CLOSUP survey: Fiscal stress easing for Michigan's local governments, many still suffering

September 4, 2012

Only one-third of the local governments in Michigan say they are somewhat or significantly less able to meet their fiscal needs this year—a big drop from last year when nearly half reported having such difficulties, according to a University of Michigan survey.

Other findings in the poll by the U-M's Ford School of Public Policy point to a trend of easing in fiscal stress for local governments overall in the state, though many are still suffering ongoing declines.

The improved expectations for fiscal health are likely driven to some extent by growing optimism about where the economy is headed, according to the study by the Ford School's Center for Local, State, and Urban Policy.

The poll, part of the Michigan Public Policy Survey series, reports that:


  • Thirty-three percent of the jurisdictions report being somewhat or significantly less able to meet their fiscal needs this year compared to last year. A year ago, 48 percent reported such difficulty, and 61 percent did in 2010.
  • Twenty-four percent of the jurisdictions say they are somewhat or significantly better able to meet their fiscal needs this year, compared to 16 percent that said the same in 2011 and 9 percent in 2010.
  • For the first time in the past four years, more local officials (27 percent) predict good times rather than bad times (22 percent) in the coming year.
  • Home foreclosures are trending in a positive direction, with 41 percent of the jurisdictions reporting increasing numbers, down from 56 percent in 2011.

Despite the growing optimism, local governments still face several serious challenges, the survey says. Nearly two-thirds (64 percent) reported declines in revenue from property taxes. Almost half of the jurisdictions (46 percent) were affected by declining state aid. And increasing demands for services along with rising health care costs continue to cause fiscal stress.

The study, conducted April 9 to June 18, involved surveys sent via hardcopy and the Internet to top elected and appointed local officials in all counties, cities, villages and townships in Michigan. A total of 1,329 jurisdictions returned valid surveys, resulting in a 72 percent response rate. The margin of error was plus or minus 1.43 percentage points.