What are the penalties for violating PA 152?

Under MCL 15.569, a public employer that fails to comply with PA 152 faces two penalties: the state treasurer reduces each economic vitality incentive program (revenue sharing) payment by 10%, and for employers that receive state school aid, the Department of Education assesses a penalty equal to 10% of each school aid payment. Both run "during the period that the public employer fails to comply" — this is not a one-time fine. It repeats with every payment, month after month, until compliance is restored.

What the statute says

Two details worth noticing in the fine print: recovered amounts go back to the fund they came from — the state keeps the money — and the Department of Education can refer school-aid penalties to Treasury for collection under MCL 205.13, the same machinery used for delinquent taxes. One more detail matters for municipalities: the statute names the economic vitality incentive program (EVIP) from 2011. The Legislature has since replaced EVIP with the City, Village, and Township Revenue Sharing program and restructured it repeatedly — the program now runs under 2025 PA 22 — and the PA 152 compliance checkbox that once sat on the revenue-sharing certification is gone. The penalty statute is still the law, and the school-aid channel remains fully operative for districts; what changed is that nobody sends municipalities an annual reminder anymore.

What it means in dollars

Compare that against what compliance costs: a board vote that takes five minutes, or a renewal-time math check your agent should be doing for free. The penalty-to-prevention ratio here is the most lopsided in Michigan municipal finance.

Who feels it most

• School districts. The 10% school aid penalty makes districts the highest-exposure entities under the act — which is why schools are generally all over PA 152 while smaller municipal entities often aren't.
• Cities, villages, and townships on revenue sharing. The 10% reduction hits the statutory/incentive payments many small communities budget against every year.
• Entities outside both funding streams. Some authorities and special districts receive neither revenue sharing nor school aid. That does not make PA 152 optional for them — compliance is still the law, certifications still get signed, and noncompliance still surfaces in audits, bargaining, and litigation. It just means the statute's automatic dollar penalty isn't the main risk; the certification is.

How noncompliance gets caught

Less through paperwork than it used to. In the EVIP years, cities, villages, and townships certified PA 152 compliance to Treasury as a condition of their payments — the reminder was built into the calendar. Today's revenue-sharing program carries no such checkbox, which means for most municipalities the law surfaces the hard way: an audit finding, a union negotiation, a benefits review when changing agents, or a school district's aid calculation. County road agencies remain a statutory exception — their certification under MCL 45.514a is still on the books, with Michigan Transportation Fund distributions withheld for the period of noncompliance. The dangerous position isn't deciding to skip compliance — almost nobody does that. It's drifting out of compliance for years because the state stopped asking and nobody ever ran the cap math. That's exactly the pattern we find when we review a new municipal group's benefits for the first time.

The fix costs almost nothing

Every path back to compliance is cheap: get under the caps (current hard cap amounts), adopt the 80/20 alternative by majority vote (hard cap vs. 80/20), or opt out by 2/3 vote — renewed annually (does the opt-out require a board resolution every year?). New to the law entirely? Start with What is PA 152?