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Reimbursement Priority

The Local Community Stabilization Authority (LCSA) levies a portion of the 6% Use Tax, referred to as the Local Community Stabilization Share (LCSS) revenue. The LCSA Act stipulates that the LCSS revenue shall be distributed by the LCSA in the following order of priority:

  1. 100% reimbursement for:
    1. Local school district and intermediate school district (ISD) school debt loss, local school district sinking fund millage, and local school district recreation millage;
    2. ISD operating millages;
    3. School operating loss not reimbursed by the school aid fund (i.e. supplemental hold harmless millage and operating millage for out-of-formula local school districts);
    4. Millages used to fund essential services (i.e. police, fire, ambulance, and jails);
    5. Tax increment finance authority (TIFA) decline in captured value of commercial and industrial personal property;
    6. 2015 small taxpayer exemption loss (STEL);
    7. Distribution for fire protection funding to municipalities with state facilities: and
    8. Distribution of $10,000,000, in total, for required and allowable health services to municipalities that incur certain reasonable and allowable costs.
  2. Distribution of remaining Local Community Stabilization Share (LCSS) revenue:
    1. Distribution of total qualified loss to municipalities, other than local school districts, ISDs, or TIFAs:
      1. Beginning for calendar year 2021, 10% of the total qualified loss is reimbursed based on the municipality’s proportionate share of total acquisition cost of all eligible manufacturing personal property (EMPP) statewide. This distribution type will phase-in an additional 10% each year.
      2. Through calendar year 2029, the total qualified loss less the amount distributed based on total acquisition costs of all EMPP statewide is reimbursed based on the municipality’s proportionate share of qualified loss.  This distribution type will phase-out 10% in calendar year 2021, and an additional 10% each year.
    2. Distribution of the municipality’s current year corrected reimbursement.
    3. Distribution of the remaining LCSS revenue available to a county, township, village, city, or community college based on the municipality’s proportionate share of 2.a above, less any current year reimbursement overpayment.