Metroparks Authority snagged by tax law change
By JOHN STURK
Capital News Service
Tuesday, November 22, 2005


LANSING - The state may owe more than a half million dollars to the five counties supporting the Huron-Clinton Metroparks Authority because of confusion regarding the elimination of state revenue-sharing in 2004.

When legislators tried to balance the state budget in 2004, they cut payments to counties in return for allowing the to collect their own property tax in the summertime, instead of fall.

Before that, the state paid a share of park costs to Livingston, Oakland, Wayne, Macomb and Washtenaw counties, which in turn passed the money through to the authority.

The change means Huron-Clinton Metroparks are losing money that would normally come from the pass-through payments from the state.

It runs 13 park, including three in Macomb County, and two in Oakland County.

Dave Wahl, controller of the Metroparks Authority, said the parks stand to lose $550,000 per year as an unintended consequence of the tax shift.

"We plan on working with the Legislature to find a solution," said Wahl. "But so far, everyone there has acknowledged the problem, but nobody has seriously proposed any way to fix it."

In addition to moving up tax collection to earlier in the year, the money collected was put into a reserve account. The counties could then draw from that account to soften the adverse impact of not receiving revenue sharing payments.

Dave Diegel, finance director for Macomb County, said that money from the reserve fund won't  be used to finance the parks.

"If Metroparks asked us for our payment, we couldn't pay them because we just don't have the resources," said Diegel. "The reserve fund is a replacement for the revenue-sharing money. It's not intended for the parks."

According to Diegel, Macomb County currently has around $40 million in reserve. This is expected to be used up by 2011.

"If we were to use money from the reserve fund, that would deplete the fund that much faster," said Diegel.

Depending on final determinations by the Treasury Department, more local and county agencies could be hurt by the change in tax collection dates.

"It depends on whether or not the authority was in existence prior to 1976, when the Single Business Tax was enacted," said Tom Hickson, legislative director for the Michigan Association of Counties.

To fix the Metroparks problem, proposals being tossed around include a direct appropriation from the Legislature or moving up the Metroparks own tax collection to June, along with county tax collection.

So far, a House Appropriations subcommittee has held a hearing on the issue, but so far the Legislature hasn't resolved the situation.

"The frustrating part of this is that nobody was supposed to be harmed by this change," said Hickson. "Now we're finding out that yes, authorities are getting harmed. Now we just need to work to find a solution."