Michigan Needs to Own-Up to Why Its Cities are Struggling – MSU expert

Michigan is not alone when it comes to the financial challenges facing its local communities. But the “stick approach” to the way it deals with struggling cities separates Michigan from most states.

This was the message of Michigan State University Assistant Professor Joshua Sapotichne during a news conference Wednesday unveiling a new deep-dive report on the municipal finance system in Michigan.

MSU's Josh Saptichne speaks at a news conference on Michigan's municipal finance system Wednesday in Lansing.

MSU’s Josh Saptichne speaks at a news conference on Michigan’s municipal finance system Wednesday in Lansing.

“Michigan really does make it particularly challenging on its local governments,” Sapotichne said. “What sets Michigan apart, according to work we’ve been doing, is not just a revenue side story. Michigan collects policies and the cumulative effects of those policies incubates financial distress among the state’s local governments.”

The press conference Wednesday officially released a new report examining changes that have impacted the finances of Michigan municipalities over the past 20 years. Produced by the non-partisan Great Lakes Economic Consulting (GLEC), the “Michigan’s Great Disinvestment: How State Policies Have Forced Our Communities into Fiscal Crisis” study provides data on how a variety of state policies, from revenue sharing cuts to limits on growth of property tax values, have created a crisis in Michigan cities that is preventing the state from achieving its economic potential.

Read more about the report here from the League’s Anthony Minghine. View a press release about it here and go here for another blog about the portion of the news conference featuring Battle Creek City Manager Rebecca Fleury. Also speaking at the event were the Michigan Municipal League’s Anthony Minghine and League CEO and Executive Director Dan Gilmartin; and Robert Kleine, economic consultant with GLEC.

Speakers from Wednesday's news conference from left - Josh Sapotichne, Rebecca Fleury, Robert Kleine, Dan Gilmartin and Anthony Minghine.

Speakers from Wednesday’s news conference from left – Josh Sapotichne, Rebecca Fleury, Robert Kleine, Dan Gilmartin and Anthony Minghine.

The GLEC report focused on Michigan and Sapotichne said a report they’ve done at MSU provides a national perspective. In particular, they looked at Michigan’s emergency management system where an emergency manager will be brought into a financially-struggling community by the state with broad powers.

“One of the things that has come as surprise as we talk to folks across the country is just how aggressively designed Michigan’s emergency management policy is and also how aggressively it’s implemented – how often it’s used – given the amount of power given to the emergency manager,” Sapotichne said.

This relates to how Michigan views its local communities that are struggling, he said.

“In Michigan there is one particular theory that stands alone with respect to how we think about these issues of financial distress and that theory is it’s locally caused. It’s mismanagement, corruption or some combination thereof,” he said. “Otherwise why would you institute one individual who would displace the local official so impressively without incorporating the input of the locals? No other state has such an aggressive design on that front.”

He said the state of Michigan needs to take some responsibility for why cities struggle.

“In Michigan it’s really an aggressive intervention and it lacks self-awareness,” he said “The state has to own up a bit to being a part of the problem when it’s thinking about how to help local governments manage their way through these crisis.”

States like Pennsylvania take a more holistic, “carrot approach” to helping its financially-struggling cities, while a small handful of states – like Michigan – take a “stick approach.”

View Sapotichne's talk on Vimeo here: https://vimeo.com/168141737

View Sapotichne’s talk on Vimeo here: https://vimeo.com/168141737

“(This stick approach) is not just with respect to the emergency manager policy, but also in terms of limiting the amount of revenue the local governments can generate and these really sharp declines in revenue sharing that we’re seeing,” Sapotichne said. “My response to that is if the state wants so much control of what’s going on at local level to me this is an opportunity for a cohesive, coherent urban policy agenda in this state and providing an institutional venue so we can figure how these things hang together. We should think about how the effects on local government, not just in their fiscal affairs, but in their ability to design and implement innovative solutions to the range of challenging problems that they’re facing.”

Bio: Joshua Sapotichne is an assistant professor in the political science department at MSU. He is an expert on public policy, urban policies and the policy relationship between the U.S. government, state government and local governments.

Matt Bach is director of media relations for the Michigan Municipal League. He can be reached at mbach@mml.org and 734-669-6317.