Grand Rapids Business Journal: Cities not benefiting from recession recovery
There was really nice news coverage in the Grand Rapids Business Journal recently about a new report tied to the SaveMICity initiative.
Under the headline “Cities Not Benefiting from Recession Recovery: Adjusted for inflation, report show total revenues for cities dropped about 12%”, the January 3rd article details the new report released in November by Public Sector Consultants. The Michigan Municipal League, as part of our SaveMICity campaign, had a press event and sent out a news release about the report in late 2019.
Here are some excerpts from the in-depth article that focused, in part, on the revenue changes in Upper Peninsula communities, particularly Marquette:
“Adjusted for inflation, total revenues for cities dropped about 12%, the league reports. State revenue sharing — the money that the state allocates to communities — fell 37% and property tax revenue dropped 15%.
What this report shows is that there was no recovery for cities,” said Chris Hackbarth, director of state and federal affairs for the league. “If we haven’t been able to recover our local governments following the last recession, we should have zero hope that they’ll be able to recover from the next recession.
… Statewide, 173 Michigan cities studied saw revenue growth under 2% over the 15-year period. Only 52 cities saw growth of 3% or more.
The state needs to realize what they’re doing to communities — I think they’re finally getting the message,” said Gary Simpson, Marquette’s chief financial officer. “I think they’re committed to gradually increasing the funding — I don’t know if we’ll ever get to the level it should be at — but I think there’s a sudden realization.
… The revenue loss is particularly worrisome, as some economists sounded the alarm of recession after a bleak jobs report earlier last year and an analysis of local government revenue.
… The challenges of the state government and local governments aren’t always aligned, Hackbarth said.
“We’re trying to show the disconnect that exists between what happens with the state’s economy, the state budget and local budgets,” he said.
Matt Grossmann, director of the Institute for Public Policy and Social Research at Michigan State University, said he agrees that city and state financial pressures are disconnected.
Stagnant job growth does not explain why cities struggle financially, he said.
Population growth, new development and housing are evidence that a city would be more likely to withstand a recession, Grossman said.
For communities in northern Michigan, the problem is magnified.
“The U.P. has long-running economic and population problems that I’m sure are exacerbated by recessions but are not caused by them,” Grossman said.”
View the full GRBJ article here: https://www.grbj.com/articles/95114-cities-not-benefiting-from-recession-recovery
View the full PSC report here: http://www.savemicity.org/wp-content/uploads/2019/10/MML-revenue-analysis-report-FINAL.pdf
View the related online lookup tool and see the revenue changes in your city comparing 2002 to 2017 here: http://www.savemicity.org/revenue-snapshot/.