New Report Paints Bleak Financial Picture for Cities in Michigan

There isn’t a municipal leader anywhere in the state who will argue the results of a new study that says that fewer and fewer revenue sharing dollars are making their way to local governments. In fact, the new report by Public Sector Consultants paints a bleak financial picture for cities across the state, citing facts that the average community is now getting 12-percent less revenue today than they did 15-years ago.

The new study and online database were released today by the Michigan Municipal League and the SaveMICity initiative. The online look-up tool illustrates the drastic loss of revenues for communities in comparing 2002 to 2017 data gathered by the Michigan Department of Treasury.

The study and online tool—which can be viewed at the link below paints a desolate picture for what cities and villages have had to endure in order to balance their budgets in the face of steep revenue cuts by the Michigan Legislature and past administrations. Here’s the link:

http://SaveMICity.org/revenue-snapshot

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That online look-up tool includes links to data from the following communities in Southwest Michigan:

  • Allegan
  • Bangor
  • Bridgman
  • Coloma
  • Dowagiac
  • Fennville
  • Hartford
  • New Buffalo
  • Saugatuck
  • South Haven
  • St. Joseph
  • Watervliet

For whatever reason, Benton Harbor, Buchanan and Niles are not included in the tool.

***NOTE: Upon further review, if you click THIS link, you can search every municipality in the entire state (the other “snapshot” was a pull out created by the MML):

http://www.savemicity.org/search/

Dan Gilmartin, CEO & Executive Director of the Michigan Municipal League, says, “This report illustrates why Michigan cities have had to cut and reduce staffing for police, fire, street improvements and other municipal services over the last two decades.”

Gilmartin goes on to say, “Clearly, cities and villages across Michigan have already learned to do more with less, but the collective loss of more than $8 billion over the last 15 years is no longer tenable for our communities. There’s just no more room for our governmental entities to cut—additional losses now will negatively impact the way they deliver services for residents, which hurts the viability of Michigan as a competitive state in the Midwest and beyond.”

Tim Dempsey, Vice President for Public Sector Consultants says the report and online tool represent an educational opportunity for Michigan citizens who are worried about their local communities and brings into specific relief the issue of how cities and villages have suffered over time.

Dempsey says, “The overall decline and change in city revenue sources have been significant since 2002,” and argues, “Declines in total revenues, property tax, and state revenue sharing are particularly dramatic when adjusting for inflationary increases. Revenue has simply not kept pace with inflation.”

Key findings of the 225 cities studied:

  • From 2002 to 2017, on an inflation-adjusted basis, the cities experienced a decline of nearly 12-percent in total revenue, a 37-percent decline in state revenue sharing, and a 15-percent decline in property taxes.
  • 173 of the cities studied saw revenue decline or grow by less than 2-percent over the 15-year period.
  • Only 52 cities saw growth of 3-percent or more.

The report excluded the City of Detroit due to its substantial size and impact on overall metrics. The online database, however, does have Detroit’s numbers independent of the totals. Detroit, on its own, saw a total decline in all revenues of nearly 34-percent with nearly a 64-percent drop in state revenue sharing, and more than a 33-percent drop in property taxes.

The report and online tool are part of the League’s SaveMICity initiative, which highlights the state of Michigan’s disinvestment in its communities—to the tune of $8.6 billion over the last decade alone— and why rededicating existing resources to local government is the best way to further encourage growth in Michigan’s economy. Since 2002, Michigan ranks dead last in the nation when it comes to funding its communities.

Brenda Moore, President of the Michigan Municipal League and Mayor Pro Tem in Saginaw, says, “We need state leaders to understand that our local communities have taken it on the chin financially over the last two decades,” and adds, “This disinvestment in our communities cannot continue if we expect Michigan to provide the types of places and cities that today’s talent and businesses want. I just don’t see how we can expect Michigan to become more economically competitive when we starve cities and villages of resources they need to survive.”

Moore hopes that the report and online tool will open the eyes of legislators, business leaders, and residents to the notion that Michigan’s financial system for local government is broken. She says, “It’s time for a change in Lansing to how we do business,” adding proposed solutions to fixing the broken system are available at savemicity.org.

The Michigan Municipal League is dedicated to making Michigan’s communities better by thoughtfully innovating programs, energetically connecting ideas and people, actively serving members with resources and services, and passionately inspiring positive change for Michigan’s greatest centers of potential: its communities. The League advocates on behalf of its member communities in Lansing, Washington, D.C., and the courts; provides educational opportunities for elected and appointed municipal officials; and assists municipal leaders in administering services to their communities through League programs and services.