CLOSUP helps local governments navigate fiscal challenges during global pandemic

April 23, 2020



New research from the Center for Local State and Urban Policy (CLOSUP)’s Michigan Public Policy Survey (MPPS) measures the impact that the COVID-19 crisis will have on local fiscal health. CLOSUP anticipates local governments will be facing a wave of fiscal challenges that no one foresaw a few months ago. 

Local governments across the country face looming budget shortfalls and fear expansive layoffs and local service cuts that will impact public safety. But local governments in Michigan face systemic fiscal challenges that may make them worse off than others. In a recent Bridge Michigan article, Tom Ivacko, interim director of CLOSUP, warned that “Michigan could face longer and deeper cuts than other parts of the country because the state’s system for funding local governments is broken.”

Ford School lecturer Stephanie Leiser said, “Protecting our local governments from deep cuts in services will be critical to economic recovery in our communities. If local governments struggle to provide essential services like clean water, public safety, and public health, it will prolong the economic pain for our residents and businesses.”

Since 2009,  the Michigan Public Policy Survey (MPPS) has tracked the needs of local government leaders in Michigan, filling an important information gap in the policymaking process. This year’s survey was ready for the field when it became abundantly clear to CLOSUP that COVID-19 would significantly and negatively impact local government budgets. 

“Because we usually get responses from over 70% of Michigan’s local governments, we realized we were uniquely positioned to provide critical information to policymakers about the impacts the pandemic is having at the grassroots level,” said Debra Horner, the MPPS project manager.”

CLOSUP researchers quickly adapted the survey to gather insights about what effects local leaders believed the pandemic and economic fall-out would have on their communities. 

To accurately measure the impact, new survey questions were created and sent into the field to better understand the how and to what extent COVID-19 will affect important local systems such as healthcare, emergency response capabilities, local business, and the basic needs of residents. It was also important for researchers to understand how well the crisis coordination response has been within and between different levels of government. This includes units within a jurisdiction, among neighboring local government agencies, and the support and coordination from the state and the federal government. 

Local leaders responded. Within the first 9 days, CLOSUP gathered the perspectives from nearly 700 local jurisdictions across the state. 

The MPPS team got help from staff at the Ford School’s other research centers to redact and code over 1,500 comments about the resources and emergency powers local leaders said they needed to deal with the impacts of the pandemic.  CLOSUP then delivered a presentation to key policy stakeholders on April 9th.

“Before the pandemic had even peaked in Michigan, we were able to get early key findings and recommendations to a range of policymakers who are able to provide help to our local governments,” Ivacko said.

CLOSUP Is turning the data they collect into intelligence to help local governments navigate their new fiscal realities. CLOSUP is working with public finance experts from across the state, including Michigan State University, Eastern Michigan University, Oakland University, U-M Dearborn, Citizens Research Council, SEMCOG, Municipal Analytics, and Guidehouse. Other partners, including the Michigan Municipal League, Michigan Association of Counties, and the Michigan Township Association will provide feedback and distribute information locally.

Together, these partners will produce guidance documents that will help local governments think through the ways in which this crisis affects their fiscal situations and how they can navigate the budget challenges ahead. 

“There are several ways local fiscal health can be improved during crisis situations— from accessing federal aid and managing liquidity in the short term, to creating budget scenarios and understanding the potential effects on revenue sources in the medium-term, to re-thinking capital projects plans and creating collaborative service delivery partnerships in the long-term,” Leiser said.  

Ultimately, CLOSUP researchers hope these efforts will help local governments deal with the significant challenges ahead in the near term, and learn how to prepare for future crises as well. 

Tom Ivacko joined CLOSUP at its founding in the fall of 2001 and serves as interim director of the Center. He also oversees the Michigan Public Policy Survey (MPPS) program and has been the lead or co-author on more than 75 MPPS publications covering a wide range of state and local government policy topics.

Debra Horner joined CLOSUP in 2008 to help launch the MPPS surveys, serves as MPPS project manager, and has been lead or co-author on more than 75 MPPS publications. Debra has a PhD in political science from U-M and also runs the political science internship program for the Political Science Department.

Stephanie Leiser is a lecturer at the Ford School, and she leads CLOSUP’s new Local Fiscal Health project. Her general area of interest is in public finance, budgeting, and financial management, and she has particular expertise in state and local tax policy, business taxation and incentives, and local government fiscal health. She was previously a lecturer at the Daniel J. Evans School of Public Policy and Governance at the University of Washington, where she earned her PhD in 2014. Stephanie has taught courses in public budgeting and financial management, tax policy, nonprofit financial management, and microeconomics. A Ford School alum (MPP '05), she has also worked as a tax policy analyst for the Michigan legislature and continues to be involved in state and local fiscal policy in Lansing.