The Michigan Municipal League’s Anthony Minghine continued a statewide tour of Michigan communities Wednesday (Nov. 9, 2016) by being in Flint talking about the state’s broken system for funding municipalities. It was the second stop in Flint in less than a month as the League also organized a municipal finance panel discussion in Flint on Oct. 25 with U.S. Congressman Dan Kildee.
Minghine was part of a series of speakers participating in the “Investing in Michigan Communities: Finding Fairing Funding for Strong, Successful Communities” event at University of Michigan-Flint. The event was the sixth of seven stops in a statewide tour organized by the office of Wayne County Executive Warren C. Evans. Joining Minghine were Evans, former State Treasurer Robert Kleine, Michigan State University Extension Center for Local G0vernment Finance & Policy; Eric Lupher, of the Citizens Research Council and Bill Anderson, southeast Michigan Council of Governments (SEMCOG)
Mayors, township supervisors, commissioners, city council members and other decision-makers attended the Flint event aimed at identifying viable solutions to Michigan’s broken model for funding local governments.
Other stops for the statewide tour were in Trenton, Grand Rapids, Marquette, Lansing, and Traverse City. A final seventh stop is being planned for southeast Michigan in January.
Minghine discussed the broken system and ways to fix it. He explained and how the state has diverted more than $7.5 billion in revenue sharing dollars from Michigan communities since 2002. Minghine showed data illustrating that Michigan is the only state in the nation to invest less in its communities between 2002 and 2012. (View the chart here: http://www.savemicity.org/wp-content/uploads/2016/03/census.pdf).
“The state balanced its budget off the backs of local municipalities,” Minghine said, while showing a chart that illustrated how state revenues went up 29 percent at the same time state revenue to cities went down by 56 percent. “We got to start thinking differently.”
The other speakers discussed the state’s system for funding municipalities and how our communities are financially handcuffed by existing laws and regulations.
“You may ask why hasn’t the state done more for municipalities?” Kleine said. “One of the reasons is the state decided to do more for business taxes. … Our business taxes are among the lowest in the nation. Some people may think it’s good to have low business taxes, but it’s not been doing much for our economy. The state has ignored the plight of its cities. Our system of local government organization and financing is broken and needs to be completely reformed.”
Lupher discussed possible options to fixing the problem, include revenue-generating options such as local-option income and sale taxes, and motor fuel taxes; and potential cost-savings measures such as local government consolidations and service sharing; pension reform; and other post-employment benefits (OPEB) reform. Minghine listed an array of other possible fixes including giving local communities true home-rule control, and encouraging more placemaking initiatives in communities.
“If communities fail, the state is going to fail right along with it and there are some things we can do about it,” Minghine said.
This tour and the message that the state’s system for funding our municipalities is broken is consistent with the League’s ongoing saveMIcity.org reform effort.
The saveMIcity effort is centered around research that shows great places make for a strong economy. By employing community-based placemaking strategies, we strengthen both our economic and social future. The Michigan Municipal League believes that at the heart of great places are strong cities. Across the country, cities account for over 80 percent of GDP, but in Michigan we have failed to invest in this vital resource.
After years of working within the existing paradigms, the League is undertaking this major saveMIcity legislative and policy push aimed at reforming municipal finance in Michigan to encourage renewed investment in our communities. This is intended to be an examination of how we can do things differently in Michigan to assure that local government can’t just survive, but can thrive. To that end, the League is developing policy recommendations around three themes: Cost Containment, Revenue Enhancement, and Structure of Government.