Financial Notes in the Legislature

What are they and why are they important?

Stephen Henderson and Eric Lupher, a member of the Citizen’s Research Council of Michigan, talk about the influence of financial notes and fiscal agencies on legislation. Financial notes are non-partisan estimates of the financial impact of proposed and enacted legislation on state and local governments, public school districts, businesses, and taxpayers. These notes are meant to provide research to policy makers in order to inform their decisions. Stephen and Lupher discuss:

  • Do they work?:  Lupher says that financial notes are good at analyzing how a bill would change the cost to state governments and school districts but do not do as well with local governments and businesses. He says they are successful at remaining non-partisan regardless of the leadership elected in Lansing.
  •  Why do local governments pose problems?: Lupher says that Michigan “has over 1,800 units of local government” and the size of these governments changes drastically in different areas of the state. He says, “we kind of get lost in the numbers a little bit when we talk about 1800 units of government.”
  • Why are term limits important?: Lupher explains how the fast turnover of term limits is leading to a lack of experience of state legislators on dealing with local governmental issues. He says that when bills that affect local governments and business are often completed late the fiscal year and get backloaded into lame-duck sessions until the financial notes are written.

Click the audio link above to listen to the full conversation.