State's budget still in jeopardy
Land use issues continue to be center stage

Lead poisoning suddenly took center stage in REALTOR® related legislation early this spring. As quickly as it arose, we were able to bring facts to light that diffused a scheduling “crisis” mentality into bills that will help Michigan’s at risk children while recognizing the realities of affordable housing and property ownership.

In short, with the passage of Senate Bill 756 (Sen. Bill Hardiman, R-Kentwood) and House Bill 5116 (Rep. Randy Richardville, R-Monroe), there will be a voluntary registry for those landlords who have taken preventive measures. There will be a Governor’s commission to study lead based paint hazards in Michigan. Also, there will probably be stiffer penalties for those landlords who knowingly lease properties containing actual hazards to children proved to have been poisoned and then STILL take no corrective action within a reasonable amount of time.

Budgets out of control

Although some good economic news about Michigan’s employment indicators broke with the official coming of spring, projected revenues for 2005 are still far too low for the legislature to draw comfort. Wariness and suspicion set the tone for early budget negotiations between Republicans, Democrats and interest groups. Everyone began circling as both potential predator and prey.

Once the fight began, the sin taxes proposed by the Governor caused early injuries to the tobacco and alcohol industries, and then the feeding frenzy began. Rhetoric about additional taxes of 75 cents per pack quickly escalated to 81, which would make Michigan our nation’s number one taxing state on the tobacco industry. Some House Republican caucus members began breaking ranks over increased taxation, and tempers flared. The good news, initially at least, is that we have made a good case to stay out of the danger zone and do not expect to be hit with any additional taxes that would erode already shaky profit margins in residential sales or kick commercial sales while they’re still down.

To repeat our theme, however, make sure to stay close to your state legislators throughout this process and be ready this political year with your editorial pens and RPAC checks. There is still a lot of talk about restructuring Michigan’s tax code, and not just in light of recent budgetary shortfalls. On a grander scale, legislative leaders have declared their intention to adjust for Michigan’s receding manufacturing base, that once could be relied upon as the primary driver of the U.S. economy.

To give you a feel for the “think-tanks” and policy mood in Lansing, I recently heard a panel of seven educational funding experts discussing a funding downturn (after adjusting for inflation) that some school districts are experiencing for the first time since the passage of Proposal A. One respected professor submitted that the only way to remedy this structural shortfall was to add two mills to Michigan’s property taxes. Six of the scholars on that panel agreed. The one analyst from the fiscally conservative Mackinac Center was nearly booed for his dissent. That’s part of the policy climate we’re working within.

When the time comes to battle this out, we will be ready with analyses and polls showing that Michigan’s property taxation is above the national average and already beyond where the citizenry wants it to be. But that won’t matter if you’re not ready to become involved, in whatever month or year it might become critical, to communicate these things from the grass roots level.

A DLEG update

The Department of Licensing and Economic Growth has really turned around education approvals recently. There have been some changes in personnel, and we couldn’t be more pleased with the department’s efforts to quickly bring you more con ed opportunities. Unfortunately, a few other matters have remained stuck or have become jammed, such as expediting license issuance or tracking your continuing education credits since the new law passed. According to DLEG, they’re doing their best. We’ll be doing our best to help them acclimate to doubling our licensing fees (in late 2002) and theoretically cutting their workload since switching to tri-annual licensing.

I know this is frustrating to all of us, but stay tuned. In the meantime, be patient with “the program” to track your con ed credits in the next couple of years. You know that you must have 18 credits of continuing education every three years. You know that the legislation says that you will be required to have at least six credits this year, four the next, and two credits on legislative and legal changes each year for all time thereafter. You may have heard that DLEG is having trouble designing a program to properly track those credits.

So, what’s a REALTOR® to do? Our advice is to follow the law. Make sure you have 18 credits every three years starting from 2003. Take at least the numbers mentioned above this year and in 2005. Eventually, we believe this thing will be worked out.
On another point, we’ll be working with DLEG and the Department of the Treasury to release funds so that the Attorney General and Governor can continue to prosecute unlicensed and illegal real estate related activities. We hope to make this progress in what is called “Appropriations Boilerplate,” which mandates certain things from governmental departments before they can be funded. It’s not pretty, or bulletproof, but it often produces results.

Land use

This month’s magazine theme covers much of what is being discussed in Lansing on land use since long before the Governor made this issue a cornerstone of her agenda. She has begun packaging state funding and prioritization for her “cool cities” initiative. We’ve finally seen passage of the Land Bank legislation. There are bills passed to allow for better design at the local level, if townships take advantage of them. Additionally, we are in the middle of discussions to depoliticize and streamline the plat portions of the Land Division Act so that more intelligent land use decision-making can be made.

Unfortunately, none of this grabs headlines like the mean old bulldozing, land grabbing, profit-mad characterizations often made by newspapers whenever a new development comes to town. But, it’s getting better. As demonstrated in our guest’s columns, all sides of the land use debate have developed a growing appreciation for the problems associated with poor decision making at the local level. We are proud to have played a part in refining the debate to this extent. We have long maintained that Michigan’s housing industries have only followed the rules in making our housing and commercial markets look the way they do.

Too often, in the past, good intentions have resulted in ugly restrictions on what used to be traditional neighborhood designs. Whether it was the presumption of environmental liability that pushed industry out into farm fields or roads made too wide and straight by fear of lawsuits, much of today’s out-suburban, grid-pattern development has actually been mandated by state law and perpetuated by township governmental policy. Through better communication, less “not in my backyard” political encroachment on property rights, and education on good design, Michigan’s future housing can be more vibrant and beautiful than we have ever seen before. Through publications like this, we hope to arm you with some of the information you need to shed light on this process in your hometown.

As demonstrated, by the guest articles perspectives, we’re proud to look for policies that mutually benefit our friends and traditional political foes alike. While we will never compromise our principles we will always strive for better public policy and the improvement of Michigan’s real estate market.