House panel hears overview of state revenue sharing, history and recent formula changes

Ben Gilchick, a House Fiscal Agency analyst, told the House Appropriations Committee on General Government that state revenue sharing consists of constitutional and statutory payments that together provide direct, largely unrestricted funding to Michigan local governments. "Revenue sharing includes payments to 280 cities, 253 villages, 1,240 townships, and 83 counties," Gilchick said, and he noted that the state constitution requires that 48.97% of state spending from state sources be paid to local units of government.

The briefing focused on how constitutional revenue sharing — a per‑capita share derived from 15% of sales tax collections at the 4% base rate — differs from statutory revenue sharing, which has changed forms over time (including EVIP and the later CVT revenue sharing). Gilchick summarized decades of changes, the mid‑2000s reductions that removed statutory payments for many local units, and the FY25 appropriations that restored broader CVT payments and introduced a three‑factor formula to distribute a $34.4 million increase.

Why it matters: combined constitutional and statutory revenue sharing is a major source of flexible local funding that supports police, fire, public works, and other municipal services across roughly 1,856 local units…