Playlist: Michigan

Thomas Ivacko: Local leaders say state funding system needs reform

February 13, 2013 0:01:43

Thomas Ivacko is the administrator and program manager of the Ford School's Center for Local, State and Urban Policy. He oversees the Michigan Public Policy Survey program.


The Michigan Public Policy Survey here at the Ford School has been tracking local government fiscal health for the last four years. Fiscal health is continuing to decline for hundreds of jurisdictions, but over the last two years more and more local governments have told us that they are either holding their own or they actually even better able to meet their fiscal needs. 
I think it is because they have taken lots of actions to deal with the falling revenue so they have been cutting staffing, cutting services increasing and working better with jurisdictions to share costs and services. Key fiscal indicators, general fund balances and cash flow. 
A surprisingly high percentage of jurisdictions tell us they are doing OK. So, we think the cost cutting and the right-sizing efforts have helped them weather the fiscal storm. Looking into the future, there is a lot of concern, less than half of local government leaders overall think they are going to be able to maintain today?s services into the future based on the current system of funding local government.
And when we talk about improving services, the outlook is even worse. So this could include for instance faster police and fire response times or filling more potholes in streets. 
Most of Michigan?s local leaders think that the system for funding local governments is broken and needs significant reform. This includes almost every major aspect of the system of funding government, including the gas tax and the sales tax, revenue sharing and so on. There is no particular consensus on the most important thing that takes place. The most common denominator is local leaders say they simply need more money if they don?t want to see a new round of cuts in the future.