What is Revenue Sharing?

• Local governments use state funding, called revenue sharing, to pay for services
that make our communities the types of places where people want to live and
businesses want to locate.

• Revenue sharing was promised to local communities in the Michigan Constitution
to help pay for core government services such as police protection, fire services,
roads, water, sewer and garbage collection services.

• It started in the 1920s when the State of Michigan promised communities it would
streamline tax collection by eliminating local taxes and replacing them with state
taxes. The State collects and records these taxes and is suppose to reimburse local
jurisdictions to off set the general budgets of local communities.

• In every budget since 2000, the State has not fully returned revenue sharing as
required by statute. Ten consecutive years of cuts have left local communities more
than $4 billion short on revenue sharing.

• The Michigan Legislature needs to recognize the connection between the
essential services provided by local communities as it relates to quality of life
and the economic vitality of our state.

• Local communities are the foundation of successful economic development in
Michigan. Safe streets and functioning infrastructure are critical to attracting and
maintaining businesses.

• Communities have reduced their services, eliminated public safety positions and
consolidated services to deal with lost revenue.

• According to the Michigan Commission on Law Enforcement Standards, there are
1,800 fewer police officers on the streets of Michigan since 2001.

• Michigan’s Fire Marshall Office reports 2,400 fewer fire fighters since 2001.

• Senior, recreation and public library programs have been drastically cut or eliminated.

• Local governments cannot continue to provide essential services if funding is continually redistributed to other budget priorities.

Click here for recent media coverage of the revenue sharing issue.

Click here for talking points on revenue sharing.