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Treasury presentation: small debt-service dip, operations increases, and revenue-sharing adjustments
Summary
Subcommittee review of Treasury's debt service, operations and revenue-sharing lines covered a small net debt-service decrease, proposed operations increases for program expansions (My Able, predictive analytics, vaping tax administration), and changes to revenue-sharing distribution language tied to unsettled bills.
The Appropriations Subcommittee reviewed the Department of Treasury's recommended FY2025-26 appropriations across debt service, operations and revenue sharing.
Senate Fiscal Agency analysts summarized debt service first, saying the governor recommended a small net decrease (about $206,000) driven by changes in bond payment schedules: an increase in the Great Lakes Water Quality Bond payment was offset by decreases in quality-of-life bond and Clean Michigan Initiative payments.
On operations, Elizabeth and other fiscal analysts said Treasury operations would increase by roughly $38.7 million gross and $14.4 million general fund. Notable program requests include $5 million GF and four FTEs to expand the My Able program (federal expansion expected in January 2026), 17 FTEs and about $2.5 million GF to administer a proposed vaping and non-tobacco nicotine tax, and ongoing and one-time funding to implement predictive-analytics work focused on tax-data analysis and fraud prevention (two ongoing FTEs and $381,000 GF ongoing; $750,000 one-time requested). The Bureau of Accounting and Financial Services also seeks roughly $88.9 million gross and six FTEs for payment-card compliance, fraud monitoring and City income-tax program expansion.
Analysts also described several boilerplate deletions and modifications, including removal of a bond restructuring report and revisions tied to internet gaming and sports-betting deposits to rely on statutory references in the Michigan Compiled Laws (MCL) rather than listing amounts in boilerplate.
On revenue sharing, analyst Corey said the governor proposed a $47 million increase to the constitutional revenue-sharing pool (total near $1.8 billion) based on the January revenue estimate. He explained the governor rolled CVT and county-specific amounts into a separate local-tax-equalization payments line and applied a 4% increase to CVT and county baseline dollars rather than adjusting distributions via the prior three-factor formula. Corey also noted the governor's recommended language for the public-safety and violence-prevention fund reflects an attempt to use the distribution formula in House bills 4605 and 4606; because those bills did not pass the legislature, the recommendation proposes boilerplate that would allow distribution under the last iteration of that draft bill.
Members asked staff to verify several large-scope statements, including a request to trace a gubernatorial claim that $26 billion in debt had been paid down during the governor's tenure; staff said they would seek the governor's office or budget office for the calculation.
Ending: no votes were taken; staff will provide further documentation on distributions, program details, and revenue calculations on request.
