New restricted fund would provide stable funding for Michigan cities, townships, villages, and counties
LANSING, Mich. (April 30, 2026) — Today, the Michigan Senate unanimously passed legislation that would ensure consistent funding for Michigan’s counties, cities, townships, and villages. Introduced by Sens. Jeremy Moss (D-Bloomfield), John Cherry (D-Flint), and Veronica Klinefelt (D-Eastpointe), these bills would create a Revenue Sharing Trust Fund, dedicating a fixed portion of sales tax revenue to support essential local government operations across the state.
“It is way overdue for the Legislature to provide our local communities with predictable and consistent funding each year from our state,” said Sen. Moss. “For too long, Lansing has balanced its books on the backs of our municipalities to plug holes in the state budget. This has led to disastrous outcomes back home as communities continue to struggle to provide essential services for our residents. As a former City Councilman, I first ran for the Legislature to solve this exact problem. After years of disinvestment, we are finally establishing the fund that our cities, villages, townships, and counties need.”
Revenue sharing is the distribution of money from sales tax collections to local units of government — cities, villages, townships (CVTs), and counties — to fund services that residents count on from their communities, from police protection and fire service to garbage collection and clean water.
This legislation builds upon Senate Democrats’ efforts to strengthen revenue sharing in the 2025 state budget through the return to a fairer distribution model — an update that ensured the restoration of funds for over 1,000 Michigan communities.
Currently, Michigan counties and CVTs receive revenue sharing funds each year from the state general fund, a process that results in unpredictable and inconsistent funding each year for local communities and undermines their ability to plan for quality resources and services for residents. By establishing a new fund within the Dept. of Treasury to house revenue sharing dollars year-to-year, this legislation could protect vital funding that these local units of government rely on to serve their communities.
“We’ve got to look out for our local units of government, because it’s those entities — our counties, cities, townships, and villages — that look out for Michiganders,” said Sen. Cherry. “By solidifying adequate, stable funding streams for local communities, we’re ensuring folks across Michigan have access to the quality services and resources they need — responsive police and fire crews, safe roads, clean drinking water, and more. Last session, I was proud to help restore essential funding to all Michigan CVTs, and I’m pleased to continue building on that effort with this legislation, helping communities statewide better plan — and in turn — better provide for their residents.”
“Our local communities deliver the essential services families rely on every day — from law enforcement officers and firefighters to trash pickup, water treatment, and local road maintenance,” said Sen. Klinefelt. “But to provide those services consistently, our municipalities need long-term financial stability. That’s exactly what this legislation is about: protecting local funding and ensuring a fair share of our sales tax dollars are invested back into our communities.”
“Michigan’s townships provide essential services that impact their residents and broader community each and every day,” said Judy Allen, Director of Government Relations at the Michigan Townships Association. “Establishing a revenue sharing trust fund is a vital step forward in ensuring predictable, stable state funding to support local services, and we are grateful to Senators Moss, Cherry, and Klinefelt for their continuous efforts to champion our communities, which will allow municipalities to address local needs and better invest in and plan for the future to support a successful Michigan.”
“For too long, revenue sharing has failed to keep pace with the growth of state revenues, placing increasing pressure on counties to deliver essential services,” said Deena Bosworth, Director of Governmental Affairs at the Michigan Association of Counties. “Today’s Senate action moves us closer to a fair, sustainable system that ensures these dollars grow with the economy and remain dedicated to their intended purpose. We thank the Senate for recognizing the importance of stable, protected revenue sharing and look forward to continuing this momentum through the legislative process.”
“The Michigan Senate’s passage of revenue sharing trust fund legislation marks an important step toward stable, reliable resources for local governments,” said Dan Gilmartin, Executive Director and CEO of the Michigan Municipal League. “Communities across our state depend on consistent funding to maintain public safety, infrastructure, and essential services that families and businesses rely on every day. Safeguarding these resources is not just good policy — it is critical to the long-term strength and stability of our communities. We appreciate the Senate’s leadership in advancing this legislation and look forward to continuing this work with partners in the House to get this across the finish line.”
This legislation now heads to the House for further consideration.
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