St. Joseph Herald-Palladium Series Breaks Down Michigan’s Broken System for Funding Municipalities

Here is a screenshot of the headline and main photo for an in-depth article about revenue sharing and how the state’s system for funding municipalities is broken in Michigan. The article appeared in the Dec. 3, 2017 online issue of the St. Joseph Herald-Palladium. A link to the full article can be found in this blog post.

There’s an excellent, well-written article and series in Sunday’s St. Joseph Herald-Palladium by John Matuszak about revenue sharing and how the state’s system for funding municipalities is broken. This is an in-depth series that should be on the must-read list for every state lawmaker, business owner, resident and journalist (basically everyone) who has even the slightest interest in Michigan’s communities.

The main article, with the headline, “Dollars down the drain: Local governments see decades of declining state revenue,” gives a good history about revenue sharing and how the state began underfunding it in 2001. There are so many good parts of this article it’s hard to pick just a couple things to highlight, but we were especially interested in the comments from state Rep. Kim LaSata, R-Bainbridge Township, elected in November 2016.

Here’s an excerpt: Having reviewed the data, it is difficult not say the current revenue sharing model in the state of Michigan is broken,” stated state Rep. Kim LasSata, R-Bainbridge Township, elected in November 2016. “Unfortunately, between 2001 and 2011, statutory funding has been regularly used elsewhere as part of efforts to balance the state budget.” Additionally, the formula developed in 1998 for funding municipalities was essentially abandoned in 2002, without ever fully being implemented, LaSata noted, and municipalities are limited in how they can make up lost revenue. “It is hard not to characterize this as the state shifting its costs onto the backs of municipalities,” LaSata said.

The article then goes on to quote and reference numerous studies and reports by the Michigan Municipal League and other organizations and institutions that have researched revenue sharing and municipal finance.

And we loved the ending that concludes with “Information on state revenue sharing is available at www.savemicity.org.” Hey, that’s us – SaveMICity.org!

We couldn’t agree more. Our website is full of research about why our communities are struggling. Our site also has links to most of the reports cited in the article, including the “Michigan’s Great Disinvestment” report by former Michigan Treasurer Robert Klein (view it here) and his company, Great Lakes Economic Consulting. We also have an online database where you can look up and see how much revenue sharing your community has lost in the past 15 years.

The main article in the St. Joseph Herald-Palladium is part of a series of articles that were posted Sunday related to the funding of Michigan communities. Here are links to all the articles (all written by Matuszak):

Main article:Dollars Down The Drain” – http://www.heraldpalladium.com/news/local/dollars-down-the-drain/article_c41ce12a-7e70-54ab-aead-3f7bf058ed32.html.

Sidebar: “The View from Lansing on revenue sharing” –  http://www.heraldpalladium.com/news/local/the-view-from-lansing-on-revenue-sharing/article_908e7071-9e4e-5845-ab0d-8514f0c598e0.html

Sidebar:Hitting Home: Southwest Michigan communities deal with decline in state aid” – http://www.heraldpalladium.com/news/local/hitting-home/article_e979b9cd-5669-5bbf-8d09-ace7b4e310b8.html (NOTE: A subscription is required with the St. Joseph paper to read this article in full online).

This blog was by Matt Bach, director of communications for the Michigan Municipal League. Matt can be reached at mbach@mml.org.