vehicle will enable Michigan businesses to do electronic business tax registration, tax returns and tax payments utilizing one web interface for all their tax needs. Approximately $16 billion in tax revenue will be collected from businesses that pay sales, use, and withholding taxes via this system.

• The Executive Budget includes $4 million general fund, in tandem with $778,100 in the Department of Education, for funding of financial independence teams. These interagency teams will be tasked with implementing early warning systems to identify school districts that are in need of financial attention and provide the expertise and resources needed to address problems before a crisis occurs.

• The Executive Recommendation includes $4 million in general fund savings achieved by overall operational efficiencies throughout the department.