Live-Streamed News Conference Today to Unveil New Study on Broken Municipal Funding System

Cover of a new report about the financial crisis facing Michigan communities.

Cover of a new report about the financial crisis facing Michigan communities.

A new report examines the changes that have affected the finances of municipalities over the past 20 years and explores ideas for improving their overall fiscal stability. A press conference releasing the report will take place 11 a.m. today (Wednesday, May 25, 2016). You can watch the live-stream of the press conference as it happens or an archived version later at SaveMiCity.org.

While Michigan’s economic downturn during the Great Recession worsened the fiscal hardship experienced by many municipalities, a study released in May 2016 by Great Lakes Economic Consulting, covers a much broader time frame, from the mid-1990s to 2014. This span shows the problems Michigan’s municipalities face are structural and pervasive, not the result of short-term economic woes.

The study, titled “Michigan’s Great Disinvestment: How State Policies Have Forced Our Communities into Fiscal Crisis,” centers around the experiences of the 15 largest cities in the state, as well as eight smaller cities selected to provide geographical balance.

Key Findings:

  • Michigan’s cities have very few sources of revenue—and those sources are shrinking.
  • As a result, municipal revenues have fallen dramatically.
  • Here’s the rub: in Michigan, property tax revenues drop fast but grow slowly.
  • Low revenues create a serious conundrum for Michigan cities.
  • Low property values are the leading cause of municipal financial emergencies.

Key Recommendations:

  • State needs to fully fund statutory revenue sharing.
  • Make changes to laws that currently allow for artificial reductions in property tax revenues.
  • Explore alternative revenue sources.
  • Permit broader service sharing for public safety.
  • Determine how to better address unfunded mandates.

The report is a deep-dive into why Michigan’s cities are in poor financial condition and you can view it here. Learn more about the League’s municipal finance reform efforts at SaveMiCity.org.