LANSING — Yesterday, House Bill 5574 passed out of the House Licensing and Regulatory Affairs Subcommittee on Appropriations. HB 5574 would shift state funding away from the three-tier system that funds local governments toward fire protection grants, which fund fire suppression and the protection of state buildings. This move effectively slashes millions from local budgets. 

The three-tier system was established in 2014 to help communities adjust to personal property tax reforms and replace any money lost in the transition. The three tiers established a hierarchy of funding distribution for local governments and other entities able to levy millages, such as libraries, community colleges and school districts. Tier I is meant to cover essential services, Tier II significant services, and Tier III additional money going to communities. In order to provide funding for fire protection grants, HB 5574 would redirect money away from Tier III funding.   

“Dearborn, a portion of my district, will be one of the hardest hit by the restructuring of these payments. I offered an amendment that would have lessened the impact on the communities and let them adjust to the new structure, and sadly it was not adopted,” Santana said.

As it stands presently, HB 5574 would redirect funding to fire protection grants and reduce the Tier III funding without any transition time for the affected communities. Santana’s proposed amendment would have reinstated the $100 placeholder for the fire protection grants, held communities that will be adversely effected harmless for one year, and created a timeline to phase in the reduction, giving communities the opportunity to adjust to the decrease in funding while they attempt to find replacements. This measure was rejected. The bill now moves forward to the full House Appropriations Committee. 

“The state robbed communities of necessary investment dollars for the last seven years,” said Santana. “It’s time for change in Lansing. Communities within my district and across the state will be deeply impacted by this, and that is shameful. We cannot continue to balance our budget on the backs of those who can least afford it.”