Michigan Senate Bill SB0559

Michigan 2025-2026 Regular Session

• Introduced: 9/18/25
• Refer: 9/18/25

Caption

State management: funds; revenue sharing trust fund; create. Amends 2000 PA 489 (MCL 12.251 - 12.262) by adding secs. 11a & 11b. TIE BAR WITH: SB 560'25, SB 561'25

Impact

The bill outlines a clear distribution method where approximately $299 million will be allocated to cities, villages, and townships. This distribution is mandated regardless of prior eligibility criteria under existing laws, raising significant funds for local governments. The revenue sharing will occur in three distinct formats: taxable value payments, unit type population payments, and yield equalization payments, thereby addressing diverse local needs and population requirements. This framework not only aims to balance fiscal disparities among municipalities but also ensures a more equitable resource allocation.

Summary

Senate Bill 559 (SB0559) proposes the creation of a revenue sharing trust fund as an amendment to the Michigan Trust Fund Act. Effective from October 1, 2025, this bill aims to enhance local government's financial resources by establishing a dedicated fund managed by the state treasurer. The fund will consist of money deposited from various sources, including sales tax and donations, along with any interest and earnings from investments. A key provision is that the funds do not lapse at the end of the fiscal year, ensuring consistent availability for future allocations to municipalities.

Contention

Debate surrounding SB0559 may arise from concerns over the reliance on state-controlled funding and the adequacy of the disbursement formulas. While proponents argue that the revenue sharing trust fund will enhance local autonomy and alleviate financial burdens, critics may point out potential pitfalls in dependency on state allocations and the management of these funds. Additionally, the preemption of some eligibility restrictions can lead to discussions about fairness and accountability in how local governments use these resources.

Future considerations

The enactment of SB0559 is contingent upon the approval of two other associated bills (SB 560 and SB 561), indicating a broader legislative strategy to reform how state and local governments interact financially. This interconnectedness suggests that the future of municipal funding in Michigan may experience significant changes, and legislators must consider long-term implications for local governance and economic growth.