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FOR IMMEDIATE RELEASE: March 21, 2016
Census Info Details How State Actions Have Damaged Michigan Cities
Michigan Municipal League to offer solutions in coming months
LANSING, Mich. ― Michigan was the only state in the nation where municipal revenues dropped from 2002-12, according to U.S. Census data analyzed by the Michigan Municipal League. In fact, Michigan experienced an 8-percent decrease caused largely by decisions of state policymakers and state laws.
State support for cities was slashed by 56 percent over that period, while state revenues increased 29 percent. That cut for cities was the biggest decline in any state, the data shows. Modest increases since then have not kept up with municipal responsibilities to provide police, fire, recreational and other services.
“Michigan’s flawed policies and legal limitations are drastically inhibiting our cities’ ability to provide critical public services. The data is clear that in Michigan we are starving our cities to the brink of failure,” said Dan Gilmartin, executive director and CEO of the Michigan Municipal League.
Since 2002, the state has cut revenue sharing to cities, villages, townships, and counties by $7.5 billion, with Flint’s revenue sharing being cut by $62 million, Lansing by $63.5 million, Marquette by $7.8 million, and Detroit by $827.6 million.
“Our funding model is broken. The revenue sharing cuts at the state level are in addition to drastic reductions in property values. In many places property values are essentially frozen at levels we saw a decade ago and cannot return to prerecession levels because of quirks in our tax limitations,” said Anthony Minghine, associate director and COO of the League. “It’s a perfect storm that is going to destroy Michigan’s communities. We need to take a comprehensive look at costs, structure, and revenue and set a path for the future that will sustain our cities and the state by creating places that will attract and retain the talent we need to drive the economy of 2016.”
Wayne Mayor Susan M. Rowe said her city’s ability to provide key services has suffered dramatically due to these state policies.
“We’ve seen our revenue sharing reduced by a total of $7.8 million since 2002. Our city of 17,100 residents had 161 employees in 2008; today we have about 62. We have reduced our police force from 40 in 2008 to 22 now, and our firefighters from 21 to 12,” Rowe said. “We try hard to deliver the best services possible to our citizens, but our abilities have been severely constrained by decisions made at the state government level. We have a balanced budget, but that’s not enough to make our city as great as it should be.”
Mitch Bean of Great Lakes Economic Consulting said cities across the state are letting roads and infrastructure crumble and are unable to meet police and fire needs simply because they don’t have enough money.
“Most mayors don’t want to talk about these problems. They are by nature optimists. But if you look at how our state treats its cities through the eyes of an economist, you quickly come to the conclusion that they are facing incredible problems created by decisions outside their control,” Bean said. “No state in the nation has cut state funding to local governments like we have, and unless we make major reforms that give cities more revenues, the man-made disaster that is Flint will be only the beginning.”
Shanna Draheim, senior consultant at Public Sector Consultants, which has examined the value of public goods that improve quality of life in growing economies, said Michigan is missing out on opportunities for more and better jobs by limiting the ability of cities to provide quality services.
“If you create great places, you will do a better job of attracting and retaining talent. Today’s businesses are locating where the talent is, and bringing with them higher incomes, more quality jobs and a better economy,” said Draheim. “Young college grads today want to live in vibrant downtowns. Limiting the ability of cities to provide the quality of life needed to attract those grads means our entire state economy suffers.”
The Citizens Research Council of Michigan (CRC) in 2015 delivered a report requested by the Legislature outlining the impacts of revenue sharing cuts on state cities.
“Our first recommendation was fundamental,” said CRC President Eric Lupher. “We called for state policymakers to decide if the statutory state revenue sharing program is a priority—in other words, asking if ensuring our cities have sufficient resources to work properly is important to them. If it is, we recommended a return to funding at levels designated in the state’s statutory laws. This year, we are still $600 million below where we should be in state support for cities.”
Minghine has been leading a League task force working with mayors, municipal finance and spending experts to develop solutions, addressing issues including revenue sharing, taxation, retirement benefits, wise use of infrastructure to limit wasteful duplication, and more.
“We will be outlining these solutions in coming months. But our key message here is that without major reforms, we will find more cities falling into struggling to provide services The state needs to invest its resources where they can provide the greatest return, and that is its cities. Cities are the economic engine that drive the most successful places, and we have lost sight of that. We need to set a new course.” Minghine said.
More information on the financial crises facing Michigan’s cities and how they can be addressed is available at saveMIcity.org.
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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. Learn more at mml.org.