MPPS report: more local leaders say finances on upswing, but struggles remain

October 1, 2013

The fiscal health of Michigan's local government units has improved, but many—particularly small jurisdictions—still struggle to meet their financial needs, according to a University of Michigan survey.

Overall, 29 percent of jurisdictions say they are better off this year, while 29 percent say the opposite, according to the poll by U-M's Ford School of Public Policy.

That's a significant improvement from the low point in 2010 when just 9 percent were better off and 61 percent were worse off. The poll is part of the Michigan Public Policy Survey series at the Ford School's Center for Local, State, and Urban Policy.

"We do see gradual improvement, but it is a slow process and it is going to take time for improvements across the state," said Tom Ivacko, the center's program manager.

The latest findings show that bigger cities are recovering faster than smaller areas. In cities with more than 30,000 residents, the percentage saying they are better able to meet their needs rose to 44 percent, compared to 36 percent in 2012.

"It looks like these large jurisdictions are bellwethers for the local government fiscal health," Ivacko said. "They led the way into the crisis in 2009, but since 2011 they have been leading the way out."

Struggles remain as 48 percent of all jurisdictions say their property tax revenues continue to decline, and 30 percent expect their fiscal health to be worse a year from now.

"The lack of optimism is tied to their views on the economy and state revenue sharing," Ivacko said. "Local leaders have told us that the system of funding local government is basically broken and won't provide the revenue needed to maintain the services provided today."

The study, conducted April 8-June 9, involved surveys sent via hardcopy and the Internet to top elected and appointed officials in all counties, cities, villages and townships in Michigan. A total of 1,350 jurisdictions returned valid surveys, resulting in a 73 percent response rate. The survey had a margin of error of 1.4 percentage points either way.