Municipal Sources 

• TIFA Opt-Out – The Recodified Tax Increment Financing Act, 2018 PA 57, MCL 125.4101 et seq., provides the ability for public libraries to opt out of millage captures by certain entities such as Downtown Development  Associations (DDAs), Tax Increment Financing Authorities (TIFAs), Local Development Financing Authorities, Corridor Improvement Authorities, and others. Note that not all authorities are part of this exemption. Refer to the law linked at the beginning of this section. As long as the authority that is capturing the millage funds has no outstanding financial obligations relating to the projects funded by the captured monies, public libraries with millages passed before December of 2016 can opt out of capture by sending a letter to their municipality declaring their intent to opt out. Public library millages passed AFTER Jan 1, 2017 are automatically exempted from capture. Municipalities may not automatically capture library millages passed after Jan 1, 2017. It may be worth a review to ensure that millage monies are not being unnecessarily captured. 
• Marihuana Tax funds – The Michigan Regulation and Taxing of Marihuana Act, 2018 IL 1 (Initiated law), MCL 333.27951 et seq., permits the taxing of retail recreational marihuana. As part of this process, municipalities are paid a portion of the tax revenues raised under this act. Unfortunately the law is written so that “municipalities” only include Counties, Cities, Townships and Villages (not public libraries of any type). The amounts dispensed to each municipality are calculated using the number of marihuana retailers located in each municipality. A list of the amounts dispensed in 2020 is here. These monies can be used by the municipality for any municipal purpose – including public library service and operations. Additional information on this program can be found here.
  
• Wind Farms – Energy companies lease land around the state from farmers and municipalities for purposes of erecting wind turbines for energy generation. The agreements typically include not only lease payments, but also a percentage of monies earned on the resulting energy. The “wind farms” also pay taxes. In some municipalities where this is occurring, the municipality shares the wind farm monies (including additional tax money) with the public library, and in others they do not. A map of wind farms in Michigan can be found here. Your municipality’s budget and/or audit report should include the source of any revenue to the municipality. 
  
• Casinos – If your municipality is located near a Native American operated casino, there is a good possibility that there is an agreement with the Native American Tribe for a percentage of revenue from that casino to be paid to local government units – which public libraries are. In most situations, public libraries receive a portion of these revenues (however, depending on establishment type, monies may be paid through the municipality). The annual report on Indian gaming revenues paid to local governmental units is here (see “Revenue Distribution Report” section of the most recently available report from 2019). The report no longer breaks down revenues paid to each local unit. More information can be obtained by contacting the Michigan Gaming Control Board.
• ARPA Funds – Municipalities have opportunities to apply for an receive grants authorized under the American Rescue Plan Act, PL 117-2. In addition to funds specifically allocated to “local governments”, ARPA has an additional grant program for what they call “Non Entitlement Units,” (NEU), which are municipalities not included in the primary ARPA program. These municipalities tend to be areas of lower population and of incorporation types that may not be typical of common municipal government organizations, or which are not common to every state, such as Townships. Michigan is a state with a strong NEU presence, so there are many areas eligible for funds under this program. Information is available on the ARPA programs from the National League of Cities (NLC also has a good FAQ), Michigan Township Association, and a good guidance is available from the U.S. Treasury Department. There is also a  list of the NEU municipalities in Michigan and the allocated grant amounts available for each.  
  
• Millages – If a library millage is up for renewal, the board may wish to carefully consider whether the current millage amount is adequate to meet the library’s needs. Depending on establishment type, and amount of existing millage, an increase or a Headlee override may be a reasonable option. A library board may wish to review their establishment law to see what millage limits they are under, and if there are any additional millage options.
• Special Assessments – Special Assessments are payments levied by a municipality for a specific municipal purpose, such as maintenance of a public park. There are municipalities in Michigan that fund their library using a special assessment. However, this is a complex legal area and there are opinions that would suggest that the funding of a public library is not appropriate for a special assessment. Library boards interested in knowing more about this process should consult their attorney. Michigan Municipal League’s Handbook for Municipal Officials has a good explanation of Special Assessments. 
• Service Contracts – Every Michigan public library has authority to form contracts with municipalities for library service. There are currently several municipalities in Michigan which do not have a local library or offer library service to their residents. Public libraries can offer services to these municipalities for a cost. Often a contract for service will include the penal fines for the municipality served, as well as additional monies to cover the cost of library service paid by the patrons of the library offering the service. State Aid monies would also be available for a contracted population, as long as the library offering the service meets the State Aid eligibility requirements. The Library of Michigan can assist a library with identifying available populations and with information to determine appropriate cost of services and sample contract language. See our information sheet online. 

 

Looking to learn a little more to enhance your knowledge and skills as a public library trustee? Take a look at these opportunities to learn! If you missed a recent LM session you can find many of previous webinars on the LM Webinar Archives page. 

Even though your role as a trustee is centered on your local community, it is helpful to have a broader context of understanding of public libraries in general. We have included here a few recent resources to provide a deeper understanding of public libraries in the US.